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School board takes first look at budget

LCUSD will function on reserve funds for next several years.

November 19, 2009|By MEGAN O’NEIL

Through a combination of fund transfers, cash reserve spending, program reductions and staff reductions the La Cañada Unified School District will remain financially solvent through the 2012-13 fiscal year, according to a preliminary budget released this week.

The district has been grappling with how to manage a year-over-year multimillion dollar reduction in funding, the result of the economic downturn and subsequent California budget crisis.

Stephen Hodgson, a financial and budgetary consultant for the district, told the Governing Board Tuesday the district will have to tap into its reserves, spending as much as $3.36 million in savings to make in through the coming years.

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Much of the budget discussion focused on funding lost on a per student basis. In 2007-08, the district received $5,795 per students from the state, Hodgson said. In 2009-10, the district will received $4,960 per student, a loss of $835. Compounding that reduction in funding is the fact that district enrollment numbers are dropping.

Expected revenue for the 2009-10 school year is $31.4 million, while expenditures are estimated at $33.4 million. Similarly, expenditures for the 2010-11, 2011-12 and 2012-13 fiscal years will exceed projected revenues by more than a million dollars each year.

“We are deficit spending year after year after year,” Hodgson said. “We are able to do that because of flexibility transfers, using our reserves, program reductions, staffing reductions, other painful things that are happening. But nonetheless, we are still deficit spending which needs to be addressed as we go.”

LCUSD will be able to submit its first interim 2009-10 financial report to the Los Angeles County Office of Education in December with a positive certification, Hodgson said. A positive certification means the district, based on its current projects, will be able to meet its financial obligations for the current fiscal year, as well as the two following years. The district traditionally provides budget estimates for three years out, one year more than required.

“My guess is there may be only a handful of districts in the county, if there are any, that can make that statement through the year 2012-13, one year beyond the statutory requirements,” Hodgson said.

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