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The San Ramon Valley Unified School District celebrated a rare piece of good news last week amid funding challenges at the state and district level, with its 45-day budget revision pointing to a more optimistic picture than what was foreseen in previous projections.
The district is receiving $34.8 million more in state funding under the governor’s final budget approved June 29 than SRVUSD officials had anticipated in the district’s own budget, which was adopted prior to an earlier June deadline.
The state funding increase and just over $11 million in expenditures and transfers were the highlights of the 45-day revision presented by Vincent Morales, assistant superintendent of business operations, at the July 28 board meeting. It marked his first major budget presentation at the helm of the department following the departure of his predecessor Danny Hillman.
The increased funding triggers a number of memoranda of understanding agreed to in previous union negotiations, restoring 11 full-time equivalent elementary counselor positions and 3.4 FTE social worker positions that had been axed in the district’s original budget, as well as removing furlough days for SRVEA members and providing a 1.5%, one-time payment to CSEA members.
Those measures along with a new requirement for 14 weeks of paid pregnancy disability leave for public school district teachers effective at the start of next year – projected to cost $1.1 million in unrestricted expenditures – account for a total of $6.95 million in additional spending compared to the district’s original budget passed in June.
The remaining $4.1 million in adjustments consists of transfers between funds, with $1.87 million being transferred from unrestricted to restricted funds for Chromebook reimbursement, $1.2 million being transferred to a restricted facility use fund, and $1.02 million being transferred to the 3130 Crow Canyon restricted fund in order to better track expenses associated with managing the new property that will soon host the district headquarters along with existing tenants.
The additional state money consists of nearly $25 million in student support and professional development block grant funding and $306,199 in learning recovery emergency block grant funding – both restricted, one-time funds – and nearly $9.6 million in restricted ongoing funding for special education.
The student support and professional development grant was something the district’s unions had been holding out hope for, with the previously negotiated MOUs contingent on those funds passing in the final state budget.
After accounting for the costs associated with those MOUs, Morales recommended that the district use half of the remaining $13.2 million to bring its reserves up to the 7% required by board policy, which has not been met in the past several budget cycles.
“It really helps us in a lot of different ways,” Morales said. “I need to remind the board that 8% is barely enough to cover one month’s worth of payroll for the district, and our credit rating for bonds has been notched down for any kind of bond sales in the future because our reserve hasn’t met our policy. So this would put us in good standing the next time we go out for credit rating for when we sell the bonds.”
But this year’s state budget wasn’t all good news, according to district officials, with Morales noting that its special education services continue to be underfunded despite a 34% increase in base funding from the state, with SRVUSD on the hook for the remaining $45 million in costs.
Superintendent CJ Cammack criticized the “manipulation of Prop 98 at the state level”, joining the CTA and other state education advocates in voicing frustrations about the alleged withholding of nearly $4 billion in school funding under the final budget, of which he estimated $18 million was intended to be ongoing funding for the district.
“When the state manipulates Prop 98 in that fashion, not only are they dealing with their state budget issues on the backs of our classrooms and our students and our staff, but when they put it in the rainy day fund in at the state level, that ongoing money that should become coming to us as this is the new baseline for ongoing funding,” Cammack said.
“They turn that ongoing funding into a one-time fund, because when they spend that money from the rainy day fund, we just get it one time,” he continued. “And so really, it’s incredibly frustrating when Prop 98 is designed under the State Constitution to promise a certain amount of money to education – and that money is intended to be ongoing – and then they manipulate that and hold some of it back.”
As Cammack noted, the $3.9 million in funding being withheld by the state – a temporary measure of precaution, according to Newsom – is set to be paid into a rainy day fund pending actual revenues compared with projections in the current budget cycle.
“At some point in time we will receive something from the rainy day fund – us in school districts are looking around saying it’s raining; it’s time, but when they do that with an ongoing fund, it’s just worth noting that it becomes a one-time fund to us,” Cammack said. “And I think that is just a remarkable failure at the state level in how they’ve passed this budget and pulled back Prop 98 dollars, which should be coming to our schools and our classrooms.”
“And then they chastise us when we use one-time funds to provide really needed services and then complain that we can no longer do them,” Area 5 Trustee Rachel Hurd added. “I mean it’s just a vicious cycle.”
While the enacted state budget “modestly improves SRVUSD’s financial outlook”, according to Morales, he pointed to declining enrollment and the new paid pregnancy disability leave requirement as ongoing strains to the district’s finances, as well as the continued underfunding of special education programming.
In the meantime, Morales and the district will be awaiting the Aug. 31 legislative deadline for the passage of trailer bills to the budget.
“As of now, even during the summer, our staff in business services is busy closing the books,” Morales said.
Morales is set to return to the board to present the previous fiscal year’s unaudited actuals on Sept. 15, with an updated beginning balance for the current year.
