School district approves 2020-21 budget that maintains $6.8 million reserve

By Roni Java

Special to Plumas News

Trustees for the Plumas Unified School District’s (PUSD) Governing Board voted 4-0 on June 24 to approve a balanced 2020-21 school operations budget with $28.9 million in revenues and $29.3 million in expenditures.

Board President Leslie Edlund and Trustees Dwight Pierson, Dave Keller and Traci Holt, clerk of the board, adopted the budget at their virtual school board meeting held by Zoom teleconference. Trustee Joleen Cline abstained.

The budget decision accounts for a planned deficit of $420,404 that will be covered by internal transfers from other district funds and actually results in a small budgeted surplus of $153,597 for the 2020-21 fiscal year. The deficit would only happen if those internal transfers from other funds were not to occur, PUSD administrators explained.

Overall, this leaves PUSD with a healthy 23 percent reserve fund balance of more than $6.8 million for the fiscal year.

District administrators advised trustees all funds were anticipated to have a positive ending balance as of June 30.

PUSD will also continue the Community Eligibility Program in food service for the coming school year. The service allows all students to eat breakfast and lunch at no charge to families.

Out-year projections positive

PUSD’s budget summary report states the district has been prudent in setting aside one-time funding when available. They have done this to build a reserve sufficient to withstand the volatility of basic aid funding, recession and unexpected facility repairs. In addition, several measures have been implemented to identify and address reductions in ongoing expenditures.

As a result, out-year budget estimates are projected to keep the district’s reserve funds at 18 percent through 2022 and 10 percent through 2023.

PCOE/PUSD Deputy Superintendent for Business Services Lisa Cavin clarified the school district has a policy to maintain 17 percent in fund reserves, which she said equates to roughly two months of operating cash.

Further reductions in coming years

In the changing financial scene for school funding that is particularly fluid this year, Cavin provided the school board with up-to-the-minute status information for the trustees’ meeting.

She told the board the district’s numbers included revisions based on the budget deal reached between the California State Legislature and Governor Gavin Newsom’s office. She said there would still be updates over the summer with trailer language, “but the outlook is much better, especially for the 2020-21 fiscal year.”

Cavin also explained the importance of reductions that have already been made, in combination with flat funding for the district and a “larger-than-anticipated amount for (federal) CARES Act funding.”

“This provides us with what currently appears to be a small surplus for 2020-21,” Cavin wrote in a briefing for the trustees. “Further reductions will still be necessary in the subsequent years, but we are no longer anticipating a qualified certification (a process attesting to PUSD’s ability to fund its obligations).”

Focusing on best options

The PUSD budget was developed under dynamic funding assumptions and estimates due to state budget negotiations and the impact of this year’s COVID-19 pandemic.

However, district officials emphasized they have focused on balancing a need to protect financial reserves while providing “the best educational options possible with limited resources.”

The district anticipates student enrollment will remain flat or increase slightly. Average Daily Attendance (ADA) is estimated to be 1,700 for the coming school year and the district receives funding for its general operations from various sources.

PUSD’s General Fund is used for the majority of the functions within the district. The largest part of the expenditures is for salaries and benefits that comprise approximately 79 percent of the total projected General Fund budget.

County Office of Education

On the County Office of Education (PCOE) side, 61 percent of the budget goes for salaries and benefits and the remaining 39 percent covers books, supplies and other services and operations.

For example, PCOE supports Honor Band, outdoor education, school gardens, Internet services, adult education, Plumas Arts and artists in schools, services for foster and homeless youth, career technical education, tobacco use prevention, the child development program, Opportunity classes and much more.

The approved 2020-21 PCOE budget projects revenues of more than $3.22 million and expenditures just over $3.79 million. This results in a planned operating deficit of $411,220 due to budgeted Secure Rural Schools funding, according to Cavin.

The planned operating deficit is to be funded by Forest Reserve Funds and Special Reserve Funds.

The county office reports its 2019-20 reserve and all of its currently projected years (through 2023) are expected to remain at acceptable levels.

PCOE’s minimum fund balance reserves are required to remain at 10 percent or more based on a resolution previously adopted by the governing board of trustees.

The budget report also stated, “Over the coming years, reductions will be necessary for the county (office of education) to remain fiscally stable.”

 

 

 

 

 

 

 

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