The Berkeley Unified School District still needs to cut $2.5 million to balance next year’s budget, according to new figures released at the Board of Education meeting Wednesday night.
The new deficit figure marks a $2 million jump over projections provided at last week’s meeting, when Associate Superintendent of Business Jerry Kurr predicted a $450,000 shortfall.
District officials said last week they accidentally counted $900,000 in funds from the Berkeley Schools Excellence Project twice, artificially inflating the district’s balance sheet and leading to the erroneous deficit projection.
The Excellence Project is a special local tax that funds class size reduction, instructional materials, maintenance, and other items in the Berkeley schools.
The BSEP error also lead to inaccurate projections of the 2003-2004 deficit. Last week, Kurr said the 2003-2004 shortfall will be $4.4 million. Wednesday night, he bumped up his projection to $7.3 million. Kurr is predicting a $12.9 million shortfall in 2004-2005 if the district doesn’t make cuts.
Berkeley Unified, relying in part on one-time infusions from block grants, the state lottery and awards for standardized test performance, is projecting an $880,000 surplus for the current year.
The district presented the new figures as a part of the “third interim report” on the budget. The board voted unanimously to provide a “negative certification” on the budget, as it did with the first and second interim reports, acknowledging that the district will be unable to meet its financial obligations next year without more cuts.
But board members, noting they have already made enough cuts to reduce next year’s shortfall from $5.4 million to $2.5 million, remained upbeat.
“I think we’re making progress despite the negative certification,” said Board president Shirley Issel.
“I actually see a light at the end of the tunnel,” added board member John Selawsky. “I think we’re getting there.”
Superintendent Michele Lawrence, in an interview with the Planet, acknowledged that Berkeley Unified will carry a deficit into next year, squashing hope that the district would finish making cuts this year.
The district is required to file a fiscal recovery plan at the end of June. Lawrence said the district will likely identify school property in the plan that it could sell to make up next year’s shortfall. But the superintendent said she does not intend to actually sell the property.
Instead, she hopes to watch the numbers shake out in the next couple of months and then make recommendations, possibly in august, for further programmatic and personnel cuts.
“I’m looking at this as a buying of time,” Lawrence said, referring to the identification of properties for sale in the June recovery plan. “I’m of the Scarlett O’Hara school – never sell the land.”
School board candidate Nancy Riddle said there is some disappointment in the community that the district will not finish cutting by June.
“There was great hope that we could make the cuts this year and start on an even keel next year,” she said. “So there’s great sadness.”
But Riddle praised the district for combing through its programs this year and making a host of difficult decisions already.
The Alameda County Office of Education, which has jurisdiction over Berkeley Unified, rejected last year’s budget, in part because the numbers were in disarray.
County Superintendent Sheila Jordan said she expects this year’s budget to be in proper shape and foresees county approval.
But while the numbers may be in proper order, the district will still face a deficit, Jordan said, and the county intends to keep in place the Fiscal Crisis and Management Assistance Team, a state body that has advised the district on its finances since October.
In the long run, Jordan noted, the district will have to develop internal controls that will last after FCMAT leaves.
“We’ve been really focused on working with them to develop sustainable systems,” she said.
District officials say conversion to a new data system, scheduled for July 1, will go a long way toward establishing long-term internal controls.