Another look at next year
’s budget for the Morgan Hill School District is on the agenda
for Monday night’s School Board meeting. Although trustees must
approve a budget by the end of the month – so Monday is their last
chance – it will come before them again because of the nature of
public school funding. The budget is
down slightly from last year, Deputy Superintendent Bonnie
Tognazzini said Wednesday.
Another look at next year’s budget for the Morgan Hill School District is on the agenda for Monday night’s School Board meeting.
Although trustees must approve a budget by the end of the month – so Monday is their last chance – it will come before them again because of the nature of public school funding.
The budget is down slightly from last year, Deputy Superintendent Bonnie Tognazzini said Wednesday.
“Because at the moment it doesn’t have any carryover in it,” she said. “Your adopted budget is typically always a little less than a prior year because you always build your budget without carryover. We do have step and column (pay) increases built in, which is an additional expense.”
The biggest differences between this year’s budget and last, said Tognazzini, are three unexpected resources .
“The three resources that came at the tail end of the year were absolutely wonderful news,” she said. “The RDA funding, the settlement (of a lawsuit against Jacobs), both of which are one-time funds, and the increase in ADA (average daily attendance), which will be ongoing. All three were a big relief for us.”
Tognazzini said more information will be available in the summer.
“We will really know more after the 30th, when the state budget is supposed to be passed,” she said. “While the governor’s May revise had good news for us, nothing will be official until the state budget passes.”
Last year, the Legislature did not pass a budget until well after its June 15 deadline, but by law, California school districts are required to have a budget in place before the start of the new fiscal year on July 1.
The budget Tognazzini will present to trustees for approval has no surprises, she said.
“There’s nothing that they haven’t seen before,” she said. “
Trustees cut nearly $900,000 from the budget in early April, and could have had to cut $600,000 more, until Gov. Arnold Schwarzenegger released his revised May budget. The revised budget included an increase in COLA, or cost of living adjustment, for districts, plus more, which made it possible for Tognazzini to tell trustees they didn’t have to make the additional $600,000 in cuts.
“It is anticipated there will be full funding of a 2.41 percent cost of living adjustment across all programs,” Tognazzini told trustees in May. “This is an increase from the 1.84 percent projected in January. Also, school districts receive about 97 cents on the dollar for the entitlement of state funding; it is anticipated we will now receive 97.9 percent cents on the dollar. These two increases provide for an additional $1,255,276 of revenue in the 2004-2005 school year.”
The board has cut $6.1 million over the past two years. Declining enrollment and a growing state budget deficit were cited as reasons for the shortfalls.
The general operating budget – excluding categorical funds – for the 2003-2004 school year was $57 million.
Upcoming administrative changes may have an impact on the budget. Although her contract runs through next June, Assistant Superintendent Denise Tate will resign, effective August 31. Assistant Superintendent Claudette Beaty’s contract expires June 30. An elementary principal needs to be hired, as Nordstrom Principal Nancy Milo resigned at the end of this school year.
And there may be other changes.
“I am not ready to release the changes because I don’t have all the people in place,” Superintendent Carolyn McKennan said Thursday. “I could find myself having to make some adjustments.”
When asked if a principal for Nordstrom had been found, she stressed she is still looking for an “elementary principal.”
“Once we have the people, we’ll start looking to see and make decisions which talents can best be utilized at which school,” she said.
During Monday’s meeting, Tognazzini will also give an update on the annual audit. The financial audit report for the 2003-2004 school year completed by Goodell, Porter & Fredericks was released in January.
“Overall, I thought it was a good audit,” she said. “Actually, we helped them to get to those findings. If we have concerns in our own budget, we discuss them with the auditor … The caution that we were spending down our reserves was resounding. It was an extreme concern to everyone. The resources coming at the tail end of the year helped the district to remain solvent, without a doubt.”
The state requires districts to maintain a reserve fund of 3 percent of their general operating fund. The Morgan Hill School District’s had fallen to 1.7 percent. Districts across the state experienced similar difficulties, and the state will allow districts until 2005 to replenish their funds.
Tognazzini told trustees in May that the changes in the governor’s budget would allow the reserve to come back up to 3 percent.
“There were three findings in this audit, and you are typically required to do what you need to, to get it done before the auditors come back,” she said. “This gives us an opportunity to look at each finding.”
Three main problems the report cited were unbudgeted spending, poor estimates of actual costs and lack of communication.
“The district should institute procedures to assure that no funds are spent without budget authorization, and the district should implement a position control system in order to more effectively control personnel expenditures and to ensure accurate budget projections,” Auditor John Goodell recommended in the report.
One of the items trustees will not see included in the budget for next year is operating expenses for Machado Elementary.
As a part of a motion on budget cuts in April 2003, trustees unanimously approved the “temporary suspension” of operations at Machado, with the intent that the money from the facilities fund will be used to match available state funds to replace the current classroom building.
The school, located at 15130 Sycamore Ave. in the foothills west of the city, is the district’s oldest school at more than 100 years and has had students on the campus all those years.
Trustees recently gave the go-ahead to proceed with renovations this summer, with funding provided by the state and the Machado Heritage Society. But if the school, which served one first and one second grade class of students in the Paradise Valley area, is to open next year, it must have an operating budget.
“Machado is not built into next year’s budget at this time,” Tognazzini said Wednesday. “I think the plan is to have a community meeting with Carolyn (Superintendent McKennan) and others to discuss educational strategies.”
The Morgan Hill Board of Education will hold its regular meeting at 7 p.m. on Monday at the District Office, 15600 Concord Circle. Details: 201-6000.
