The Los Altos School District’s 2019-2020 budget aims to tighten spending and shore up the district’s reserves to prepare for a possible recession.
The district’s board of trustees unanimously passed the budget at a June 10 meeting.
The budget would increase reserves to 6.49%, approximately 1.2% higher than last school year.
However, school board policy calls for reserves of 8-10%. Reserves decreased from 9.26% in 2015-2016 school year to 5.3% last school year.
“We’ve been deficit spending for three years. Not a lot, but enough that it’s a concern, and we want to reverse that trend,” said Randy Kenyon, assistant superintendent for business services.
Under the plan the budget lays out, the district would build its reserves back up close to 10% in the 2021-2022 school year.
Enrollment is expected to continue to decline in the district. Next year, enrollment is projected at 4,107 students, down 135 from the 2018-2019 year. However, final numbers won’t be known until August, board president Jessica Speiser said.
The district is cutting 16 teaching positions next school year, but no one is being laid off. Instead, the reductions are being made through attrition, such as teachers moving away or retiring.
Five teachers who currently work as “instructional coaches” helping to train other teachers will go back into the classroom. Another teacher who serves as a mentor to new teachers also will move to a traditional classroom position.
The remaining 10 positions will be eliminated because of declining enrollment.
The budget projects that property-tax revenue will grow 6.5% next school year. Property taxes make up the single largest share of the district’s budget at 65% of all general fund revenue.
“We’re blessed with good property-tax revenues and blessed with a community that supports our schools,” Kenyon said.
However, the district’s overall general fund revenue is expected to decline slightly, from $65.8 million to $64.5 million next school year.
The decrease is due partially to a change in state funding. Former Gov. Jerry Brown used to give public school districts one-time discretionary money, which current Gov. Gavin Newsom isn’t continuing.
Last year, the district also received a $1.2 million grant to install electric-vehicle charging stations, which was included in last year’s revenue total.
Speiser said the district doesn’t see the revenue increases of other nearby districts because Los Altos hasn’t had the same kind of residential and commercial real estate growth.
“We do need some growth in our city or our school district will suffer, too,” Speiser said.
Teachers will receive a 2.5% salary bump next school year, under a deal recently finalized between the teachers union and the district. However, the cost of the raise wasn’t included in the budget because the document was created before salary negotiations ended.
Instead, the board plans to incorporate the salary increase in August when budget adjustments are made.
To offset the cost of the increase, the board intends also to approve the estimated $1 million in savings the district’s budget review committee recommended.
That would include using $10 million of Measure N bond money to create a sinking fund – money set aside to fund a future project – that would be used for facility upgrades and repairs. The district currently sets aside $300,000 annually for such maintenance projects.
Another $2.8 million in Measure N funds would be used to pay off debt that dates back to the purchase of portable classrooms and modernization of Gardner Bullis School in 2007. That would save the district another $330,000 annually.
The remaining $370,000 would be saved through a variety of smaller cuts.