In my first set of fiscal comments to the community since late last spring, let me take this opportunity to let all Ramonans know where our district stands in terms of preparing our local budget for the coming school year.
First, however, let me take a moment to commend our entire educational community. In the implementation of our current District Goals, I am joined by the governing board in marveling at the energy, passion, and remarkably upbeat spirit that continues to characterize our entire staff and parent community as we all work together to serve the educational and personal needs of our more than 6,500 students. As I regularly talk with members of the community-at-large, it is readily apparent that the families of our more than 6,500 students have a deep-seated desire to do whatever it takes to help our students achieve.
Recent economic news
As our stakeholders may recall, however, the national and state economic conditions last spring required us to trim more than $6.1 million from our local district budget—equating to more than a 10 percent reduction in overall spending. In spite of an infusion of federal stimulus dollars from the American Recovery & Reinvestment Act (ARRA), which is detailed on our District website, we were still forced last spring to eliminate a significant number of teaching, classified and administrative services to the students and families of our district. Although it is only November and the governor is not due to release his budget proposal for 2010-11 until January, district officials are already planning for another very challenging budget year.
Here is the little that we know already about the upcoming budget process. In the past several days, the California Department of Finance has announced that General Fund revenues for the current year are already $2.1 billion short of projection, with personal income tax receipts down by more than 19 percent. With corporate taxes coming in it at nearly 11 percent below projection and statewide unemployment hovering around 12 percent, state officials announced last week that they are projecting that the state will have a $7 billion shortfall for the current school year and an additional $7.5 billion shortfall for the 2010-11 fiscal year.
During the recent summer months, we were projecting that our local budget situation for 2010-11 would be short by $1.9 million in meeting local budget demands. With deteriorating conditions in the state, however, this local shortfall figure could easily worsen. With this backdrop in mind, staff has been working with the governing board to take several important steps to safeguard the district’s resources.
Current district budget approach
First, the board approved a staff recommendation on Oct. 29 to authorize an Early Retirement/Resignation Incentive for teachers. If enough eligible teachers participate in this unique opportunity, the district could register as much as $1.5 million in budget savings over the next 18 months. Even though we certainly want to recognize the tremendous contributions provided to our school children over the past several decades by our veteran teachers, this effort is both an attempt to support staff members in achieving an important milestone in their lives and an essential strategy to safeguard the district’s resources for the years to come.
Second, cabinet officials are intently studying our current fiscal alternatives, including reviewing all major expense and income items in light of the new flexibility afforded to school districts this past summer. Unfortunately, we believe we may have already applied the vast majority of our most creative solutions in the development of our current budget, leaving very few “creative solutions” available.
Finally, cabinet officials are planning to meet with representatives from both employee associations during the next few weeks to see what common ground can be forged in considering additional budget-saving measures. Our interest will be to work closely with association representatives to determine what ideas they might have in reducing district expenses, as well as to gauge their reactions to a variety of administrative proposals well before we enter a more formal period of negotiations next spring.
Certainly, district officials are aware that many other local school districts have already implemented salary rollbacks or furlough days for employees and employee contributions and/or caps on employee health benefits. In Ramona, employee layoffs have become almost a regular occurrence over the past several years. Recognizing that our administration has no desire to consider any of these more austere options for slimming the budget for next year, a great deal of thought, creativity and cooperation will be necessary to avoid one or more of these unpleasant alternatives.
Before closing, I would also like to inform our local stakeholders of a couple of necessary budget expenditures related to facility improvements. In stark contrast to the dire budget information discussed here today, the district continues to maintain nearly $3.9 million held over from a $25 million construction loan from 2004, properly referred to as a Certificate of Participation (COP). This large loan was approved by the board five years ago to complete the construction of Hanson Elementary and the “new” Ramona Community School on Hanson Lane, along with the development of athletic fields on the 40-acre property just north of Ramona High. Because the remaining funds are not adequate to completely finance the proposed RHS athletic fields and because seven-year-old enrollment projections calling for an increasing student population have proven to be misleading, the governing board has approved a much less expensive improvement to the existing athletic fields at both Ramona High and Olive Pierce. Similarly, staff is planning to construct a much-needed restroom facility in the RHS stadium and to repair some badly deteriorating classrooms at Ramona Elementary.
Finally, staff is making plans to replace the exterior windows and repaint the exterior of the district office—a rapidly deteriorating facility in need of immediate attention. The face of our nearly 80-year old building is now characterized by wood rot, dry putty, badly cracked stucco and faded colors. Once all projects are completed, the district will have more than $3.1 million of the original COP still in reserve—a funding source that is a loan to the district and which cannot legally be used for any purpose other than school construction. The remainder of the funds will remain in reserve for making loan repayments and/or for future facility emergencies.
Truly, I do not know what to expect from our state or national leadership over the next few months. Similarly, no one has become very skilled at predicting how the economy will twist and turn. But like our entire educational community demonstrated earlier this past spring, I again have faith—an undying faith—in the high level of talent and dedication of our district employees, in the support that the general community has for our local schools, and in the genuine love that all Ramonans have for our school-aged children.
As each of our local stakeholder groups did last year, please join me once again in making a commitment to working together—closely as never before—in executing with faithfulness whatever plan is eventually approved by our governing board over the next several months to address the daunting financial challenges looming before us.
Looking forward to our rich American tradition of Thanksgiving, I join our governing board in wishing for each of you a very joyous and happy holiday season!