Pleasanton Unified School District has been busy working to create a new budget by the end of June that identifies and carves out $11 million from district spending while staying prepared to respond to significant moves by the state.
California's economy has taken a huge hit since the onset of shelter-in-place orders forced a number of businesses and organizations to reduce or cease operations entirely, causing a fiscal chain reaction throughout the state.
Governor Gavin Newsom's May budget revision projects a $41.2 billion revenue decrease and $12.8 billion increase in expenditures for fiscal years 2019-20 and 2020-21. Under Newsom's budget, Local Control Funding Formula (LCFF) would experience a 10% decrease, prompting California public school districts -- including PUSD -- to brace for state cuts.
During an update at the board's regular online meeting on Thursday, assistant superintendent of business services Ahmad Sheikholeslami said the State Legislature has been developing an alternative budget that rejects the majority of Newsom's proposals and reallocates funds to the LCFF, while using possible federal funds to minimize impacts to schools during the financial crisis caused by the COVID-19 pandemic.
State leaders are also looking at adding Assembly Bill 1835 as part of the proposal, a proposed law currently working its way through the legislature, which Sheikholeslami said "requires any supplemental and concentration grants that school districts don't use in a particular year would need to be kept with those students, and to be used in out-years, and so that could be swept into other parts of the budget."
Newsom and legislators still need to work out a number of differences before the state's final budget is adopted next month.
"We may be in a situation that there won't be greater clarity until early in July, and so that puts us into a precarious situation where we have to build our budget based on more conservative assumptions that we know for now," Sheikholeslami said.
PUSD is considering a multiyear suspension of the districtwide mariachi music program and cutting back funding to the high school career and technical education program. Library specialists at the elementary school level could also see their hours decreased by half from five hours per day.
The district has also managed to identify some opportunities to increase revenue such as requesting additional donations from the Pleasanton Partnerships in Education Foundation and using remaining gift funds from the defunct Pleasanton Schools Educational Enrichment Foundation on existing music and STEM programs.
The trustees and staff will work through those issues next week before the board's final budget vote on June 25, Sheikholeslami said, "knowing that most likely that budget will need to be revised and refined once the state budget is approved." Some of the reductions and plans in the district's budget won't be implemented until staff has greater clarity.
Trustee Joan Laursen asked why the district would "need to follow the May Revise numbers and not go with the hope and prayer the legislature is planning." Sheikholeslami replied that the Alameda County Office of Education wants school districts to prepare budgets that can handle worst-case scenarios at this time.
"If that were the situation, where we would need to make a significant level of reductions, they would conditionally approve our budget, and once those reductions were implemented and we showed them to the county, then they would give us final approval," Sheikholeslami said. "However, if reductions were not necessary and there were significant revisions to the current proposed budget by the governor, then they would go ahead and approve our budget knowing that we would not need to do those reductions."
"That's their approach right now, a prudent approach. It does put us in a precarious situation but I think we have to plan that way," he added.
Laursen then inquired whether the county would accept PUSD's plans for adjustments that have not been finalized yet, specifically those requiring negotiations with the district's collective bargaining units.
Sheikholeslami informed the board that staff had discussions with the county about trigger options "so that if certain options were not available to the district and certain options weren't advantageous to the operations of the district, that there would be other levers by which the district could exercise."
Trustee Jamie Yee asked if the district had considered offering early retirement to some employees. A recent cost analysis of the proposal indicated some savings but Sheikholeslami said, "The timing of that plan for initiating is very compressed given the situation that we were in, and we felt that it would be more strategic to use that in a second-year planning process."
Board President Steve Maher wondered about cuts across the board so that "everyone kind of suffers but then no one loses a position so that we don't lose people."
"I'm afraid that if we start cutting in certain areas, people will seek elsewhere for employment. If that does happen, we will lose people so that when we do add money back in, we won't have someone to take up that position," Maher said.
Sheikholeslami told Maher that however the board decides to make reductions, that those should be based on trigger languages built into the budget since "we would really need to have certainty on the budget that the state is going to approve."
"There may be other types of budgetary assumptions that are good business practice that we should be looking at in terms of our business operations and tightening the belt," Sheikholeslami added. "Because as we indicated previously, our structural deficit spending, we were in that mode prior to this and the fiscal challenges that lie ahead of us are not going to go away in a single year. The earlier we can start with some of those smart reductions, they will pay out better in the out-years as well."
The board is set to vote on the final budget at its June 25 regular meeting.