Approved BUSD budget depicts troubles
District officials say December revise will look better, include state's changes to funding formula
BARSTOW • Barstow Unified School District is expected to spend more money than it brings in through at least 2015, and outside projections show the district running out of cash flow in May and June 2014.
The recently-approved BUSD budget came with a word of advice from the San Bernardino County Superintendent of Schools: ongoing deficit spending will cause an even greater reliance on district cash reserves.
The trend in deficit spending “appears to be attributed to ongoing operational costs,” according to a budget approval letter sent Aug. 15 by Thomas G. Cassida Jr., a county schools business services adviser.
As a result, the district’s $4.9 million in available unrestricted reserves is expected to dwindle dangerously close to the state-allowed minimum of $1.3 million by 2015.
And county school officials projected the district would have on June 30 an estimated cash balance of minus-18.83 percent of the projected 2013-14 Ending Fund Balance.
However, there are caveats — to not only the county’s projection of looming insufficient cash but also to the budget’s general outlook, which school district officials said Friday should later tell the whole story.
Because the district had to prepare their adopted budget well before Gov. Jerry Brown signed the state budget into law June 27, changes in education funding had not been factored in, according to BUSD Superintendent Jeff Malan.
“We are hopeful the governor’s new budget for California is going to benefit our district,” Malan said, adding that “without a doubt” a revised district budget in December will look vastly different than the budget approved Aug. 15.
The centerpiece of this year’s state budget is Brown’s priority to reshape California’s funding formula for K-12 schools as a way to help close the achievement gap for poor and minority students.
The budget allocates $2.1 billion to begin moving the state to a new formula that gives proportionately more money to school districts with high levels of low-income students, those with limited English proficiency and foster children.
Overall, the budget boosts K-12 and community college funding to $55.3 billion. The governor’s budget says that represents an increase of more than $8 million over the 2011-12 fiscal year.
A trailer bill to the budget, Assembly Bill 97, will also provide school districts with more local control over how money is spent — removing previous earmarks for state-mandated programs.
Local control funding should offset at least a portion of BUSD’s deficit spending, according to county school officials.
Wael Elatar, BUSD’s chief’s business officer, said that new flexibility, along with an onus on local accountability, should help too. District officials, however, are still assessing how much so.
“We’re expecting a positive adjustment to our revenue,” Elatar said, “but we haven’t calculated yet how much it will be. We’re still working on the revised budget based on (the state budget and various trailer bills) and we’re seeking guidance from the county because there is a lot of interpretation.”
Malan remains cautiously optimistic and quick to point out there are additional sources of revenue not yet accounted for in the approved district budget, such as the recent solar project.
“The solar project will save us $120,000 the first year,” Malan said.
BUSD is also not expecting a change over last year in Average Daily Attendance — the first for a district which had seen its number of students decline annually for the last seven years.
“In 2006,” Malan said, “we were at almost a peak of 6,900 students and from that point on, we have steadily declined in enrollment.”
Believing that decline has bottomed-out, the district is projecting enrollment to be 5,591 in 2013-14 and to remain steady over the two years that follow.
Some of the issues that the district seems to be facing are still “somewhat of a concern” for Malan, including deficit spending, and Malan said officials have been planning and already taken steps to address that.
Most notably, in February, the district’s school board voted to close Thomson Elementary and Hinkley schools.
Other perceived issues, such as a potential cash shortage, were thought of as premature until the education-friendly state budget is accounted for.
“We don’t have a concern where we’ll ever be in a position where we’ll be in negative cash flow,” Malan said.
In the end, the state’s economic recovery after years of budget shortfalls could paint the most telling picture.
“In reality, this is still tied to the growth of the economy in California; the governor is projecting we are out of a recession and we are on the climb,” Malan said. “I think every superintendent would have that feeling, to tell you the truth.”
The district’s First Interim Financial Report, which will include the impact of this year’s state budget, is due Dec. 16.
The Associated Press contributed to this report.
Shea Johnson can be reached at SJohnson@DesertDispatch.com or 760-256-4126.