Difficult and sensitive subjects were discussed at the recent Hemet Unified School District meeting.

Bill Sanborn, president of the Hemet Unified School District trustees, began the meeting by addressing the Hemet High School teacher recently charged with sex with a minor. He issued the following statement: “The district was informed last Wednesday night, Feb. 29, of an allegation of possible sexual misconduct by one of our employees at Hemet High School. The Riverside County Sheriff’s Department and Child Protective Services were notified immediately.

“We are deeply concerned any time an allegation of this nature surfaces, because our first and foremost concern is for the safety of our students. … We have also reminded every employee of their obligation to report any suspicion of child abuse within 24 hours. It is the Governing Board’s hope that this unfortunate incident does not reflect poorly on the hundreds of teachers of Hemet Unified who dedicate themselves to the education of our children every day.”

The board then listened to Pam Buckhout, director of financial services, discuss the balance of this fiscal year and the next two.

Each district provides the county Department of Education with a current financial plan twice a year. Hemet’s Second Interim Financial Report was approved and submitted last week. For the first time in years, it will be designated as “Qualified,” since the future budget year 2013-14 does not meet criteria for adequate reserves, which are 5 percent of the general fund expenditures.

“This is a very historic report,” said Vince Christakos, assistant superintendent for business services. “It’s the first time were are self-certifying as ‘Qualified,’ which means we may not be able to meet our financial obligations in the next two fiscal years.”

The district’s financial problems are not just about the ending balance on each June 30, but also its cash flow throughout the year.

Buckhout told the board that state and federal funds and reimbursements are taking longer and stretching beyond the end of the fiscal year.

This year, Hemet borrowed $23 million at the beginning of the fiscal year and repaid it in January. Last month, HUSD borrowed an additional $7 million and anticipates another short-term loan of $5 million in June.

By 2013-14, Buckhout projected that HUSD may need to borrow more than $60 million to pay its obligations throughout the year. Projected federal and state funds are estimated to be received after the end of the fiscal year and will enable the district to repay these temporary loans.

HUSD is more than half way through the current fiscal year 2011-12 and expects to have a $32.9 million surplus. But very tight assumptions about the prospects for Gov. Jerry Brown’s November tax initiative and agreements with the Hemet Teachers’ Association result in deficits for the next two years.

The possible combined two-year deficit of $38.8 million is sufficiently large to deplete the district’s reserves. The result is a $5.9 million negative balance at the end of the 2013-14 fiscal year. Consequently the future budget is considered “qualified.”

The board did adopt another early retirement plan for teaching. Eligible teachers must be 55 years old on June 30, 2012, have five years with the district and not be in a management position.