School district looks for ways out of budget crisis
A fiscally healthy school district is feasible within the next three years, but it could take a strong dose of nasty medicine to get it there.
Tahoe-Truckee Unified School District Superintendent Pat Gemma laid out the options for the community Tuesday at a packed meeting in the Tahoe City Public Utility District board room.
“This isn’t crying wolf. We have a budget crisis,” said Gemma. “This is a problem to solve and we can solve it. I really believe we can solve the problem.”
When the TTUSD Board of Trustees adopted its budget June 30, there didn’t appear to be any financial problems. Placer County education officials even critiqued the budget and said that the 3 percent reserve was based on sound projections, Gemma said.
However, a fiscal crisis emerged after the state budget was adopted and school began Aug. 31.
TTUSD had projected a 1.8 percent growth in students to 5,201, just over last year’s enrollment of 5,100. As of October, only 4,977 students showed up. Since the state funds school districts based on their enrollment, TTUSD lost $851,200 from its June 30 budget projection.
The school district also found that it had overspent last year’s budget by $100,000 in athletic transportation, $100,000 in utilities and $180,000 in snow removal. The state Department of Finance also rejected $178,000 in claims that the school district had expected to be reimbursed for programs mandated by the state. Impacting the budget as well is student transportation which costs $400,000 more than the state provides.
At the beginning of school, the district immediately reduced its teaching staff and shifted students around in order to save $85,000 for this year, Gemma said.
Trying to find the required 3 percent reserve for its revised budget was difficult and the district decided to bring in the Fiscal Crisis and Management Assistance Team to help make decisions.
“When the state declares a district bankrupt, before they bring in a trusteethey bring in FCMAT to do a complete assessment,” Gemma said. “We’re the first district in this state that has ever called them in before they go bankrupt. We’ve caught this just in time.”
FCMAT found that the budget needed to show $168,014 more in expenses and $356,403 less in revenue. There was also a difference in the adopted budget of $118,457 of excess revenue.
The June 30 adopted budget had a 3 percent reserve of $859,497, but with the FCMAT findings that went down to $216,623. Gemma also explained that the district is using $300,000 in Measure S carryover as reserve with the citizen committee’s permission, and $174,000 of money for given to the state for each site.
“We can’t use those, so we have a negative ending balance,” Gemma said.
To build a reserve and to keep the same programs as this year, Gemma said, the district needs to find $1.6 million by next year.
“I think we can do it in two years with a lot of cooperation, and we can do it in three years with moderate cooperation,” he said.
Gemma then explained various options for the school district, noting that some of these suggestions had not been reviewed by the school board.
“None of this is a done deal, this is all still a matter of discussion,” Gemma said.
The solutions ranged from the immediate to long-term, from donations to legislative changes. Potentially, the cuts and the revenue could generate $3.7 million, but Gemma described each line item as generating a minimum and maximum amount.
One of the examples was to increase the attendance at the schools. In the past, California has paid the Average Daily Attendance (ADA is about $21 per student per day) for excused absences. This year, they will only fund the ADA if the student is actually in class or has done independent study – even if the student is sick only one day.
Gemma said the TTUSD has an attendance rate of 93.7 percent over the last five years. If it can increase the attendance rate by having children who are sick or leaving school do their independent study, the district can generate more money. Every 1 percent increase in the attendance rate is equal to $180,000, he said, with a potential of raising $400,000.
Gemma’s immediate solutions also considered asking the 3,000 families in the district to make a one-time $100 donation and to ask Measure S Citizens Review Committee and Excellence in Education Foundation to commit funds for the district.
Next year, the district is looking at increasing class sizes in the middle schools and the high schools by eliminating a few teachers and modifying early retirement benefits for teachers. The FCMAT is studying whether closing Rideout Elementary School and Donner Trail School would bring a cost savings to the district.
The school district is also working to recoup money from the state by declaring the district a declining enrollment district. The district did lose enrollment, but because there are 200 students in the Prosser Creek Charter School, the enrollment does not appear to decline to the state, Gemma said.
Prosser Creek Charter School took 81 students out of the TTUSD, but the rest of its students are from elsewhere. Even with including the 81 students, the district is below its enrollment from last year, he said.
If the state would declare TTUSD a declining enrollment district, then it would fund the school district at last year’s level of 5,100 students, instead of this year’s level of 4,977.
Nancy Lungren, who works for Assemblyman Rico Oller, said the assemblyman is trying to get TTUSD declared such a district.
“I think there is hope. If they shut the door on our face, we can immediately turn around and author some legislation,” Lungren said.
She added that Oller will be sponsoring legislation to bring more money to districts who provide student bussing in the mountains and possibly get emergency snow removal funds from the state reserve instead of the local school district reserve. Gemma noted that last year’s heavy winter cost $250,000 for snow removal.
He also said the last district he worked in – Martinez, Calif. – receives the same amount of money for bussing students as Tahoe-Truckee, but does not spend the same amount because Tahoe has such long distances and snow problems.
What to cut in the budget and from where will be decided by December, Gemma said. The FCMAT will make its final report on Monday, Nov. 23, at a meeting in the district offices in Truckee. In December, Gemma wants to bring together representatives from the district, teachers, employees, administrators, district departments, school board, parents, civic leaders, Excellence in Education and Measure S to spend two days hashing out how to cut from the budget and generate revenue to come up with the $1.6 million needed. Some of those decisions could be implemented as early as January.
The full house at the meeting applauded Gemma for the presentation, with Cindy Gustafson of Excellence in Education saying that “the public education is important for the community to come together to help our kids.”
The new superintendent also cautioned the community that it needs to look for solutions, not scapegoats.
“We’re wasting our time looking for someone to blame,” he said.
The core problem to be solved stems from California spending $1,000 less than the national average. If state spending on education was at the national average, TTUSD would have $5 million more each year, he explained.
“We’ve got a lot bigger work to do as well,” he said.
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