The Beverly Hills Unified School District (BHUSD) unanimously approved its first interim budget report, which outlines the district’s ability to meet its financial obligations, during its regular Dec. 12 meeting, and acknowledged the need to cut expenditures by $5 million in time for next year’s budget.
The report, available on the district’s website, “projects the district’s general fund to end with a positive fund balance [this fiscal year] while meeting the 3 percent required reserve for economic uncertainties. However, as expenses continue to increase more rapidly than expected revenue, reductions are necessary in the 2017-2018 fiscal year.”
For this fiscal year, the district’s first interim budget accounts for an increase of $228,000 in revenue compared to $1.32 million in added expenditures, relative to the adopted budget passed in June, according to a presentation to the board by La Tanya Kirk-Carter, the district’s chief administrative officer.
The added expenditures include increased costs for books and supplies, added costs of teachers with class sizes of more than 20 students, contracted services to fill the district’s current lack of a director of special education and more athletic equipment for Beverly Hills High School.
The district is on pace to end the fiscal year with a little over $600,000 in unbudgeted funds that the district can use for unexpected expenditures before it would have to resort to its reserve funds, totaling approximately $11.3 million.
“We are good financially in the current year,” Kirk-Carter said to the board. “The goal is to have a healthy current year and look out for your multiyear [projections].”
The projections indicate a $5 million cut in expenditures implemented during the 2017-2018 fiscal year, and maintained through the 2020-2021 fiscal year, will prevent the district from dipping into its reserves.
“We want to keep a healthier reserve than even what we have,” Kirk-Carter said, noting that Beverly Hills Unified, as a basic aid district, would not get immediate help from the state should a fiscal crisis arise. Basic aid districts are districts that collect local property tax revenues that are greater than general purpose funding the state would have provided.
She said overstaffing of teachers, and classes in the elementary and middle schools with exceptionally low class sizes are “areas we’ll be looking at” to make changes that could mitigate costs.
The board of education will host a public budget study session in January, and will approve its second interim report in March before it approves any recommendations to reduce expenditures in the adopted 2017-2018 budget, to be passed in June.
All “local educational agencies” in the state must submit two interim reports to their counties each year by Dec. 15 and March 17, according to the California Department of Education. BHUSD submits its report to the Los Angeles County Office of Education.
The district’s report includes a “positive certification” from the board, which states that the district can stay on pace to meet its financial obligations for the current fiscal year and the two following years.
Board of Education vice president Lisa Korbatov mentioned the possibility of exploring a restructuring of the district’s four K-8th grade schools, which is an exceptionally expensive school model, to ease long term expenses.
“We’re kicking the can down the road, and there’s no more road,” she said.
Studies, however, have suggested K-8th grade schools foster better academic development.
Board of education president Mel Spitz said it is “simply incumbent upon” the board to make the $5 million reduction in time for the passage of the 2017-2018 adopted budget.
“I hope that staff, and I hope that parents and all people in the community are interested, will stay tuned and hopefully attend our next budget session,” he continued. “The good news is we will solve this problem, and we will do it in a way that does not have too much impact on our kids’ education.”
College Readiness Block Grant
Among the changes in revenue to the district’s 2016-2017 adopted budget includes $75,000 appropriated by the state to the BHUSD in College Readiness Block Grant funds.
Through 2018, the district plans to use $6,250 for certified staff professional development in areas related to college readiness, $21,750 for college center computer lab equipment, $6,000 for college admissions fees, $8,000 for college preparation assessment fees and $33,000 for Naviance curriculum and senior plan system, an online network that helps students prepare for college.
Allotment of College Readiness funds is based on expenses for “unduplicated students,” a term used to describe poorer students. Beverly Hills had 189 unduplicated students in its high school during the 2015-2016 school year, according to the California Department of Education, which qualified Beverly Hills Unified for $75,000, the minimum a district can receive.
The Los Angeles Unified School District, by comparison, had 113,522 unduplicated high school students during the 2015-2016 year, and it received $16.9 million in College Readiness Block Grant funds.
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