Schools

School budget ‘cautiously positive’ despite challenges

The Bonar Street headquarters of the Berkeley Unified School District. Photo: Kaia Diringer
The Bonar Street headquarters of the Berkeley Unified School District. Photo: Kaia Diringer

“Prudent budgeting” has allowed Berkeley’s school district finances to weather obstacles such as rising employee health care costs and insufficient revenue from the state, officials said earlier this week.

“We have heard about the pain in other school districts from furlough days, significant layoffs, increasing class sizes and school closures — but not in Berkeley,” said Berkeley Unified School District Co-Superintendent Javetta Cleveland in a prepared statement.  “We managed the State’s budget uncertainty, kept cuts away from the classroom, and prevented layoffs.”

The Berkeley School Board will receive an updated report on the 2012-13 budget Wednesday night.

The district’s budget is projected to be “relatively balanced with moderate deficit spending” over the next three years, with a reserve that’s $8 million above the state’s requisite 3% of $3.6 million, according to a statement released earlier this week by district spokesman Mark Coplan.


The projected revenues for the 2012-13 General Fund revenues total $115.4 million. Source: 2012-13 Second Interim budget report
The projected revenues for the 2012-13 General Fund total $115.4 million. Projected expenditures total $119.9 million. Source: 2012-13 Second Interim budget report

But Coplan also said the district continues to face financial challenges: Constricted spending from the state over the past four years has failed to keep up with local operating costs and salary adjustments. The federal sequester is set to divert $300,000 out of local coffers. The governor has proposed a new way to fund school districts, which could have an unknown effect on Berkeley schools. (The net effect is projected to be positive, but the proposal has not yet been passed by the state legislature.) And other revenue sources, such as $4 million the district receives annually for desegregation, may not be around forever.

Rising health care costs have posed their own difficulties for the district and its employees, continued Coplan. Nearly 80% (or $93.5 million) of the district’s General Fund revenues go toward employee salaries and benefits. That includes $9.5 million spent annually on employee health care costs. The amount the district spends on these costs was capped several years ago during contract negotiations, leaving employees — who haven’t seen annual raises other than what’s pre-determined by the union contract — to bridge the gap on their own. Coplan said, this year, the district gave teachers and staff a 1% bonus, of more than $820,000, to help offset these costs.

(Labor negotiations between the district and represented employee groups are currently underway.)

Despite these challenges, the district credits several factors with helping to avoid more serious financial consequences: cutbacks in the central office, food service, adult education, summer school, and instructional materials; strategies for improving student attendance to increase state revenue; Berkeley Schools Excellence Program parcel tax revenues; and a one-time $9.8 million bump from federal stimulus funds.

The district says its enrollment has increased slightly over the years, resulting in a bump in state revenue. Source: 2012-13 Second Interim budget report
The district says its enrollment has increased slightly over the years. Source: 2012-13 Second Interim budget report

According to the budget report itself, the district spent $700,000 less than it had set aside for mental health services, and $300,000 less than it had allocated for preschool programs, in addition to other savings.


“Overall, the future picture is positive – but the effects of years of inadequate funding and significant uncertainty remain,” said Coplan.

The Berkeley School Board is set to meet Wednesday at 7:30 p.m. in the City Council chambers at 2134 Martin Luther King Jr. Way.

Related:
Berkeley teachers’ bonus plan rebuffed by district [03.07.13]
School board launches new superintendent search [02.13.13]
Fight relaunched to save school nutrition programs [11.19.12]
Berkeley schools show gains on standard tests [10.12.12]

Berkeleyside publishes many articles every day. To see all our stories in chronological order, and read ones you may have missed, check out our All the News grid.