The Hemet Unified School District (HUSD) budget for FY 2019/20 was approved on June 16 and is projected to run the district $8.8 million into the red. The $303.7-million budget is an $18-million increase from last year’s $285.7 million budget.
The largest increase, $9.2 million, is for the Local Control Accountability Plan (LCAP) and another $6.5 million is for staff salaries and benefits.
The California Department of Education explains that the LCAP is a three-year plan that describes the goals, actions, services, and expenditures to support positive student outcomes that address state and local priorities.
Total salaries and benefit costs will be about $238 million, 78% of the total HUSD expenses.
“It’s hard to say whether salaries will continue at the current rate because it depends on the outcome of negotiations with each bargaining unit and the amount of money allocated to education each year by the state of California,” said Area 1 HUSD Board Member Vic Scavarda wrote in an email to the Town Crier. “Negotiations are on hiatus for the summer, so we will know more in August.”
Revenues for FY 2019/20 are expected to total $294.9 million, resulting in HUSD needing $8.8 million from reserves to balance the projected budget.
By next June, reserves should be at $22.3 million. Reserves are estimated to continue to decline over the next two fiscal years.
The FY 2017/18 budget produced a $7-million deficit, but the unaudited FY 2018/19 budget may result in a $3.5 million positive balance for the district.
“Obviously the district cannot spend at deficit indefinitely, and this is a topic of intense discussion at board meetings,” Scavarda noted.
HUSD Superintendent Dr. Christi Barrett was asked for comments regarding the district’s financial situation. Barrett did not respond to the request by press time.
During his budget presentation, Deputy Superintendent for Business Services Darrin Watters indicated that HUSD’s enrollment is estimated to increase from 21,347 students to 21,454 during 2019-20. Enrollment has increased for the last five consecutive years, since 2014-15. However, it will still be less than the 2010-11 enrollment level of 21,812.
With state funding this year, HUSD’s contribution to the state teachers’ retirement fund will decrease from 17.1% to 16.7%. However, the rate increase for CalPERS staff will increase 2.7%.
State funding, a significant portion of any school district’s budget, will stabilize for HUSD. “The gap funding that we have received from the state ends this year as Sacramento now considers the schools ‘fully funded’,” Scavarda stated. “This means that funding levels are now back to what they were in 2007, not 2019. So we cannot expect as much ‘one-time money’ as we have had in recent years.”
One procedurally change in the district’s budget process is removing the cost of custodial supplies from the school allocations. Central administration will be responsible for these expenditures next year.
Elementary school allocations will be $62 per average daily attendance (ADA) and middle schools will receive $96 per ADA. Idyllwild School will be allocated $80,600 for next year.
The HUSD budget presentation indicated that the 2019-20 capital improvement program would total about $700,000 The primary investment will be technology upgrades, servers for data and assessment analysis, vehicles, and grounds and custodial equipment.
Watters concluded his budget report with the following caution, “Overall the financial outlook for California schools appears optimistic. With full implementation of the Local Control Funding Formula reached in 2018-19, the large revenue spikes HUSD has seen in previous years has peaked, and going forward absent any changes to revenue funding at the state level, only minor growth due to enrollment and cost of living adjustment factors will be experienced. As a result, the district will need to monitor expenditures to ensure it does not create an unsustainable structural deficit.”