Staffing cuts may just be necessary to balance budget
SMMUSD HDQTRS It’s going to be a long budget season.
In one of his first acts as interim Chief Financial Officer for the Santa Monica- Malibu Unified School District, Dr. Stephen Hodgson broke some bad news to the Board of Education: The SMMUSD is projected to see approximately $2.7 million in deficit spending for the 2007-08 school year.
A Multi-Year Financial Projection (MYFP) worksheet that Hodgson presented to the public during a late Wednesday afternoon workshop illustrated that the district will take in approximately $3.2 million less during the upcoming fiscal year than it received for the current one — roughly $78.4 million.
In the 2007-08 school year, the district is projected to receive approximately $75.3 million.
The MYFP assumes that the district’s spending habits don’t change from year to year.
Though total revenues next year are expected to be down, total expenditures are projected to increase by more than $26,000.
Affecting the revenue stream into the district are declining enrollment numbers, which are expected to decrease by about 181 students next year. The district’s enrollment has continually dropped the past few years due to the moratorium on students who reside outside of the district being allowed to cross the city’s boundaries to attend school.
“I’ve been looking at enrollment data and declining enrollment for a while,” said Superintendent Dianne Talarico on Thursday. “I was not surprised by it.”
The MYFP indicates even more problems in the near future. If spending habits remain the same, deficit spending will gradually increase in the coming years — from a deficit of $3.5 million in 2008-209 to $4.2 million in 2009-10. Financial Oversight Committee Chairman Paul Silvern seems concerned that the MYFP dictates that there would be no increases in staffing costs for the next three years, especially considering that salary negotiations with administrators and classified staff are expected to take place within that time and could potentially up the amount needed to cover costs.
“That is a fairly stringent assumption,” Silvern said.
Approximately 80 to 90 percent of the district’s expenditures are related to personnel expenses, including salaries and benefits. Considering the growing deficit looming in the district’s future, it seems unlikely that the budget can be balanced without cutting some personnel, according to Hodgson.
The workshop was meant to apprise the board and the public of the district’s financial situation before school administrators begin providing some possible solutions to help the district achieve financial stability in the next three years, Talarico said on Thursday.
“We know that we have to align our staffing level with our current enrollment,” she said. “We think we are going to be able to deal with this situation through attrition and then we would not backfill those positions.”
One way the district could draw in more students who live in the district — but do not attend public schools — is through the hiring of a public affairs officer, according to Rebecca Kennerly, a long-time district volunteer.
The public affairs officer would be a source of information regarding the district for the community to draw upon and could help attract new students, Kennerly said.
She projected that the officer could potentially bring in about 25 to 50 new students a year.
“You would only need eight students to pay for the PAO and the rest is revenue,” Kennerly said.
Acknowledging that certain “advocacy groups” would not look fondly upon some of the potential budget solutions that is to come in the next few months, Hodgson presented a list of cost-cutting measures that the board could consider. Perhaps one of the most controversial suggestions is to cut the number of full time equivalents in kindergarten through third grade from 168 — the current level — to 159.
Also suggested is to move the annual contribution from the Building Fund to the ongoing Major Maintenance Account by about $500,000. This would save the district up to $1.5 million over three years, Hodgson predicted.
“That’ll probably be true for the majority of these things that end up on this list,” Hodgson said.“Inaction and failure really are not options. We have to move forward in a systematic way to address this deficit.”
Originally published in the Santa Monica Daily Press print edition on March 23, 2007. Read the original PDF.