District projects multi-year budget gap, enrollment decline and pension pressures; staff outlines timeline

Marilyn Edenton, the district's business official, presented an overview of the San Ysidro School District's current budget assumptions and multi-year projection at the board meeting.

Lede: The district projects deficit spending in its multi-year financial forecast driven by lower enrollment, rising pension costs and insufficient state cost-of-living adjustments, staff said.

Nut graf: At first interim the district estimated $92.7 million in total revenue, with Local Control Funding Formula (LCFF) revenue accounting for roughly 70 percent of the general fund; staff said general fund expenditures were estimated at $87.0 million and that salaries and benefits make up about 72 percent of the general fund. Edenton told the board the district built a 2.43 percent COLA for the next fiscal year in its projection, but she said many districts believe 4 percent is closer to what is needed to cover salary-step and column increases.

Supporting details

- Enrollment and revenue: Edenton said current enrollment is 4,144 students, a decline of 61 students for the year, and a seven-year decline of about 589 students (she noted a seven-year revenue loss estimate of about $6.4 million). The current-year enrollment change equates to a roughly $700,000 to $900,000 LCFF revenue reduction versus prior projection.

- Pensions and benefits: Employer rates for STRS and PERS are rising; the district included employer STRS at 19.1 percent and expects PERS employer rates to continue increasing. Edenton said pension and health/welfare increases contributed roughly $300,000 in near-term pressure and a cumulative $7.2 million increase since 2013-14.

- Special education and federal funding: The district estimated special-education costs at about $13 million, with a general-fund contribution of $6 million to $7 million annually and roughly $1 million of projected annual special-education cost growth. Edenton listed several federal funding streams that could be at risk (Title I, Title II, Title III, Title IV, federal special-education allocations and National School Lunch Program funding) and gave rough annual amounts the district currently receives or could lose (for example, roughly $2.6 million for the National School Lunch Program and $1.1 million for the federal portion of special education). She said the district had fully spent one-time federal stimulus funds and learning recovery block grants that had been supporting staffing.

- Prior-year liabilities: Edenton summarized several inherited liabilities the district has resolved, including repayment of prior overstatements and completed debt service on several loans using Measure T proceeds.

Board questions and next steps

Board members asked for enrollment-comparison data with neighboring districts and for more detail on transfer-in/transfer-out counts; staff said those comparisons could be provided. The district's proposed budget and Local Control Accountability Plan (LCAP) schedule remains on the usual cycle: second interim on March 13, public hearings in June, adoption in June and submission to county in July.

Ending

Edenton said staff will return with second-interim updates and more comparative enrollment data; the board will consider required layoff notices and budget resolutions in the March and subsequent meetings.