The William S. Hart Union High School District became the first school district in the Santa Clarita Valley to finalize its budget on Wednesday, adopting a $247.7 million spending plan that is projected to exceed the year’s incoming revenues by $3.8 million.
By this time next week, nearly every school district in the SCV will have approved its budget as Castaic, Newhall and Sulphur Springs are each expected to approve their financials for the upcoming school year at their next district meetings.
“In regards to the budget, it’s always nice have it prepared and approved early,” board member Bob Jensen said. “Preparing a budget is difficult in California, because sometimes you don’t know what will be funded or how the government will act.”
Still, Jensen added, “we take the process seriously and spend a lot of time with community stakeholders to make sure taxpayers’ dollars are well spent.”
Chief Financial Officer Ralph Peschek said the district’s revenue projections are reflective of the May revision of the governor’s 2018 budget proposal, Peschek said, as well as the projected student enrollment for the 2018-19 school year.
The district expects to begin the 2018-2019 school year with a beginning fund balance of nearly $32.8 million, according to the staff’s budget presentation. However, the district will spend nearly $3.8 million more than the $244 million it will accrue in revenue in the next fiscal year.
Certificated salaries are the district’s greatest general fund expenditure, with more than $104 million, or 42 percent, of the fund dedicated to the pay of certificated employees, according to a presentation from Peschek.
Like a multitude of other school districts in California, employee benefits are costly to the Hart district, which expects to spend $56 million, or 23 percent, of its 2018-2019 general funds on the costs.
The district expects a net funding decrease of nearly $3.8 million in the upcoming fiscal year, the budget report reads, but, despite the losses, the Hart district will still maintain almost $7.4 million in reserve.
“While $7.4 million is a significant amount,” the budget states, “the reserve is less than two weeks’ payroll,” since monthly payroll for the district exceeds $14 million.
Peschek said long-term pressures facing the district include post-employment benefit obligations, the annual monitoring of the Federal Affordable Care Act, increases in the district’s contribution to employee health and welfare insurance benefits, technology updates and increases in the district’s state employee retirement contributions.
“While the district has demonstrated the ability to manage these and other costs through the 2020-2021 school year, we continue to forecast and monitor projected changes in future years,” which helps the district maintain its basic levels of operations and ensure fiscal solvency, he said.
With the closure of Einstein Academy, the district realized a modest one-time increase in the 2018-19 school year, but officials responsible for budget preparations noted the district has experienced decreased enrollment for the past seven years, and they forecast that attendance will only continue to decline in subsequent years.
While district revenue is projected to increase approximately $13.5 million in 2018-19, the budget states it will decrease by $3 million in 2019-20 due to the loss of one-time funds and declining enrollment.
“We do the best we can to be fiscally responsible for the benefit of the students and the district,” Jensen said. “It’s difficult to anticipate what will happen in Sacramento, and how things will be funded since changes can be made at anytime and you have to be prepared.”
If there are any changes, according to the budget presentation, then a meeting will be held on Aug. 15 to discuss the revised adopted budget.