The William S. Hart Union High School District has been looking to cut costs to address a budget deficit. As such, the governing board held a special meeting Wednesday morning to review budget projections for the next three years.
During the meeting, Ralph Peschek, the district’s chief business officer, spoke about annual deficit spending due in part to ongoing commitments and extraordinary increases to health and welfare and retirement fund contributions. He and the district’s board of trustees discussed — but did not take action on — a number of options for additional efficiencies and revenue generation.
“We’ve had budget deficits for a number of years,” Peschek said in his comments to the board. “However, due to one-time monies — the infamous Fund 17, where we’ve been putting one-time funds that come from the state above and beyond the (local control funding formla) allocation per student, and also one-time monies over the last two years from federal and state resources tied to COVID — we’ve been able to figuratively kick the can down the street for a number of years because we keep using one-time money when it comes in after the budget’s adopted, and we keep applying that to the deficit.”
Peschek summarized the district’s position by comparing it to a household.
“You get your paycheck,” he said, “you have your bills, and you have a savings account, and every year, we get less in paychecks than we spend, and so we keep dipping into our savings account every year.”
Peschek added that some of his proposals Wednesday to potentially cut the budget deficit had not been reviewed by staff, the board or an audit committee, and so those items would most likely come back to the board either in May or June for the budget adoption process.
Some non-mandatory items the board could consider cutting to save funds, Peschek suggested, include the Comprehensive Alcohol and Drug Reduction and Education program, an athletic outreach training program through Henry Mayo Newhall Hospital, and a program through the Museum of Tolerance.
Another idea Peschek brought up was to hire general counsel to district staff. While such a move would introduce a new cost for this new employee, Peschek said the board would see savings in the long run.
“Our legal issues, specifically tied around special education, are accelerating,” Peschek added.
The board also discussed ideas to generate cash, such as renting out school facilities like theaters through a type of revenue share program. And, though Peschek was hesitant, he suggested at least considering a potential parcel tax that could create income.
The board then talked about generating monies through grant writing. And they discussed possibly advertising Hart schools to attract students from private schools. That could help boost the student population.
According to Peschek, student populations are on the decline.
“One of our challenges is that we are not a growth district,” he said. “We’ve been losing students year over year since 2017, and based on our projections for next year, I believe we’re anticipated to lose 500 more students next year. So, every time we lose one of those students, we lose that funding.”
And not that anyone was talking about cutting staff benefits at Wednesday’s meeting, but, following a conversation about an early retirement program, Peschek brought up one factor that makes the program uniquely challenging.
“When we’re going through the calculations — and this is strictly numbers here,” Peschek said, “benefits — our average cost of benefits and the benefits that we provide, retirement for folks — far exceeds what other districts provide.”
Staff and the board will continue to review and discuss options before adopting a final budget. According to Peschek, the board is set to adopt that budget at the June 8 meeting.
“All things being equal,” Peschek said, “if we take no action between today and June when we submit that budget, it will be qualified, meaning we won’t be able to pay our bills.”
To view the budget study, go to HartDistrict.org and, under “Board,” click “Minutes, Agendas and Board Packets” and search for the April 20 meeting.