Tim Rahill, Benicia Unified School District’s chief business official, will be presenting the second interim financial report at Thursday’s school board meeting. The report shows, among other things, that BUSD is operating at a $1.9 million deficit.
At the Dec. 14 school board meeting, Rahill presented the first interim financial report which was approved by the board later that evening, although Trustee Peter Morgan voted against it and suggested the district take a serious look at the budget. After Gov. Jerry Brown unveiled his final budget proposal in January, Rahill said BUSD would need to make $800,000 in continuing adjustments for the budget to become balanced.
The operating deficit of $1.9 million outlined in the second interim financial report is slightly higher than the $1.8 million figure in the first report. Rahill said the 2017-18 deficit includes one-time spending funds of $900,000 and a $1 million operating loss for general ongoing operations. It does not include costs for negotiations with the district employee groups.
According to Rahill, BUSD receives the majority of its funds from the state and its Local Control Funding Formula (LCFF). For BUSD, the LCFF provides $8,278 per student and includes a base grant as well as a 20 percent increase known as a supplemental grant for students in enrolled in the free or reduced lunch program or are English language learners or foster youth. Rahill noted that 24 percent of BUSD students fit into the three above categories.
The 2017-18 report also includes LCFF funding at the proposed state gap factor of 44.97, an LCFF funding reduction for 91 fewer students, annual increases in operating costs and program costs from the Local Control Accountability Plan (LCAP). This document provides a detailed summary of district goals on state and local priorities and is required to receive LCFF funding.
A number of factors will affect BUSD’s budget for the coming year. Rahill said the district’s enrollment is projected to decline by 69 fewer students. Based on the state budget approved in June and the trend of declining student enrollment that has persisted at BUSD in the last few years, BUSD has adjusted its budget by $800,000 for the 2018-19 school year. The state budget information will be updated in May for Brown’s May Revise Budget Proposal, and the projections over the course of multiple years will continue to be updated as the state makes revisions and adopts a final budget for the outer years, Rahill wrote. Additionally, Rahill noted that contract negotiations for employee groups have been settled for 2016-17 but not for 2017-18, thus costs for negotiated salary settlement are not included in the 2017-18 budget.
Staff is recommending the board approve the second interim financial report to be filed with the Solano County Office of Education and California Department of Education. After Brown delivers his budget revise in May, Rahill said the district would report back to the board with potential impacts on the school budget, provide a draft budget at the end of May and a final school budget in June.
In other business, Dr. Leslie Beatson, assistant superintendent of educational services, will provide new data from the 2017-18 LCAP and the board will be highlighting the district’s instructional coaches.
The board will meet at 7 p.m., Thursday, March 15 in the Benicia Unified School District Board Room at the district building on 350 East K Street. There will be an earlier closed session at 6 p.m.
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Well that should put a damper on the BTA negotiations. It’s hard to negotiate a significant salary increase when your employer is nearly $2 million in the red. And the deficit will get deeper with declining enrollment.
Teachers should be compensated well. But this does not look like a favorable position.
It’s a tough problem and one being faced by most school districts which is why you see school closures in the news. Our country’s approach to education is probably the most expensive in the world and, unfortunately, has in recent times been lacking in results commensurate with the expense. Benicia does have a good school system…recently 2 families with young children moved into my neighborhood specifically to have their kids go to school here. So maybe our ADA will increase enough to keep the schools open. Why not hope for the best while planning for the worst.
Agreed. The state should make education a higher priority by revamping CalPERS pension benefits, thus saving money that could be directed towards education. That would be a good start.
The education pension is the same as CalPers and is called Sters. Going to S/S on all new hires would be a good move with an opportunity to join a 401K also. It would take time to have a major effect. But no better time than to start now.
See my comment below. I did not clearly state my message. By state constitution amendment, 45% of CA’s general funds must go towards public education. CalPERS benefit funding gaps are diverted general funds. So every dollar diverted costs education 45 cents.
CalPERS benefit gaps come from the irresponsible actuary table returns of 10%. Every time the CalPERS investment returns didn’t reach 10%, the state had to fill the gap by diverting general funds. Hence the problem.
Bob, you have posted many times regarding the budget time bomb coming. A major component of the looming deficits are pensions. Some of the CalPERS funding gaps are being shifted back municipalities. Some of the gaps are being funded by state general funds.
Where is the source on assumed investment returns of 10%? I can find where they were assuming 8.25% for a long time (the fund has, since 1988 averaged 8.8%). I can’t find 10% (nor other than your comment, have I seen that before).
The big problems have been 1) Gray Davis increasing benefits (and cities and counties following suit) to 3% at 50 for safety employees which means pension of 90% salary at 50 years old…with no contribution to pay for it (a huge boost in pension for the then existing workers, many of whom took it), and allowing pension spiking (also not paid for in contributions). Erratic returns (0.6% in 2016, 11% in 2017) have been a problem, but overall the investment returns are good. But the other big hit for cities is the program in place to reduce the assumed investment returns which is walloping cities and counties who increased pensions in contract negotiations without paying for them: the bill is now coming due with increased contributions.
Sure, you can point at pensions as a culprit, but then you might also have to pay teachers a living wage when they start; but you can’t afford to do that either. There is so much waste and bureaucracy involved in the “institution” of public education that it will (and is) eroding. We might keep the pocket of BUSD funded longer than some others, but the system is a Ponzi scheme based on an ever increasing population, just like SS (which is also broke).
Teachers are not in CalPERS. They have a separate pension, CalSTRS.
You miss my point. So much of the state general funds are diverted to make up benefit gaps for CalPERS. For every dollar diverted, 45 cents would have gone to education.
The CalPERS budget disaster is looming over every budget in the state. If not reorganized it will suck up all residual funds available for other budgets. If we want to properly fund education, we need to reorganize CalPERS