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Berkeley School Board Faces Declining Enrollment, Deficit

Tuesday December 09, 2003

Berkeley schools—already reeling from several rounds of spending cuts—must slash another $2.2 million to balance this year’s budget, according to a First Interim Report presented to the school board last week. 

Board members didn’t discuss strategies to eliminate the deficit, which is down from the $6 million carried over from last year. 

State funding cuts, escalating health benefit costs and years of financial mismanagement have all contributed to the deficit. 

Declining enrollment cost the district $1.9 million in state funding this year and will cost an estimated $1.5 million next year, while employee benefits costs have skyrocketed over 20 percent the past two years, said Director of Fiscal Services Song Chin-Bendib. 

To get their financial house in order the district initiated a spending freeze, cut programs, laid-off administrative staff and eliminated approximately 55 teaching positions. The moves have ballooned average class sizes to 32 for fourth and fifth graders and over thirty for ninth graders after the district had to drop out of a federal program to reduce ninth grade class size because it couldn’t afford to pay its share. 

The $2.2 million deficit doesn’t take into account an expected bailout of the district’s cafeteria fund—which is nearly $600,000 in the red—or projected savings from employee health enrollment and worker’s compensation insurance reforms. 

Despite the wide-ranging cuts, Smith forecast future funding imbalances with projected deficits ballooning to $15 million by 2006/2007 if deficits were allowed to compound. 

Those projections included assumptions that teachers and administrators will forego pay raises for the next three years—a measure that boardmember Terry Doran thought required more public input. 

“That’s an important message that we need to convey as widely as possible, not at 12:30 a.m. at a board meeting,” he said. 

The teachers’ contract expired in June. Union head Barry Fike acknowledged that the district’s coffers were bare, but added that “it wasn’t a given that for the next three years no one’s going to get raises.” 

On the good news side, Smith reported that unexpected state funding had bailed out the district’s Child Development Fund previously $235,000 in the red. 

Smith said that accounting and data management systems are getting “tighter” after years of mismanagement landed the district under the auspices of the Alameda County Office of Education. He said the district could now account for all teacher salaries at each school, but that it didn’t yet have a handle on accounting for hourly employees like substitute teachers. 

Smith added the district would soon introduce a plan to decrease cafeteria operation costs, which could receive an additional financial shot in the arm or a devastating blow, depending on the success of the return of a cafeteria at the high school in January.