The William S. Hart Union High School District’s governing board approved a budget for the 2021-22 school year last week that details an $8.9 million deficit for the district.
However, the district’s chief business officer said Tuesday school leaders are optimistic moving forward, with plans to look at efficiencies and spending reductions in response to further decreases in enrollment that continue to impact revenue projections.
Another complication for district officials is the rising cost of salaries, which is part of an ongoing negotiation with both the district’s teachers and classified staff, through Hart District Teachers Association and California State Employees Association Chapter 349, respectively.
Overall, the district has a projected revenue flow of $278.4 million for the 2021-22 school year and $287.4 million in expected expenditures. That deficit, according to the three-year projection reported this week by the Hart district, increases year after year.
However, Ralph Peschek, the district’s chief business officer, said Tuesday the district expects to meet all of its current financial obligations due to its “positive cash flow.”
“When I say positive cash flow, that means we have always on hand to pay the bills,” said Peschek. “And so, with the budget, while you’re adopting big numbers for the whole year, or monitoring how much money we have in the bank and when payments are received, we actually chart out in advance what payments we expect in what months on what dates.”
The district received help from the state last year as a result of COVID-19, including approximately $60 million in one-time grants in order to assist students. However, those restricted funds were specifically set aside by the district to ensure wellness programs, distance learning and public health guidelines were adhered to on campuses by both staff and students.
A primary issue facing the district has continued to be the decreasing enrollment for the past seven years (outside of the 2017-18 school year), and this decline is forecast to continue for the coming years.
Peschek said the decline in students — the district saw a decline of about 2,182 students between the 2019-20 school year and the 2020-21 school year, with a projection of another 400 leaving this fall — creates ongoing budget challenges for the district.
“With COVID, we saw a larger decrease in enrollment this year than we had anticipated,” said Peschek, in reference to the declining numbers from the previous year and the years moving forward. “And so, every time you lose a student, the state doesn’t pay for that student, so it does have a negative effect on enrollment.”
A large portion of a district’s funding is determined by schools’ average daily attendance, or ADA. Each loss of enrollment represents a budget impact of more than $9,000, based on recent state funding figures.
The issue of declining enrollment continues to be a problem around the state, and Peschek said the Hart district would not be alone in looking at additional efficiency, reductions and expenditures in order to respond to decreasing revenue.
Board member Joe Messina said Friday the changing landscape of education, coupled with the families that left Los Angeles County or the state of California due to COVID-19 restrictions, have played roles in the decline. He also added that housing affordability in Santa Clarita will be a factor in the district’s attendance numbers in the future.
“I think we’re going to see some massive changes in education, but right now … I don’t think our numbers are real,” said Messina. “I think that they’re going to change … and what’s going to end up happening is we’re going to have to keep adjusting about every quarter.”
Board President Cherise Moore called the budget adopted Thursday a “living” and “ever-changing” document, but said the district plans to provide the same quality of education it has always provided in the coming year.
“There’s one-time funding that has come in due to the pandemic that we know won’t be there in the long term,” said Moore, “and making the best fiscally sound decisions that we can with what we know is happening in our district and also understanding that our budget is a living document.”