Davis school board reviews budget challenges

Jeff Hudson | Enterprise staff writer

The good news: The Davis school district’s financial picture is about $2 million better than expected.

The bad news: Most of that fund balance is in the form of state and federal IOUs. It’s “Monopoly money,” according to Associate Superintendent Bruce Colby, the district’s chief business officer.

The Board of Education spent much of Thursday night’s meeting examining several challenging budget situations that the district may face during the coming year.
The fund balance results from “favorable updates in final funding allocations, final billing for a special education and mental health (funding shift by the state), and purposeful (local) underspending” within the district, Colby said.

But he added, “While the ending balance appears healthy, it is not. The increasing delays in state and federal payments (to the Davis district) have diminished our available cash reserves. There are no available cash reserves to spend down the fund balance.”

In other words, Colby said, “the (state-issued and federal-issued) IOUs are actually larger than the district’s total fund balance. If you were a corporation or a business, that would mean you are in big trouble … On paper, it looks like we have all this fund balance. But you can’t write a check” to cover payroll for teachers and other district employees based on that fund balance, “because it’s accounting dollars, not cash,” Colby said.

He termed the state and federal deferred payments (or IOUs) as “Monopoly money.”
Colby added that despite several reductions in budget and staffing, Davis is still “deficit spending in the million-dollar range” annually because revenue cuts have been even larger. Colby also advised the board that “the biggest part of our budget is teacher payroll, and you have to make decisions (about staffing for 2012-13) by March 15, 2012.”

The school board also reviewed the staffing cuts that the district would have to consider if a school parcel tax vote fails in a mail-only election March 6. Measures Q and W currently generate $6.5 million in funding annually. They expire in June.
Measures Q and W fund the equivalent of 78 full-time positions — 51 teachers, counselors, librarians and other certificated employees plus 27 classified employees (school secretaries, support staff and others). Also included are stipends for 91 coaches and 22 other part-time positions.

If they are not renewed, class size would go up in local elementary schools, reading and math specialists would be de-funded, and several positions for nurses, psychologists, counselors, music teachers and science teachers likely would disappear.

In addition, Colby warned that Davis faces a possible $2 million hurdle in December if “trigger cuts” kick in because state revenues come in lower than predicted under assumptions that were part of the state budget approved in June.

This article originally appeared in the Davis Enterprise on October 7, 2011. The complete story is available to subscribers at http://www.davisenterprise.com.