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Another view: Studying ways to slice costs of education

Another View
By: Gayle Garbolino-Mojica, Placer County superintendent of schools
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Editor’s note: This is the second in a two-part series. Recently the Auburn Journal called for education leaders to “step up” and lead districts experiencing this “budget mess” through the fiscal swamp. We agree that both sides of the budget ledger, revenue and expenditures, must be addressed. My first column, published Monday by the Auburn Journal, explored the complexities of school district revenues. This column focuses on reducing expenditures in response to revenue cuts. One of those efforts has been exploring the potential reduction of expenditures brought about by school district reorganization. What has PCOE done about reorganization? Whether school districts want to undertake such an enormous task for potential budget savings is a decision that has been the subject of discussion in Placer County for decades. Last year my office provided financial information and projections to four school districts that were looking at the next steps involved in reorganization. Two of these districts – Auburn Union and Placer Hills – met for the first time a few weeks ago to discuss the prospect of reorganizing the two districts. Critical to that discussion was the difference in long term debt liability between these two districts – $80 million to $25,000. Regardless of potential efficiencies or higher funding per student, if Auburn Union were to merge with Placer Hills, each Auburn Union student would bring over $38,000 of debt, not revenue, to the reorganized district. Each Placer Hills student would only bring $25 in debt. At their joint meeting, serious questions were raised about whether a merger would be a financial benefit to both districts – and although both boards continue to discuss the issue, the reasonable conclusion is there is not a financial incentive to do so. Whether a school district reorganizes, painful decisions such as increasing class size, reducing instructional days, eliminating transportation, arts, and sports are still on the table. However, both boards did agree to continue to explore additional ways that the two districts can continue to improve programs and cut costs by sharing services and personnel. The examples of Foresthill Union sharing its business manager and superintendent with Alta Dutch Flat and of Placer Hills sharing its superintendent with Colfax were discussed. Good responses by leaders in a difficult time. What has PCOE done to assist with budget reductions? Last year we completed a financial analysis of several different district reorganization scenarios that were used by districts to evaluate their options. During these difficult times, county office staff – which also has been reduced due to budget cuts – will also be pressed into doing more with fewer resources. PCOE serves district students with severe disabilities, who have been expelled, incarcerated or are on probation, and who are involved with career and technical education. As a county office of education, PCOE has been delegated oversight duties when district budgets are fiscally distressed. And that’s what we are doing now with Colfax Elementary which is working hard to respond to its “negative” budget certification. Over a year ago, my office identified revenue and expenditures deficiencies that we felt compromised Colfax’s fiscal solvency. We hired and paid for a fiscal expert to help resolve those deficiencies. But due to declining enrollment, over stated revenue projections, and unauthorized expenditures, the district’s negative ending fund balance this year and next has increased to almost a half a million dollars. This fall, we assisted Colfax with its superintendent transition and helped pay for the interim superintendent. We hired a fiscal advisor to assist Colfax this year and next, and have required the district to submit fiscal recovery plans. I am providing a fiscal practices workshop for Colfax board members that emphasize proper budget protocol and controls, and data driven decision-making. We anticipate that over the next few years, maybe even in the next few months, other districts will certify that they will be unable to pay their bills and keep a legally sufficient reserve. Some issues may involve cash flow where a temporary loan from the county treasury may be obtained. But other difficulties may result in changing the way districts have been doing business for decades. Some issues may require a disturbing level of intervention by PCOE or the state. But whatever must be done will be done with public input. Unless state tax revenues soar, or the means by which education is funded changes, leaders will continue to be challenged to find a way out of this “budget mess” and I am confident that we will. Gayle Garbolino-Mojica is the Placer County superintendent of schools