Santa Rosa schools dipping into reserve
Board divided on whether to take advantage of lowered state fiscal requirements
Published: Saturday, October 31, 2009 at 3:00 a.m.
Last Modified: Saturday, October 31, 2009 at 10:22 p.m.
The Santa Rosa School Board, facing multi-million dollar cuts, is divided on whether to take advantage of the temporary loosening of state regulation on how much money districts must hold in reserve.
Trustee Bill Carle last week urged board members to consider taking the district's funds below the previously mandated 3 percent to reduce the $5.6 million the board is faced with cutting from the 2010-11 school year. The district estimates it must cut another $4.7 million from the 2011-12 school year.
“People say it's for a rainy day,” Carle said. “My suggestion is that it is pouring right now so why is it that we are not using a reserve?”
Three percent of the budget represents more than $4 million, said Kim Agrella, executive director of fiscal services for the district. If the district dropped its reserves to 1 percent, it could still maintain a $1.4 million cushion, she said.
Meanwhile, the board is considering shortening the school year, closing schools, increasing class sizes, eliminating credentialed librarians from school sites and cutting athletic spending among other reductions to solve the deficit.
Still, the price of tapping heavily into the reserve is too steep, said some board members.
“I'm not willing to go below three because all I see is a one-year consolation which then has to be recovered the following year,” trustee Wally Lowry said.
Teachers' union officials have aired concerns that the money the district has socked away exceeds the new state requirement and if kept in reserve could mean programs and teacher positions would have to be eliminated unnecessarily.
The level the district has held in reserve has changed dramatically in years past.
In 1998-99, it dropped to 1.28 percent but spiked to more than 8 percent in 2007-08.
The board pulled extensively from its reserve last spring when the prospects of cuts began mounting. The district OK'd taking $2.5 million from its $11 million general fund reserve at the time, in addition to approving cuts totalling $8.5 million over two years.
“We do not recommend that any district go less than the original reserve requirements,” said Denise Calvert, assistant county superintendent of schools.
“In Santa Rosa's case, because they are so large, it's a more significant issue, but the administration in Santa Rosa is excellent, they have done a really good job over the years,” she said.
The state lifted its requirement that districts with 1,000 to 30,000 students must maintain 3 percent of their budget in reserve or face increasing county and state financial oversight.
Money taken from reserves must be replaced within two years and there is no sign that the state's financial climate will suddenly provide more funding for schools to make that happen without further cuts, Associate Superintendent Doug Bower said.
“I'm not going to question board members' rationale here. The reserve is there to help you get through times like this. My only point is we have to use it judiciously if we use it because we may need it next year,” he said.
And then some, he added.
“All it means is you are just putting off more cuts in a year or two, in fact you are just exacerbating them,” he said.
But board member Larry Haenel said last week that the district's dire financial straights merit considering going below the 3 percent threshold.
On Friday, trustee Tad Wakefield said his level of comfort depends on what specific program any reserve money might save. Still, he said he is loath to go even to a 2 percent reserve level.
“I would need an awful lot of persuasion to even seriously consider going under the three percent reserve,” he said.
While pressing the discussion, Carle said he wanted the board to be armed with information on what penalties the district faces if it can't climb back to a 3 percent reserve by the 2011-12 deadline.
Carle questioned the rationale of having a reserve but never using it:
“So what is this reserve for if quite literally you have to always have it but never use it. It doesn't make sense.
“There is a point at which you have to make a judgment that we have certain programs, certain staff and certain activities that we think are important to hang onto so we are going to do that for this year,” he said.
Staff writer Kerry Benefield writes an education blog at extracredit.blogs.pressdemocrat.com. She can be reached at 526-8671 or kerry.benefield@pressdemocrat.com.
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