NEWMAN - A shift in enrollment trends, increasing operational expenses and the potential of an economic slowdown on the horizon have Newman-Crows Landing school officials taking a close look at their spending.
Superintendent Randy Fillpot issued a cautionary note to the school board at its Nov. 18 meeting, telling trustees that those factors are raising enough concern that the district is already looking at ways of tightening its budget belt going forward.
The picture came more clearly into focus at Monday night’s board meeting when Caralyn Mendoza, the district’s chief business official, presented an interim budget review to trustees.
Mendoza said the budget projection for the current fiscal year reflects deficit spending of $1.2 million. The district can absorb that setback and maintain a healthy reserve of 13 percent of its operating budget, she noted, but if no changes are made the district will incur a deficit of $1.3 million next year and $1 million the following year.
That scenario would drop the budget reserves below the 8 percent minimum established by the school board.
Fillpot said he will recommend cuts of at least $1.3 million from next year’s budget.
The district, he told Mattos Newspapers following the November meeting, will be pro-active in managing its budget in an effort to avoid a full-blown crisis.
“We are just trying to make sure that we don’t get into a situation where we have to do massive layoffs and furloughs,” Fillpot commented. “If we can peel back some (expenses) now, we are much better off in the long run.”
As an initial step, Fillpot said, he has asked staff at each site to identify cuts to collectively shave nearly a quarter-million dollars in spending from the coming year budget.
“We’re not talking people, we are talking programs and things that we have paid for in the past that may not be fully utilized any more.” he explained in November.
Each site has been asked to identify cuts in an amount proportionate to its percentage of the district’s overall average daily attendance.
That is only a preliminary step, he acknowledged, and will not bridge the budget gap.
“We are looking at larger cuts. Some of it may be through attrition, as we have done before,” he commented. “We are looking at programs as well.”
The district will see some salary savings as veteran teachers retire and are replaced by younger educators, the superintendent noted.
“We do have some retiring teachers,” Fillpot said.
Changing enrollment trends are one key factor in the budget outlook, Fillpot said, as the steady increases of recent years have leveled off and in fact decreased by a small number of students.
“At the beginning of the year we saw the growth similar to what we have seen over the last four years. In the last four years it has continued to grow through the first semester. We always gained some students. This year that has not been the case,” the superintendent explained in November. “We grew a little in the beginning but it has dropped now.”
In her report Monday, Mendoza put the October enrollment at 3,207 students, down from 3,224 at the same time last year.
The residential developments in Newman and Diablo Grande which have generated enrollment growth are nearly built out, Fillpot previously noted, and no new projects are on the immediate horizon.
Further complicating the budget outlook, pension costs for employees continue to outpace school funding increases and the possibility of an economic downturn is an ongoing concern.
“We are a little fearful that without there being new building that the numbers will flatten out and could go down,” Fillpot remarked. “If the recession hits and jobs get dispersed out to various locations, it would affect us.”