The Sonoma Valley Unified School District last month received an eyebrow-raising letter from the Sonoma County Office of Education, SCOE, warning that the district practice of deficit spending must stop. But district officials say they are taking the SCOE concerns seriously and are confident they’ll be able to trim nearly $2 million from the district budget in the coming year.
Interviewed on Wednesday, Superintendent Charles Young says that tough decisions will be need to be made, but he is confident about the long-term health of the school district.
“Our financial situation is certainly not great at the present time,” he said. “We’ve been running a deficit for the last three consecutive school years which has reduced our reserves. That is clearly, as the SCOE letter indicated, not a sustainable condition. At some point without actions, the reserves would run out and the district would not only be in danger of insolvency, but would be insolvent. The district has been working hard to address this serious issue.”
In a Sept. 29 letter to Young and board President Dan Gustafson, following its annual review of the SVUSD budget, the county office issued a qualified approval of SVUSD’s 2017-18 budget but attached a series of required actions. Those include:
An immediate spending freeze (Oct. 1) must be implemented, with all further expenditure requests vetted by the superintendent or his proxy.
Young said that the freeze is already in place, as well as a new expenditure request process.
District staff must immediately begin a “thorough review” of the budget – as well as past and current revenue and expenditures – and present those finding in an “interim report.”
Young said that this review was underway before the letter arrived.
“Now that the district has the benefit of excellent budgetary and financial advice, we have obtained a clear understanding of our current financial condition,” said Young. “And I’ve been working on this thorough review since the day I arrived [in July].”
The district must establish a team to propose budget reductions of at least $2 million, and the board of trustees must review and approve those reductions no later than Jan. 17, 2018.
According to Young, this team includes Human Resources Manager Loyal Carlon, Associate Superintendent Karen Strong, interim Chief Business Officer Linda Grundhoffer, newly hired fulltime Business Manager Helen Miller and himself. He said that they will have identified the cuts prior to SCOE’s January deadline. He also noted that the district has identified a finalist for the position of associate superintendent of finance.
All programs must be reviewed to identify potential cost savings to the general fund, and an updated staffing plan must be devised to align with projected enrollment.
Young said that staff is compiling a list of every possible cost savings option available to the district.
“We’ll leave no stone unturned looking for savings,” he said. He pointed out, however, more than 80 percent of the district budget goes toward teacher salaries and benefits, not allowing a lot of wiggle room.
If the district fails to follow the recommended actions, it would run the risk of receiving a “negative certification” from SCOE in the district’s next interim budget report.
Young says that is not going to happen.
“We will have addressed each of the concerns raised by SCOE before their deadlines,” he said.