Ramona school district forecasts deficit next year
Teachers continue to challenge numbers
By Maureen Robertson
Assistant Superintendent David Ostermann’s second financial update of the school year shows that Ramona Unified will be able to pay its bills this year but, unless something changes, it faces projected deficits of $1.7 million in 2013-14 and $8.9 million in 2014-15.
Representatives of the teachers union, however, continue to question the district’s numbers, saying its ending balance traditionally is more than projected.
Despite their differences, district and Ramona Teachers Association (RTA) representatives say they look forward to results of a recent fact finding hearing, held after negotiations between the two parties failed for this year. Superintendent Robert Graeff said a report from the neutral leader of the fact finding panel is expected soon. As of Tuesday, the district had not received the report.
Once the union and district receive the report, the district has 10 days to make it public, Graeff said at the trustee’s March 21 meeting.
“We’re happy to know that there seems to be a desire to continue negotiations,” said Graeff, referring to an earlier comment from RTA’s chief negotiator. “We made this invitation earlier this week…(and are) looking for a confirmation of the date that we can take that next step.”
In his report to the trustees, Ostermann said income is up about $25,000 and expenses are down, leaving a projected ending balance on June 30 — the end of the 2012-13 budget year — of $3.2 million, up about $800,000 from the nearly $2.4 million projected in his first update in December.
The budget that trustees approved in June 2012 showed a projected deficit of $1.3 million for this fiscal year. That was before California voters approved tax increases in November.
The state requires districts to prepare two budget updates, called interim reports, during the year to reflect changes that may occur.
“A good budget is always evolving as your assumptions that you built it on change,” said Ostermann.
Among reasons the projected ending balance changed from December to March, he said, were: former assistant superintendent of education services Cathy Pierce resigned to become superintendent of the Santee School District and the Ramona district has not replaced her; unspent dollars from school sites and department budgets were added to the projected ending balance; and budget lines such as utilities and substitute costs were updated.
“These changes resulted in an overall reduction to our expenditures,” said Ostermann. “That raises that ending balance.”
While the projected ending balance improved, “it still doesn’t solve our fiscal issues,” he said as he discussed assumptions for the coming two years.
New to school budgets this year is the Local Control Funding Formula Gov. Jerry Brown introduced in January. School Services of California recommended a formula to estimate what the district will receive next year, “and we got a 1.35 percent increase,” but that is not definite, said Ostermann.
For 2014-15, the district followed the recommendation of the County Office of Education, 2 percent. Because the state requires all school districts to prepare multi-year projections for the current fiscal year and the next two fiscal years, Ostermann includes the three in his budget reports to trustees.
Declining enrollment will affect the money the district will receive from the state next year, healthcare costs will increase an anticipated 10 percent, and built-in pay increases for employees based on years with the district and additional education is about 2 percent, said Ostermann.
Also, payments on money the district borrowed almost a decade ago will take nearly $400,000 out of the general fund next year and $1.7 million in the 2014-15 budget year. When a previous board borrowed $25 million in 2004, it believed that developer fees would take care of repaying the loan and interest. Because the district anticipates that the trend of “very, very little developer fees coming in” will continue, loan payments will come from the general fund, said Ostermann.
The district projects a savings of $400,000 next year and $500,000 in 2014-15 from retirements and employees leaving the district for other reasons.
The conclusion of labor negotiations may eliminate or reduce the projected deficits, added Ostermann.
He recommended that the district put itself on the state’s “qualified list,” meaning the district is uncertain if it will meet its financial obligations for the next two fiscal years.
In other action, trustees approved a resolution requesting a temporary transfer of $2.2 million from the San Diego County Treasury to ensure that the district has enough cash to meet its June 30 payroll.
“This is being caused because the state has deferred our cash, and they’ve been doing that,” said Ostermann.
In the past, the district has borrowed from its developer fees and then reimbursed that fund when it has received the money from the state.
“Those (developer) dollars are going down, because we’re having to pay the COP, so we’ve lost that safety net,” said Ostermann, adding that the district isn’t certain it will even need the money from the county. “We don’t want to be caught short, because one of the things is we’re not sure how much we’ll get from the state.”
- School district OKs $49.6M budget
- School district heads toward fiscal precipice, county warns
- School district calls back five teachers
- School district to start negotiations for 2012-13
- Teachers challenge district’s numbers
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