School District Budget Could Face Challenges Ahead

The has come in about $112,000 short of its most recent projections for the 2011-12 budget, following, in part, a dip in enrollment and attendance, and state cuts in February. The future could be much bleaker.

Assistant Superintendent Laurie Harden said, at last week's school board meeting, that the district's financials, overall, are in good shape now, but that coming years could be rough, depending on what happens with a proposed November initiative to increase the state sales tax.

"Every time we do these reports, it's sort of the song and dance of, 'Here is the best-case scenario. Here's the worst-case scenario.' Whereas I think this time, it is more, 'Here's the worst-case scenario and even the best case scenario is not ideal,'" Harden told the board.

The district enrollment was 37 students lower than projected, and its average daily attendance (ADA) dropped slightly. Both factors lead to less money from the state.

said, historically, the district has had long waiting lists as students tried to transfer into the district. Now, as other districts are trying to keep students and bolster their own ADA numbers, they've allowed fewer and fewer transfers, which "slowed and shut down the interdistrict transfer process." 

"We do not have waiting lists as we had before," said Stephenson. "We're not able to fill those slots."

The district retains a healthy reserve of nearly 14 percent, but Harden said that could drop precipitously in the future if the November initiative fails.

That could result in $370 less per ADA, or $1.3 million less for the district overall.

"We've been threatened by the state before with these kinds of cuts, and they never come to fruition," she told the board. "We don't know, will it pass or fail?There's speculation on both sides."

Even if it is passes, and the district receives "flat" funding, she said, the state actually only pays out a percentage, or 78 cents on the dollar, of what it promises districts.

(As a result, since it began this practice in 2008-09, the state actually owes Albany more than $10 million that eventually it will repay, Harden said, though there's no telling when.)

Harden said the district may need to look at taking out a short-term loan, with interest, to increase cash reserves. The state, she said, has been a year late in 36 to 40 percent of its payments to districts, making it hard to function.

Other concerns she noted going forward would include pool operating costs, the 2015 expiration of Albany's Emergency Parcel Tax ($1.2 million), and possible repairs to facilities resulting from a $27,000 seismic analysis the district has undertaken.

It will be six to eight months before the district knows more concretely what the pool's operating costs will be, Harden added.

Albany's , which , is "still squeaking by," said Harden. "We're not sure if they are going to be in the black. It's difficult. We're going to have to determine how we are going to address that."

(Board member Allan Maris volunteered to investigate possible options.)

Harden said the district's Child Development Fund, which pays for the , could face state budget cuts of 15-30 percent in 2012-13. Those cuts would affect full tuition, hurting some of the city's most vulnerable.

Harden said Albany Unified will know more in May about what to expect for next year. 

"We do have our ... reserve and we can meet all our fiscal obligations," she said. "But, again, it's very tentative.... When we start looking at next year's budget and budget adoption, it may look entirely different."

The Interim Financial report and a PowerPoint prepared about it by Harden are attached to this story as PDFs.

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If there's something in this article you think , or if something else is amiss, call editor Emilie Raguso at 510-459-8325 or email her at albany@patch.com.