The Shoreline Unified School District will be insolvent within three years unless it can drastically cut expenses, according to early drafts of the budget.
Next year’s costs will outpace revenue by $1.2 million, or 10.5 percent of total funds, gradually emptying millions of dollars saved up in reserves by the end of the 2016-17 school year. If the multiyear projections remain in the red when trustees approve a budget later this month, the Marin County Office of Education will likely give a conditional approval, requiring the school board to submit a revised budget by early September.
To proactively address the problem, the board convened an ad hoc budget committee that will meet bi-weekly to review line items and brainstorm possible budget solutions.
“[Based on] our multiyear projection, for the first time in 15 years we will not have a positive certification three years out, and that’s serious. This has never happened in this district in the last 15 years,” Superintendent Tom Stubbs announced at the May board meeting at Tomales High School. “The county office will require us to develop what they’re calling a course correction plan and it needs to be done immediately.”
Shoreline’s fiscal outlook has long appeared bleak, worsened in recent years by declining enrollment in an already small district—a drop of 41 students, or 7.5 percent, this year—while staffing has increased to accommodate desired programs and legal mandates. A rising number of special needs students, for example, will require the district to hire a special education teacher and part-time aide at West Marin School. A counselor and a part-time Spanish teacher at the high school are also planned hires.
Add to that financial burden one more constraint: the creation of the Point Reyes National Seashore removed tracts of valuable land from property tax rolls, for which the district has been erratically compensated. At the vagaries of Congress, the district’s federal aid has been hugely inconsistent. Payments were withheld for years and suddenly repaid without notice, ranging from as low as $870,000 in 2007-08 to $2.4 million in 2011-12.
In 2010, those financial vicissitudes resulted in pink slips being issued to seven teachers, including current Inverness kindergarten teacher Melissa Riley and West Marin fourth grade teacher Anne Halley-Harper, but an influx of unexpected federal aid allowed all the teachers to return for another year.
“We are not out of the financial high water by any stretch of the imagination. Luck’s been on our side and somehow we keep riding a very lucky wave,” Stephen Rosenthal, the former district superintendent, said at the time. “As long as the board fully understands this can only be for one year, I can support it.”
After a huge, final windfall of $3.9 million last school year, the federal government had caught up on its payments and planned to provide a flat $1.7 million until there is a change in law or regulation.
“Last year, we had a big infusion of federal impact aid money, and that’s kind of how the district has been receiving its funding,” Mr. Stubbs announced at the May board meeting. “Going forward, beginning this year, that amount is going to stabilize.”
This year’s “lucky wave” doesn’t seem to be coming, and costs keep piling up. As the State Teachers Retirement System’s unfunded liabilities have surpassed $71 billion, the governor’s May budget revisions proposed a last-minute increase in school districts’ burdens for pensions: Shoreline’s share could gradually climb from 8.25 percent to 19.1 percent by 2021, a $430,000 increase over three years if approved by the legislature. Expenses for workers’ compensation insurance will also jump $60,000 annually due to a growing number of claims.
“I don’t think I would characterize it as crisis mode. I think it’s created a situation that we may have to do things quicker than we thought, but I don’t consider it a crisis at this point,” said Susan Skipp, the district’s chief business official. “We’re working with the County Office of Education, so that we’re not just taken by surprise in June or July. We have to start working now and start coming up with a plan now.”
At the board meeting, trustee Jim Lino called for an ad hoc budget committee that will expand the “size and breadth” beyond the finance committee to include all stakeholders.
“We’re looking at having to reduce expenses, and that can be painful,” he said.
Anyone who would like to join the ad hoc budget committee can email Ms. Skipp at firstname.lastname@example.org for more information. The committee plans to meet on Mondays from 4 to 5:30 p.m. on June 16 at West Marin School, on June 30 at Tomales High School, on July 7 at West Marin School and on July 14 at Tomales Elementary School.