SAN BENITO — School district officials are pulling money out of reserves to balance a $99.5 million general fund budget to cover shortfalls in state revenue stemming from falling student enrollment.
Earlier this week, the school board passed the budget showing state revenue dropped to $82.3 million, down from $96.2 million last year, Vicki Perez, the district’s assistant superintendent of finance and operations, told board members during Tuesday’s meeting.
To balance the budget, officials are pulling $1.9 million out of the district’s $45 million fund balance, district spokeswoman Isabel Gonzalez stated Friday, attributing the information to Perez.
“We’re 300-percent more moving money from the fund balance,” board member Ariel Cruz told interim Superintendent Theresa Servellon. “Hopefully, your administration, the finance office, keeps everything the way it should be (and) we get our enrollment to the number that it needs to be where we shouldn’t have to be moving fund balance money.”
This year, the district’s enrollment stood at 9,200 students, projected to drop to 8,700 next year, Servellon told board members.
In 2018, the district’s enrollment stood at 10,520 students, board member Janie Lopez said.
Federal funding cuts
Officials are blaming much of the drop in student numbers on the coronavirus pandemic, which has led many parents to keep their children home.
While the state pays the district about $5,500 a year for every student in class, the American Rescue Plan Act’s Elementary and Secondary School Emergency Relief funding has helped offset the loss of revenue stemming from falling enrollment.
Last year, the district’s federal revenue fund stood at $9.4 million, down from $13.69 million the previous year, Perez told board members, adding emergency relief revenue dropped about $4 million.
Perez said the district is set to continue receiving emergency funding through at least 2024.
“We were sitting in a very healthy budget and we were able to spend but as student counts go down there comes a point where we do need to realistically look at where we are and where we’re going to be within the next couple of years so we’ve already looked at where we can reduce some of that spending,” Perez told board members.
“We’re looking at strategic allocations of our federal funds and our staffing,” she said. “We’re looking at what our student-to-teacher ratios look like to see if there’s anything we need to do on that end. Making sure we’re not frivolously spending is the first part and the second part for us is making sure we’re intentional with what we’re doing with the money. As long as we’re strategic, we should be OK. If it’s not, we can look at a couple of years of it looking really hard. After those three years are over, it could be difficult but I’m confident we can work together to make sure that that is not where we’re going to be.”
Trimming budget
Board member Orlando Lopez questioned how officials planned to offset the loss of emergency funds.
“Eventually, this ESSER cushion is going to go away,” he said. “Once that cushion is removed, then my concern is the sustainability to continue moving forward, and we all know, just by the numbers that you’re showing us right now, it’s going to be very difficult to sustain that moving forward if we don’t do something urgently to increase our enrollment — our ADA.”
In response, Servellon said officials are cutting spending.
“We have been looking at strategic spending and strategic allocations,” she said. “I know that just recently I sat down with special education and we did look at those numbers. Then we looked at our assessment personnel, which we had increased by six. So now we went back looking at those numbers, looking at our ADA, looking at our decrease in enrollment and looking at our current special ed enrollment and their needs and we were able to ensure that we reduce that six to three … and still be able to service our kids at the level they need to be serviced.”
Servellon said she reallocated $800,000 for staff.
“We’re also cleaning and scrubbing kind of like our personnel, our openings, making sure again strategic placement,” she said.
“We want to make sure we have the right amount of teachers at the forefront helping our kids but also looking at all our areas across the board, so today we were also able to cut down two other areas, or two other positions, and again, this is still ongoing,” she said. “So we’re going to continue to curate our staff so it’s appropriate for our students but also keeping in mind that it’s going to continue to evolve. Are we looking to make sure our fund balance stays where it needs to be? Yes. Remember, (we allocated) $20 million into fund balance because of ESSER III … That should help us a lot at this point. Will we have to continue to dip into fund balance? I don’t foresee that.”
Magnet school enrollment
Servellon said she was also reviewing the district’s magnet school enrollment.
“Were we drawing kids into those magnet schools? If you look at the data, we’re not really drawing them in,” she said. “As a matter of fact, some of the magnet schools reduced the number of students going to those campuses. So what do we need to do to make sure that our magnet schools are attracting students, because we have awesome offerings, and maybe it goes back to our marketing. We invested a lot into those three campuses and are we getting our return on investment — most importantly our academic return on investment for our students? That’s where we’re still looking deeply at what we need to do academically and matching the funding to that.”
