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Board of Education adopts new budgeting system

By JAMES R. RIFFEL

City News Service

The San Diego Unified School District Board of Education Wednesday night approved a move closer to a zero-based budgeting system in an attempt to combat crippling deficits.

Trustees who attended a budget workshop voted 3-0 to allow financial staff to develop a “priority-based” system that could be implemented in time for the 2010-11 school year.

Under such a system, the school board will need to determine its top three or four priorities next month, and have staff add up the expenses necessary to fund those choices, said Phil Stover, who is part of the district’s financial staff.

It’s not quite a zero-based budgeting system because some expenses are required, either by federal and state mandates or the basic functions of a school district, Stover said.

“You can’t get away from certain expenses” like maintenance, utilities

and food services, he said.

At a workshop last month, the zero-based budgeting model was clearly favored by board members. The district, like many government agencies, uses a baseline system with funds added or subtracted from one fiscal year to the next.

The change is being prompted by what is believed will be a third consecutive year of massive cuts to district programs because of reduced funding.

According to James Masias, the district’s chief financial officer, the district will head into the 2010-11 fiscal year with a $58 million deficit. That number is with savings of $1.7 million from the current hiring freeze and $10 million from a spending freeze factored in, he said.

“Everything has to go right to hit these (savings) numbers,” Masias said. “This is perfection here, and this is an imperfect world.”

Masias said a possible reduction of state funding of $86.5 million would make the 2010-11 fiscal picture even more bleak.

The absolute worst-case scenario for a budget for the next academic year is $220 million.

“We’re talking about devastating our school system,” said Richard Barrera, the school board president.

The futility of continuing to make cuts and scrounge for savings, as opposed to building the budget up from the priority-based system, was shown by Masias’ estimate of the value of two major proposed personnel cost reductions.

A 1 percent salary reduction for employees would save $6.4 million for the unrestricted general fund, he said.

A one-day furlough for employees would total $2.6 million.

Some of the examples of priorities that the board could consider, as outlined by Stover, were:

  • a focus on English language learners;
  • creation of a 21st century learning environment;
  • reducing the achievement gap;
  • meeting the learning needs of each student;
  • and providing a well-rounded educational experience.

Once the top priorities, basic functions and mandates are funded, the staff can return to the board for it’s next set of priorities, if money is left over, Stover said.
Board member John De Beck, did not attend because he is recovering from a surgical procedure. District staff had no explanation for the absence of Shelia Jackson, whose term as board president ended Tuesday.