The Budget Advisory Committee Preliminary Report and Initial Recommendations to: the Acton/Agua Dulce Unified School District, Board of Trustees. Presented at the May 26, 2005 Regular Board Meeting
5-26-05 The Budget Advisory Committee has reviewed data supplied by the District Office as well as other sources, and after performing a thorough examination of the District’s income, expenses, assets and liabilities the Committee finds that the District will not be in a position to meet its projected budgetary obligations, as defined in the latest interim budget report. In order to avert this outcome, it is the assessment of the Committee that a substantive change in the District’s current operating strategy and current budget structure must occur.
Due to the fluidity of ADA levels in the District, the unknown impact of the State’s fiscal commitment to public schools, and the volatile nature of developer fee income within District boundaries, the Committee is currently unable to pinpoint at what specific point in time the District’s budget obligations will exceed its budget balances. The best assessment of the Committee is that this situation will occur within the next two to three years.
The committee’s position is that the budget is experiencing a systemic problem (not a new revelation) that must be addressed to eliminate future similar circumstances. The current budget as structured and operated cannot meet the long term debt service obligations of our COP’s, the long range lease obligations for the high school and the lease payments for 29 State owned modulars – all of which collectively place excessive pressure on the budget on an annual basis.
Such pressures have caused an imbalance in the budget, initially experienced in the General Fund and now in Restricted accounts such as Funds 14 (Deferred Maintenance Funds) and 25 (Capital Facilities Funds).
The long term stabilization of the budget must involve its restructuring so that:
▪appropriate balances are maintained to avoid encroachment of "Restricted Fund" obligations on "Unrestricted Funds"
▪"Restricted Funds" are managed in a way to maximize State allocations and that these funds are used to relieve negative impact on the District by keeping facilities in good working order and repair
▪relief can be sought from the collective pressures that continuing debt service and modular lease payments have made on the District
In order to avert the projected shortfall noted above, a series of fiscal strategies must be put into place and a series of steps must to be taken without significant delay. The Committee recommends that the District immediately pursue these steps, with the first and most immediate step being a significant adjustment to the District’s current consolidation plan:
The Budget Advisory Committee asked the Facilities Committee to look at a series of options and to suggest alternate options that would address the facilities needs in the District. Their response to this request is attached for your review. In their response they noted "pros and cons" for each option.
As difficult and provocative as it may sound, this first step would call for the reduction in use of Meadowlark Elementary School and the re-opening of Acton School (otherwise referred to by the Budget and Facilities committees as a modified "Option 2"). Functions currently in place at Acton would shift to Meadowlark (with the possible exception of the Success Academy) and K-5 classes would move to the Acton campus. The benefits of such a move are:
▪The District would still maintain the fiscal savings in the General Fund associated with consolidation. (As a result, future daily operational needs and employee salaries are not adversely impacted by this strategy)
▪The significant costs required to move and install modulars to Meadowlark can be saved with these funds being diverted to Acton. Instead of paying to move modulars to Meadowlark, which only addresses a portion of the immediate overcrowding issue and lack of enrollment flexibility at that sight, this money can be used to cover the costs associated with the change over between Meadowlark and Acton Schools.
Costs for Acton: $65,000 (one time moving costs)
$80,000 upgraded playground
$40,000 kitchen repair and upgrade
Total: $185,000
Costs to move modulars: $ 180,000 (approx.)
▪Acton School will allow enrollment flexibility that cannot be achieved without further expense that the District cannot afford (from any Fund).
▪Acton residents living within the current (new) Acton/Meadowlark attendance boundary that now attend Agua Dulce School will have a choice (if allowed by District policy) to return to Acton School – or not, depending on a given family’s personal desires and needs.
▪Teachers still maintain the continuity of education at the elementary grade levels that Teachers have strongly advocated will remain in place.
▪The change over to the Acton campus creates a foundation for allowing greater District discretion in the use of restricted accounts:
Example 1:
-The District has options in regard to 6th and 9th grade housing that could save the District anywhere between $160,000 to ½ million in Developer Fees
Example 2:
-By achieving these savings (example 1) the District will have the ability to develop a true Deferred Maintenance Plan that will have a funding stream that allows for ongoing facility maintenance and upgrades.
The Committee, as part of its formal report (to be presented in the near future) will be making a recommendation that a modernization plan for Acton School be initiated with the first effort involving two classrooms. The design of these classrooms would result Primarily from input from the teachers. The Committee advocates the re-design and upgrade of these rooms into state-of-the-art classrooms that not only meets but also exceeds the baseline standards for modern day grade school classrooms. In essence, these rooms will serve as prototypes for additional modernization of existing classrooms at Acton and Agua Dulce campuses and for future new construction.
The foundation that is created from this move, will allow fund balances in Fund 25 (Capital Facilities Funds) to be used for the following:
-To set aside funds to cover the projected budget gap. This will eliminate the need for further consolidation, which will be detrimental to the District.
-To develop a Deferred Maintenance account that is funded and practical.
-To provide teachers with modernized classrooms that support their efforts to educate our children.
It must be noted that the recommendation to transfer grades K-5 to Acton, is a foundational step that positions the District to meet its potential budget shortfall as projected and allows for more beneficial use of restricted funds, however, it alone will not resolve the major systemic problem associated with COP and lease payments. The Budget Advisory Committee is currently working a solution to this systemic problem and will be reporting on it soon, but there is no way to initiate that solution before the pending shortfall is encountered.
In an effort to allow the "Community" to hear and discuss these recommendations prior to their being adopted, we have scheduled a "Public Meeting" at Meadowlark School on Tuesday May 31, 2005 between 7:00 PM and 9:00 PM. The Committee requests that the Board assist us in our effort to assure a good turn out by sending a notice of the meeting home with students tomorrow. With this joint effort to inform the Community we are hopeful that the specifics of the recommendations and their impact can be adequately explained and examined.
ATTACHMENT #1Facilities Committee Review of Budget Committee Request