The Yosemite Unified School District has recently shown it can pay its bills for the current year (2013-2014) and for the next two fiscal years while maintaining the state recommended minimum 3% reserve.
A three-pronged approach has been used to bring the district to its current 'positive' certification according to district Chief Business Officer and Assistant Superintendent Jim Monreal.
The three-prong approach includes, one: Every expense is scrutinized and prioritized; two: Staff has been restructured reflecting the need for less staff as student populations have dwindled; and three: long term debt has been refinanced with interest only payments being made for the next four years.
The previous 'qualified' certifications (beginning with the second interim financial report for 2011-2012 through the first interim report for 2013-2014) meant the district might not have been able to meet current and two subsequent years' budgets, along with carrying a 3% reserve, explained Monreal who has been at the helm of the YUSD business office since December, 2012. Student enrollment in the district has followed a downward spiral over the past five years. Enrollment in 2008-2009 was 2,364; in 2009-2010, 2,112 students were enrolled, a drop of 252 students.
In 2010-2011, 1,961 students were enrolled, a drop of 151 students from the previous year. In 2011-2012, 1,885 students were enrolled, a drop of 76 students; in 2012-2013 enrollment was 1,769 with a loss of another 116 students. In 2013-2014, there were 1,741 students enrolled, showing a loss of another 28 students.
"Revenue is tied to students in seats," said Monreal. "The state gives schools a specific dollar amount for each student in attendance so even though 1,741 students were enrolled in 2013-2014, the Average Daily Attendance (ADA) rate is currently at 1,637 and it is this rate which determines YUSD's revenue from the state."
For the first time in 40 years, the state has rewritten the calculation of revenue generation.
It is now compiled under the Local Control Funding Formula (LCFF). There are still questions about the budget impact the change to the new Local Control Funding Formula (LCFF) will have.
This funding formula determines the state's distribution of resources to schools based on a base grant per unit of ADA with additional concentration grants and supplemental funds allocated based on the proportion of English language learner and free and reduced-price meal eligible students, according to Governor Brown's 2013-14 budget summary.
In addition, to the decline in enrollment and the resulting decline in ADA, the district has been deficit spending, dipping into its reserves.
The YUSD board has charged the district to reduce deficit spending in the district. Over the last five years this deficit spending had gone from $381,962 in 2010-11, to $828,005 in 2011-12, to $996,425 in 2012-13 and is projected to be $243,741 in 2013-14.
Also adding to not only YUSD's budget woes but to those of districts up and down the state is the state's deferred payment of funds to schools.
This caused districts including YUSD to have to borrow funds to meet current obligations and to have to pay interest on those borrowed funds. "If the state continues to give us back (deferred funds) and to fund us, we may be able to meet the board's goal of eliminating deficit spending," Monreal said.
"We continue to review everything," Monreal said, "while maintaining our priority on services to students." This goes along with his own personal mantra learned early in his career. "We can do anything. We just can't do everything."
"Both bargaining units have worked with us to offer early retirement incentives," Monreal said. These were first offered in the 2012-13 school year when four certificated and eight classified employees opted for those incentives. This resulted in about $400,000 in savings to the district as not all of these positions had to be filled because of the shrinking student enrollment numbers.
Refinancing long term debt with interest only payments for the next four years means reducing those payments from $537,000 per year to $135,000 a year. But it also means an extension of those payments.
Previously, the debt was to be retired in 2022. Now it will be extended to 2027. About $3,026,000 was refinanced.
Payments on that debt will climb to $229,000 in 2017-2018, $391,000 in 2018-19, $463,000 in 2019-20 and then in small increments to $511,500 in 2026-27.
Planning for the future involves multiple challenges for the district. At this point, projected enrollment figures are not anticipated to increase, current legislation will return the number of student days to 180 from the current 175, and the impact of the Affordable Care Act is still unknown as it is in constant flux with definitions of accessibility and affordability.
While the state has provided $200 per student to schools to assist with the implementation of Common Core State Standards (CCSS), that only provides about a third of the projected costs for this transition, according to Monreal. YUSD has received $353,000 in one-time monies.
These funds have been used for professional development, instructional materials, and especially to upgrade technology in classrooms.
Testing for CCSS must be done on a computer or tablet so "we are biting off small chunks," Monreal explained. The schools' internet speed and band width have been increased this past year as the result of YUSD partnering with the Madera County Office of Education.
District considers selling property
Other efforts to increase cash flow for the district include the posting of two properties for sale.
These properties are the currently vacant Yosemite Falls School site on Highway 41 in Coarsegold and about 25 acres across the road from Coarsegold School on Road 415. Each is listed with a minimum bid of $150,000.
At the May 12 board meeting, no written bids were received prior to the meeting and just one bid was submitted at the meeting. That bid was below the minimum bid resulting in no sale of either property.
The district is currently reviewing developers' fees. Every other year, school districts must do an analysis of fees to validate changing that rate. YUSD contracts this analysis and includes Bass Lake and Raymond-Knowles School Districts.
Currently, the commercial rate fees are 47 cents per square foot and $2.97 per square foot for residential development. The new state approved rates are 54 cents for commercial development and $3.36 for residential properties.
Other dollar saving strategies being explored by the district: looking at and reviewing options of shared services with partner districts or the Madera County Office of Education. These include, but are not limited to technology, staff support, and short and long -term equipment needs.
"We have made tremendous progress to reduce expenses, maximize revenue, and to offer as many programs and services as we can," Monreal said.