Mount Diablo Schools Have Enough Money - For Now

The Mount Diablo Unified School District will not have to make any more budget cuts following the passage of the state budget — at least for now.

Chief Financial Officer Bryan Richards told the school board Tuesday night that the budget it passed in June will hold largely because it took Gov. Jerry Brown’s advice in May to expect no cost-of-living increase (originally estimated to be 2.24 percent) and to set aside extra reserves.

The good news is that the state did not cut $330 from the average daily attendance funds, as was forecast in the governor's May budget report. The bad news is that other cuts could be made in midyear, thanks to AB 114, a bill passed by the Legislature and signed by the governor.

According to Richards, the district faces midyear cuts — or “triggers" — of $9.63 million if statewide tax and revenue projections of $4 billion don’t flow into the state as predicted.

AB 114 mandates cuts in home-to-school transportation and allows districts to negotiate more furlough days. For the Mount Diablo district, the cuts could mean a loss of $1.3 million for bus transportation and as many as seven more furlough days for employees, for a total of 12 days cut from the school year.

In his presentation, Richards quoted two news stories from the Contra Costa Times that described the hoped-for $4 billion tax surge as “illusory at best” and “unrealistic.”

Board President Gary Eberhart expressed particular disgust with a part of AB 114 that requires school districts to approve budgets that assume that the $4 billion in projected revenues are a sure thing.

“I’ve never seen anything like it. I don’t think the community understands [the Legislature’s and the governor’s] manipulation of the budget,” he said. “Fortunately it doesn’t impact us, but frankly I’m in shock that they chose to do this and that the governor had the gall to sign this.”

The district’s budget for 2011-2012 is $295 million. A little more than $200 million comes from unrestricted general funds, which is where most cuts likely would come from if they were needed later in the school year. The remaining $95 million must be spent on specified programs and cannot be shifted to cover other costs.

In addition, for the last three years, the state has deferred paying all California school districts’ their fourth quarter revenues until the first quarter of the following fiscal year. For school and fiscal year 2011-2012, the percentage of deferred district income will go to 38.4 percent from 28.75 percent. As noted in with Richards and his boss, Superintendent Steven Lawrence, that forces the district (like most others in the state) to obtain short-term loans to cover ongoing expenses such as salaries until the state pays up.

In other fiscal news:

• The Bay Area Air Quality Management District will give the district $1.7 million to replace 10 older buses, Lawrence said.
• Trustees approved a $650,000 contract to build bleachers at Northgate High School’s new football field. The district will kick in $500,000 with the Northgate Pride Foundation expected to pick up the remaining $150,000.
• The board approved contracts with six legal firms totaling $930,000. When trustee Cheryl Hansen noted that the amount was “a big chunk of change,” General Counsel Greg Rolen agreed, but added that it was “a lot less than it used to be.” He said hiring six firms makes the barristers bid competitively and thus lowers costs.