Budget numbers for the Benicia Unified School District are expected to fluctuate over the next few years, but Chief Business Official Tim Rahill is optimistic about next year when the district is projected to have a one-time $88,000 surplus. The latest budget update was provided in a public hearing at Thursday’s school board meeting.

Rahill said revenues are budgeted at $46.6 million, which has mostly come from funding through the state, Local Control Funding Formula and U.S. Department of Education title programs. Meanwhile, expenditures are projected at $46.5 million, which included certificated and classified salaries, employee benefits, supplies and capital outlay. Rahill said the tentative agreement with the Benicia Teachers Association was included in the figures, but the agreement was voted down Wednesday so it may be removed from the expenditures when the budget is brought back to the board for a vote.

“The one change that you might see in two weeks is the possible removal for costs associated with any tentative agreement that hasn’t been ratified or approved,” he said.

Rahill predicts BUSD will have $5.3 million in reserve funds next year, including $1.4 million in the 3 percent reserve for economic uncertainties, $2.1 million in the Board Policy Reserve and $1.8 million in restricted programs. Trustee Peter Morgan asked if there was any money in the budget to start building the reserves. Rahill said the reserves were set at the required amount. Morgan expressed concerns that the district was deficit spending and dipping into reserves to the point where it would not help in a recession or similar economic problem.

“It’s just not enough money,” he said. “We’ve had accounting firms, we’ve had consulting firms come in and tell us we’re too low. The auditors come in who certify our financials tell us we’re an outlier, we’re too low year after year. If we had put away $100,000 a year for the last six years, we’d have $600,000 more money.”

Morgan cautioned that the district might not have enough money for reserves at some point and encouraged administrative staff to budget money for a rainy day. President Diane Ferrucci suggested agendizing an item to evaluate board policy in the future.

Rahill noted that BUSD has been continually paying more for employee retirement pensions since the 2013-14 school year.

“As the investment returns have decreased, they have passed on rate increases to every school district and public employer system in California,” he said.

Among other things, he pointed out that step and column salaries will increase to $480,000 in 2018-19. Morgan requested that Rahill come back to share how the district’s step and column increases compare to those of the state.

Rahill also said the district would be “taking a hit” in reductions for special education funding.

“There is a possibility for this number to be better after the county and our local special ed agency closes its books,” he said. “Sometimes there are one-time funds they can pass along to the district.”

The district is anticipating 24 fewer students come August but stable enrollment beginning in the 2019-20 school year, Rahill said.

Additionally, the district is proposing to operate at a break-even budget in the 2019-20 and 2020-21 school years. Rahill said budgets are not available for those years yet, but the district has one-time deficits of $400,000 and $500,000 due to spending down the state one-time grants.

“There’s no indication that those state one-time grants are gonna be there, but our district plan is to spend those down to the tune of $500,000 or $400,000 a year,” he said.

When comments were opened to the public, Lisa Delorefice— a fifth-grade teacher at Mary Farmar Elementary School— said she had requested a variance analysis of the deficit spending in the previous year and did not receive it. She also requested a breakdown of the $450,000 for step and column rates in 2017-18.

“I know that’s not for teachers,” she said. “Where is that as far as CSEA and certificated? The next time, I’d like more of a breakdown.”

In other business, the board unanimously voted to award contracts to Vander Bos Electric for the fire alarm upgrade projects at Mary Farmar and Robert Semple elementary schools. The board also approved an order for the election of three of its school board members. The seats of Ferrucci, Morgan and Celeste Monnette are up for re-election in November, although Morgan indicated he does not intend to run again.

The board will have its final meeting of the 2017-18 school year on June 14.