The San Dieguito Union School District (SDUHSD) unanimously approved its first interim budget for the 2016-17 school year at the Dec. 8 meeting.
The first interim budget includes changes to district revenue due to a slight increase in the state’s funding and an increase in property tax estimates. Other changes to the revenue include an increase from the Tobacco Use and Prevention Education grant — the grant provides funding for three years.
The total projected revenue is $129,936,271 while the expenditures are $139,705,135, representing a deficit of $9.7 million.
“I am not happy that we’re $9.7 million in debt this year,” SDUHSD Trustee Mo Muir said.
SDUHSD Interim Superintendent Eric Dill reassured Muir that the projected deficit is not as bad as she thinks. Dill said the district has a pattern of showing deficits throughout the school year and closing the gap as the year progresses. As an example, the district had been projecting a $2.4 million deficit for the 2015-16 school year in spring of 2016, but ended with a $4 million surplus in the fall.
Delores Perley, chief financial officer, said that first interim is always the “worst case scenario.”
“The deficit generally at first interim is the largest deficit that we look at and then throughout the year we reduce budgets where we can find savings,” Perley said.
Unspent funds from the previous year carry over, Perley said, which results in an improved beginning balance in the reserves but it does increase the deficit.
SDUHSD Trustee John Salazar was confused as to how they could have a surplus, which was celebrated at the September board meeting, and yet also have a deficit.
“At the spring revision,which is the final budget before we close the books, we were projecting a $2 million deficit. When we closed the books we actually had a $4 million surplus ” Dill said. “That equals the $6.2 million that you see in additional funds that are available in the beginning balance.”
Muir said it’s frustrating that if there is a surplus it is going into reserves and not into programs such as music, as a La Costa Canyon parent requested at last month’s meeting, or toward aquatics, as a parent pool committee is in the process of preparing a feasibility study for a district pool.
“If we have a surplus why isn’t it going back to the kids?” Muir asked.
Pearly said the district has to ensure they preserve the state’s 3 percent reserve requirement in a three- year projection. The reserves are projected to be at $15.9 million, or 11.4 percent in 2016-17; 8.4 percent in 2017-18; and 4.8 percent in 2018-19.
SDUHSD Trustee Beth Hergesheimer said her expectation is that the district will continue its work in seeing where they can save funds throughout the year and ensure that they have necessary reserves — at that point the board can talk about what programs they want to pursue and spend dollars on for the following year’s budget.
Muir stated that despite the reassurances, the projected $9.7 million deficit is still a “huge number” to her.
“This is our annual pattern. It always looks worse at first interim because of that pattern of carrying over expenditures from one year to the next,” Dill said, noting every year they are able to slide the numbers downward. “There’s savings along the way and that’s going to be our work to close that deficit. It is every year.”