After three days of lengthy meetings last week, the Morgan Hill
School District sent out a memo and a spreadsheet from the budget
process team to district employees with a draft of recommendations
for $2.8 million in cuts for the next fiscal year.
After three days of lengthy meetings last week, the Morgan Hill School District sent out a memo and a spreadsheet from the budget process team to district employees with a draft of recommendations for $2.8 million in cuts for the next fiscal year.
The team included representatives from the Morgan Hill Federation of Teachers (MHFT), Service Employees International Union (SEIU) and Morgan Hill Education Leaders Association (MHELA), as well as Superintendent Carolyn McKennan, Deputy Superintendent Bonnie Tognazzini, Assistant Superintendents Denise Tate and Claudette Beaty and facilitator Joe Di Geronimo.
“It was a hard three days,” MHFT President Donna Foster said Monday. “It is not that everyone is in agreement around all of the cuts.”
In the past two years, the district has cut more than $6 million from its general operating budget. A $1.4-$1.7 million shortfall is projected for next year, McKennan said last week, and the district is short approximately $600,000 in ADA, or average daily attendance funds.
The current general fund operating budget is $37.9 million, according to a report presented Jan. 26 when trustees asked for monthly budget updates.
The cuts considered consist of 26 items, including a freeze in step and column increases for teachers, increasing class size for grades 4-12, not re-opening Machado Elementary next year, cutting board stipends and reducing extracurricular activities and athletics at the middle school and high school level.
Items were laid out in spreadsheet form and ranked in four categories based on the groups’ discussion. The items were either listed as “subject to negotiation,” “optional,” “majority” and “consensus.”
Only two items were listed as optional: technology cut, an estimated cut of $25,000; and a facility use fee increase, revenue estimated at $20,000.
Two items were listed as majority, defined as two of the three groups in agreement: categoricals carryover recapture, for $390,000; and a reduction in elementary clerical, for an estimated cut of $56,000.
Four items were not categorized: recapture ADA, $370,000; do not open Machado, $30,000; consider future closing of Burnett Elementary, $350,000; and consolidate transportation, $50,000.
The three groups will hold separate meetings for all members on Tuesday to discuss the spreadsheet.
School Board trustees, who will have to make the final decision on any cuts, were invited to attend the three-day meetings as observers. The recommendations were not on the agenda for Monday night’s School Board meeting.
Part of the budget headache that trustees will be dealing in the coming weeks with is a loss of ADA money from the state due to an increase in student absences.
“Number one on the list (of budget cut considerations) is recapturing average daily attendance,” Foster said Monday. “After that, the items are in no particular order.”
The lost ADA, according to Tognazzini, who heads business services for the district, is approximately $600,000.
“We’re experiencing a very unusual phenomenon,” she said. “We have an additional 120 kids enrolled that we didn’t have last year, yet our attendance is down 130 kids.”
McKennan said the district is looking into reasons that might explain the unusually high number of absences.
According to the spreadsheet, sent to all district employees from the District Office, the budget shortfall, if the new Sobrato High is opened in August as planned, is $2,816,974. The net cost to the district to operate the school for one year, according to the information on the spreadsheet dated Thursday afternoon, is estimated to be $403,000 after a $100,000 anonymous donation.
Estimates given to the board by Director of Construction and Modernization Al Solis at the Feb. 23 meeting showed operating costs, without salary expense, for one year to be at least $350,000.
The budget process team discussed the possibility of delaying the opening of Sobrato High by a year.
According to a note on the spreadsheet, if the decision is made to mothball Sobrato for a year and open it in 2005, “there would be a net savings to this budget shortfall of $253,000.”
Foster said the teachers’ union is not against the opening of Sobrato, but trustees should carefully consider whether the district can afford to open the nearly $80 million school next year.
“This is a point of timing,” she said. “We need to be at the place where we can create a revenue stream so we can afford to open it without cutting jobs and wages.”
Trustee Amina Khemici agreed.
“I’m not against the idea of a 9-12 high school, not against the school itself,” she said Monday. “To answer that question (whether to delay the opening), we have to wait until the final budget is considered. We need to see what comes before us at the March 22 meeting. And then we have to be realistic. To build a house, a beautiful house on the beach, when you don’t have any income, well, people don’t do that.
“I don’t want to have to cut music, I don’t want to cut sports, I don’t want to cut salaries. This has become a very sensitive issue. To me, it is very clear. We all want a second high school, we all want a 9-12 school experience, we all want a smaller school environment, but with all these things coming up, and just look at Live Oak … We all have to work together on this.”
Trustees can also consider not replenishing district reserve funds.
Another note on the spreadsheet explained that part of the shortfall – $400,000 – is raising the economic uncertainty reserve to 2.25 percent. The state requires 3 percent of a district’s general operating budget be held in reserve, but the past two years have been economically difficult ones for districts all over the state, and the requirement has been waived.
The district’s current reserve is 1.7 percent.
Yet another consideration is an early retirement incentive. Last year, teachers who met certain requirements were offered an incentive package that allowed the board to rescind all the 111.5 layoff notices issued in March.
Tate, who heads human resources for the district, is looking into an early retirement incentive for administration and classified employees.
