A $5.5-million deficit is projected to hit Coachella Valley Unified School District’s reserves fundÂ next school year, with officials saying at Thursday’s board meeting that the financial challenges the district faces are considerably worse than they initially believed in March.
State law requires school districts to keep 3 percent of the general fund in reserves in case of emergency, which would be $7.2 million in Coachella Valley Unified.
Several factors have contributed to the deficit, including:
- Decreased state revenue of about $400,000
- Projected declining enrollment that would lead to a loss of roughly $2.7 million
- A loss of $1.4 million in Title I funds the district did not spend this year. This is moneyÂ allocated to school districtsÂ with a high percentage of low-income families.
- A pattern of deficit spending during the 2016-17 fiscal year that is projected to continue for the next two years
- Increased responsibility for employee benefits and special education costs totalingÂ about $7.4 million over the next two years
The deficit is projected to increase to $9 million during the 2018-19 school year.Â
Officials have already laid out a plan to cut about $19.7 million from the district’sÂ $240-millionÂ budget next yearÂ â including $8.3 million in staffing cutsÂ â but that plan was conceived when the district was expecting a considerably smaller $281,000 deficit to affect the budget two years from now, said Greg Fromm, assistant superintendent of business and finance, at Thursday’s meeting.
“ThisÂ is a situation that will demand your immediate attention,” said Paul Jessup, Riverside County deputy superintendent of schools, in a presentationÂ to the CVUSD board. “$19.7 million. Thatâs a big number. You may not be able to do it all at once. ItÂ may take multiple years, but there will need to be action taken soon.”
Jessup warned the board members that they would not be able to rely on revenue to rescue them. Although the state began injecting billions more intoÂ education in 2013, resulting in significantly higher revenue for districts like CVUSD with a high percentage of at-risk students, the state has almost maxed out its K-12 funding goal. That meansÂ Coachella Valley Unified will no longer see increased funding from the state other than small, cost-of-living increases.Â
On top of that, local governmentsand school districts across the state bear an increasingly heavy burden for employee pension costs, which are expected to cost the district about $2 million more next year.
On June 1, CVUSD will submit a plan to the Riverside County Office of Education detailing how it expects to reduce its expenditures. If the county does not believe the district will be able…