Castaic schools budget indicates ‘conservative’ plan

Castaic Union School District district officials outlined the difficult financial situation facing the district at a governing board meeting Thursday, when it finalized its budget for the 2018-19 school year.

“In general, the June budget for Castaic Union School District reflects the challenges of declining enrollment and increased liability related to (employee pensions),” the budget reads.

Right now, the district is required to contribute $1,536 annually toward any employee who qualifies for retirement and is covered under the California Public Employees Retirement System, according to the budget. “The projection for 2018-19 is $165,614,” but it is expected to increase each year as employees retire or become eligible for Medicare.

Castaic has seen a steady 13-year trend of enrollment loss from a student enrollment high of 3,617 in 2004-05 to the current low of 2,147 in 2017-18, Chief Business Officer Linette Hodson said to those in attendance at last week’s budget hearing.

She added the district is projected to continue declining enrollment through 2020-21, and when this is coupled with rising pension costs, the district might be forced to make staffing reductions within the next two years.

The news comes on the heels of an announcement that Castaic teachers recently received a raise.

In addition to potential layoffs and rising costs, the budget notes, “The ending fund balance is decreasing significantly each school year due to deficit spending.”

According to the district’s financial statement, the projected balance of the district’s reserves will go from $4.8 million this upcoming year to $3.1 million in 2019-20 and drop to a low of $898,000 in 202021, which is only $200,000 more than the state-mandated reserve fund a district must save for economic uncertainties.

Even though Gov. Jerry Brown’s latest budget proposal included fully implementing the state’s local control funding formula (LCFF) ahead of schedule, Hodson said “the district will see less money than I had originally hoped for,” because Castaic will lose base funding according to the latest budget update.

Board members were shocked to hear the news on Thursday, since California’s base funding for students already ranks near the bottom when comparing to other states in the U.S.

Since the district is unable to rely on new funding from the government, the budget states, “Increasing student enrollment and attendance is one of the most effective ways of restoring a positive financial picture.”

As a result, “The district will continue to plan for a reduction in LCFF revenue for the future years,” Hodson said, until the trend of decreasing enrollment reverses.

Board members concurred that conservative planning is the best course of action, since revenue is projected to decrease this year, next year and in 202021, according to the adopted budget, due to decreased average daily attendance.

“We have chosen to project conservatively,” Superintendent Steve Doyle said at last week’s meeting, because the districts who don’t will find themselves in trouble down the road.

“In general, the June budget for Castaic Union School District reflects the challenges of declining enrollment and increased liability related to (employee pensions)”

Excerpt from the Castaic Union School District budget