The Hollister School District Board of Trustees solved a $1
million deficit by dipping into its reserves and narrowly passing a
$42 million budget Tuesday.
Hollister – The Hollister School District Board of Trustees solved a $1 million deficit by dipping into its reserves and narrowly passing a $42 million budget Tuesday.
The 3-2 vote to pass the 2005-2006 budget transferred – on paper – slightly more than $2 million dollars from a reserve fund into next year’s beginning general fund, barely keeping the district out of the red ink.
Interim Chief Business Officer Michael Slater presented the budget, pointing out that net expenses will outpace net revenues by $1.1 million next year.
“This is the cleanest, most detailed, exact budget I’ve ever done,” Slater said. “And also the saddest.”
Slater was coaxed out of retirement by Hollister School District six months ago specifically to create this budget while administrators searched for a new business director.
Slater said teacher and employee salaries constitute about 85 percent of next year’s budget, nearly 5 percent higher than the industry average. During the meeting, Slater urged the board to adopt polices to lower that percentage in future years. In previous years, teacher and employee salaries had gone as high as 88 percent of the annual budget, but decreased after 37 teachers were laid off in May.
Slater warned the board that the district cannot operate for the 2006-2007 school year with current budget assumptions, which predict the district will end that school year with a $600,000 deficit. If expenses are not cut, the district will be operating at a $2.9 million deficit by 2008.
Slater said Wednesday that the district faces “real trouble” in the coming years, but remains confident that corrective action will be taken.
“The board understands the problem and will take action,” Slater said.
The $2 million paper transfer significantly reduces the district’s reserve fund, established during years of increased enrollment and higher state funding, Hollister School District Superintendent Judith Barranti said Wednesday in an e-mail to the Free Lance.
“Even though we have made significant cuts during the past three years, our reserves are almost depleted,” Barranti wrote.
According to Barranti, the district will continue to explore ways to reduce all expenses and asked parents and community members for suggestions.
“There is no easy remedy to the financial problems facing our district,” Barranti wrote. “Every cut hurts our students.”
Hollister Elementary School Teachers Association President Jan Grist addressed the board during public discussion of the budget.
“We’re all on the same boat and our passengers are the school’s children,” Grist said. “And our ship has sprung a leak.”
Grist was “dismayed” by the board’s decision to transfer the $2 million to the general fund and by stalled teacher contract negotiations. Two weeks ago, district negotiators declared a unilateral impasse in those talks and turned the matter over to the Public Employee Relations Board.
“I think that the board did everyone in the community a disservice by playing with that money,” Grist said.
Board member Dee Brown voted against adoption of the budget Tuesday because of a number of new contracts attached to the budget in a single lump sum. Brown did not want to approve of all of the new contracts at once because she said that the board did not have enough time to evaluate and discuss each one.
“There were a few contracts that I wanted to look at more closely,” Brown said.
One of the half-dozen contracts Brown wanted to examine was a $180,000 contract with Extreme Learning, a company subcontracted to provide 80 below-average students with additional instruction time. Brown said that before should could evaluate the program’s results, a control group needed to be tested for purposes of comparison.
Brown was disappointed with the budget, but said that the board had done the best it could. In the last two years, the district has had to cut more than $5 million from its budget.
Among the problems contributing to the district’s financial woes, Brown cited teacher salaries and the sewer moratorium, which has effectively preventive increased enrollment as two factors.
But Brown said that not all of the problems were local. Brown worries about the additional burdens for the school district if Gov. Arnold Schwarzenegger’s proposed budget passes in its current form, shifting the state’s 2 percent contribution to the State Teachers Retirement System to local school districts and teachers. The move would cost Hollister School District an additional $400,000 next year.
“We are not alone,” Brown said. “There are hundreds of districts throughout the state that are facing the same problems.”
Brett Rowland covers education for the Free Lance. He can be reached at 831-637-5566 ext. 330 or [email protected].
