In an annual report sent to the Hesperia Unified School District late last month, the office of the San Bernardino County Superintendent of Schools says the district's finances are a matter for concern.
Teri Kelly, the business advisory services director for county superintendent Gary Thomas (a former administrator within the HUSD) sent the legally required report to the district on June 29. The report is on the agenda for Monday's school board meeting.
The HUSD "is planning unrestricted deficit spending in the 2010-11 and 2011-12 fiscal years based on the multiyear financial projections," Kelly's report reads in part. "This deficit spending is due to the loss of state aid and on-going operational costs."
In fact, the HUSD faced at $13 million deficit earlier this year, which it has so far gotten down to approximately $8.4 million through negotiations with two of the three groups of employees. Negotiations with the teachers union broke down earlier this year and both the district and union now wait for the report from a state fact-finding committee later this month.
But that $13 million deficit may have been an optimistic take on things, according to Kelly's report: "The multiyear [Average Daily Attendance] projections show the district with future ADA projections representing increases of 1.65 percent and 1.03 percent, respectively. These projections are higher than the historical average for the past three years experienced by the district."
The majority of unrestricted revenue for California public schools is based on ADA -- or the average number of students attending class in a district's schools. The HUSD experienced only a 0.14 percent growth in ADA over the last three years, approximately a tenth of the growth in students the HUSD is projecting for the next two school years.
"If ADA projections are overstated, it could mean reduced state revenues requiring additional expenditure reductions," Kelly said. In other words, if the HUSD's numbers are wrong, the district will need to make much deeper cuts than it already has.
The report ends with Kelly's five concerns over the HUSD's current state:
1) "Negotiations have not been finalized with the [teachers union] and the district is currently awaiting the final fact finding report."
2) The district "cannot meet the required minimum state reserves in fiscal year 2010-11 and the district is fiscally insolvent beginning in fiscal year 2011-12."
3) The district "has severe cash shortfalls which began in April 2010 requiring the district to acquire costly temporary borrowing options."
4) "The district's current dept ratio of 71.11 percent is extremely high."
5) The district's unrestricted reserve -- its rainy day fund -- is projected to drop by 212 percent from 2009-10 to 2011-12.
Kelly's full report can be found in the school board meeting agenda packet, available online at Hesperia.org.
Beau Yarbrough can be reached at 760-956-7108 or at firstname.lastname@example.org. Follow us on Facebook at Facebook.com/Hesperia.Star.