In unusually tough language reflecting the Hollister School
District’s deep financial problems, County Superintendent of
Schools Tim Foley warned administrators and the board of trustees
that the district is on the verge of a fiscal crisis because of
a
”
leadership breakdown
”
and
”
inadequate budget development,
”
among other problems.
Hollister – In unusually tough language reflecting the Hollister School District’s deep financial problems, County Superintendent of Schools Tim Foley warned administrators and the board of trustees that the district is on the verge of a fiscal crisis because of a “leadership breakdown” and “inadequate budget development,” among other problems.
The district received a memorandum from Foley this week notifying officials of his conditional approval of their budget.
Those conditions include a 90-day deadline to create a budget that maintains the district’s reserve budget at state-mandated levels. If that does not happen, Foley has said he will begin the process that could lead to a start takeover of Hollister’s largest school district.
In the memo, it’s clear that Foley wants to keep a close eye on how the district is operating from here on out.
Foley wants to review the board’s agendas and minutes in order to monitor the district’s activities and he wants to see settlement disclosures with school unions before they are approved by the board. Foley also wrote that the district will have to get his approval before it can issue any debt not approved by voters.
In an interview, Foley downplayed management failures in the district, stressing his oversight role.
“It is my responsibility to provide oversight,” Foley said, adding, “it’s a supportive, rather than policing, action.”
Foley also said that while the unyielding guidelines were prompted by HSD’s financial woes, they resulted from a combination of factors at the state and local levels.
“It’s a state problem exacerbated by local conditions,” he said. “Specifically the (sewer) moratorium and the zero-growth factor.”
In June the HSD board solved a $1 million deficit this year by dipping into its reserves and narrowly passing a $42 million 2005-2006 budget. The 3-2 vote transferred on paper slightly more than $2 million dollars from a reserve fund into next year’s general fund. Next year, the district will not have near enough money left in its coffers to meet the 3 percent minimum reserve for economic uncertainty required by the state.
HSD, which has been using reserves to balance its budget for the last two years, will be in a position to request an emergency state loan in the 2007-2008 school year, according to June budget projections. However, such a loan would prompt a takeover of the district by the California Department of Education.
The board recognizes the district’s problems and believes the county office of education’s conditions will help facilitate the budgetary process and imminent cuts, Board President Margie Barrios said.
“I think it is going to be helpful to the board,” she said. “The budget situation has to be watched closely. This is something we cannot ignore.”
Board of Trustees members have also discussed creating a budget advisory committee that would assist them with budget cuts, Barrios said. The committee would be comprised of teachers, parents, district staff, board members and other community members and would work with the board to determine the best way to balance the district’s budget.
“With the budget advisory committee, we can really get into the nitty-gritty parts of the budget,” Barrios said. “It also brings new ideas and perspectives to the table.”
The board will also be more diligent about examining the financial implications of hiring new staff members and creating new positions, Barrios said.
Board members have already begun taking steps to prevent a state takeover of the district, which Foley called a “real possibility” last month.
The district has filled a key vacancy in its top leadership by hiring Ron Crates as interim superintendent. Board members are also narrowing their search for an interim chief business officer, Barrios said.
However, the district still faces several challenges, including balancing its budget in 90 days (by late October) and negotiating a new contract with district teachers in the coming months.
Undaunted, Crates, who started Monday, said the challenges have “energized” him. He is certain the district will be able to comply with Foley’s conditions and balance its budget.
“I’m confident that we’ll be able to do the right things by the proper timelines,” Crates said.
Brett Rowland covers education for the Free Lance. He can be reached at 831-637-5566 ext. 330 or [email protected].
