If the Manteca Unified School District doesn’t make structural changes to their budget, it’s possible that by next year it won’t be able to cover the three percent reserve required by the State of California.
On Tuesday the Manteca Unified Board of Education heard a presentation from district administrators that painted the broadstrokes of the financial situation that is on the horizon for the next five years.
And while it didn’t sound particularly good – increases in payments to employee retirement are expected to increase significantly over the next five years and eat into the roughly 25 percent of funding that’s not already designated for employee compensation – there are options on the table to curtail spending and manage the next three year budget cycle without cutting too deeply into programs or services provided for students.
But the days of adding programs or funding at the discretion of the board without doing away with something else in order to fund it may be over.
According to Superintendent Jason Messer, 74.36 percent of the district’s budget currently goes towards employee compensation and that number will rise to 82.76 percent by 2020 after the State of California increases the share into public employee retirement plans to cover an ongoing $74 billion deficit. The difference between those will ultimately cut into programs and the financial flexibility that the district has with certain unrestricted funds.
And because the school district cannot simply go out and generate more revenue – receiving the bulk of their money either through a variety of taxes or money from the State of California for the average daily attendance numbers that they report – that means that the district will have to find ways to make up for that shortfall.
The district is now in deficit spending – pushing out more money than they’re actually taking in on a forecasted model – and that means that without changes, the district could be unable to meet it’s reserve obligations, which are required, by next year. And according to staff, that is not taking into account the recent hiring of five librarians for each of the high schools and the board’s decision to go with an in-house after school sports program as opposed to the MUST program that was designed to help curtail the cost associated with providing recreational opportunities for students. That program alone could end up costing the district $300,000-a-year.
There are, however, options that the district could employ to free up money to help improve the situation in the interim. Those include:
uEliminating the cash reserve requirement designed to protect the district when the State of California was not making disbursements in a timely fashion, which would free up $15.2 million.
Reallocating a portion of the budget which would save $5.5. million.
Reduce the device refresh reserve for Going Digital which would save $1.5 million over three years.
Reduce future textbook adoptions which would save $1 million over two years.
Reduce infrastructure upgrades to save $1 million over three years.
Reduce deferred maintenance to save $1.5 million over three years.
Reduce the general educational transportation budget.
Only the last option – the reduction of the transportation budget – would lead to personnel layoffs.
According to Messer, the issue that the board is facing isn’t something that’s ultimately different than what has happened in the past – noting than in his 15 years with Manteca Unified it has been somewhat standard for the district to allocate funding in order to meet the three-year requirement only to have to readjust as they get closer to the end of that gap.
The board made no decisions on Tuesday about how to proceed with the budget, and no concrete options on how to alleviate funding concerns were put on the table. The budget won’t be formally adopted until June before it is forwarded on to the San Joaquin County Office of Education for formal consideration.
To contact reporter Jason Campbell email jcampbell@mantecabulletin.com or call 209.249.3544.