June 17, 2008 — With no comments or expressed concerns during a public hearing, the Lassen Union High School District Board of Trustees approved a preliminary 2008-2009 school budget during its regular Tuesday, June 10 meeting. School districts are required to pass budgets by June 30, even if the state budget has not been passed. In developing a school budget, LUHSD Chief Business Officer Debbie Fry worked with Governor Arnold Schwarzenegger’s May revised state budget.

For the 2008-2009 school year the high school district shows deficit spending — spending more money than what it receives — of approximately $9.7 million.

After legally restricted and designated funds are removed, the ending general fund balance is $458,718.82.

Estimated expenditures including restricted and designated funding is $10,173,866.79.

Fry said she expects continued deficit spending while transitioning to a stable budget. She said the district has been reducing costs for four years in anticipation of declining enrollment. Schools receive at least 70 percent of their funding based on average daily attendance.

Fry said based on information from the October 2007 California Basic Educational Data System, there will continue to be a slight decline in enrollment, although not at the same level as last year.

The district’s funding will be based on the 2007-2008 ADA during the second half of the school year, or principal 2. .

Fry said this year, the district was down 82 ADA at P-2 from last year, so the net effect is a reduction of more than $500,000 in revenue.

The district monitors what is going on with the feeder schools, which are elementary schools whose students will attend Lassen High School, in hopes of being prepared when declines are sharp.

One way the district has been preparing for the effects of declining enrollment is by reorganizing departments and downsizing staff meaning if a staff member were to leave and a position becomes available, the job would be assigned to another employee or combined with another job, rather than hiring another person.

Last year, as another way to cut costs, all unnecessary travel, including conferences for teachers and staff, were eliminated or reduced as well as equipment costing more than $5,000, including air conditioning, heating and diagnostic equipment. “Fortunately,” Fry said “We are currently solvent enough to weather this for this year. In the future, there will be more difficult decisions to be made.”

She said as the ending fund balance declines there is no mechanism for restoring funds. The funds are critical and in order to make payroll each month, the funds have to be available.

Fry said the state has deferred June payments to July and is proposing to defer July payments to September.

However, Fry said it is a terrible proposal because schools need funding to pay salaries, purchase supplies and keep the lights on when school starts.

Additionally, Fry said there is a proposal to defer all categorical payments to May, leaving cash- flow problems for most school districts for the first nine months of a school year. Categorical funding make up 30 percent of the district’s budget and there is a possibility the proposal will pass.

Fry said this is a wait-and-see year. With this being an election year, those in education are hoping to see a turnaround in some of the proposals.

As expected, Fry said Forest Reserve money, given to rural schools to offset the loss of revenue due to the restriction of the development of national forests, and Medi-Cal Administrative Activities funding were cut from this year’s budget because it is unknown if those programs will be refunded again.

The MAA program allows school districts and county offices of education to be reimbursed with federal dollars for costs incurred when performing certain administrative activities, such as referrals of students and their family members to medical services.

Fry said the reauthorization of Forest Reserve and MAA money will probably be an issue that continues through the summer.

The one-year extension of forest reserve funding prevented deficit spending in 2007-2008.

Since the state budget has not passed when school districts approve their budgets, Fry has to consider all the districts’ costs at the current levels, increases in staff costs due to step and column movements, and any reductions made through attrition to come up with personnel costs.

Fry said the more difficult costs to estimate are those constantly changing, such as supplies, food, fuel and utility costs.

“The cost of fuel is a huge worry, not only for transportation but heating fuel costs as well. We have to try and to stay within limits and conserve more as the costs continue to rise,” Fry said.

At the end of June, Fry said she hopes to have more information on the pending state budget and will post it on the district’s Web site, lassenhigh.org. The budget area of the Web site is set to become available after Tuesday, July 1.