School Board Looks to Balance Budget with Reductions By J. DOUGLAS ALLEN-TAYLOR

Tuesday May 10, 2005

With the Berkeley Unified School District locked in a contract dispute with teachers, in part over requests for increased money, BUSD board directors continue this week with the task of trying to balance an already shaky budget. 

At this week’s board meeting, scheduled for 7:30 p.m. at the Old City Hall at 2134 Martin Luther King Jr. Way, the BUSD board will consider $670,000 in reductions to the district’s general fund for the 2004-05 and 2005-06 fiscal years. 

According to Deputy Superintendent Glenston Thompson, the moves are necessary in order to restore the district’s legally mandated 3 percent reserve fund, as well as to bring the district out of its probationary “qualified” budget status. A “qualified” budget certification means that the district believes it may not be able to meet its financial obligations during either the remainder of this fiscal year or the following two fiscal years, and triggers stiffer fiscal oversight by the Alameda County Office of Education. 

In his memo to Superintendent Michele Lawrence recommending the budget action, Thompson cited a March 22 letter from the Alameda County Office of Education to School Board President Nancy Riddle. 

“With the ongoing uncertainty of economic conditions, it is critical for the [Berkeley Unified School] District to take proactive action to develop a multi-year recovery plan to maintain the fiscal health of the district,” Riddle wrote. 

Much of the budget-balancing to be considered Wednesday will be a bookkeeping operation. Approximately $586,000 of the general fund reductions are not actual cuts in programs, but are expected to be transferred to other district accounts, including Titles I and II, BSEP, and Measure BB; $664,000 is projected as actual two-years cuts. 

Earlier this year, the BUSD board approved $579,000 in actual cuts, voting to eliminate close to 14 classified positions. With those cuts and the reductions to be considered on Wednesday, the total two-year general fund budget reductions will add up to more than $1.25 million. 

In his memo to Lawrence, Deputy Superintendent Thompson said that additional budget reductions for the 2005-06 fiscal year were expected to be presented to the board for approval, noting that these would be “in the areas of BHS Athletics, Transportation Department facilities and operating expense, and Special Education Service Provider fee reductions.” 

Unofficially, BUSD representatives have been holding some hope that the district’s budget problems can be eased through relief by the state Legislature in the area of the 3 percent reserve requirement. 

For the past two years, to keep many of the state’s schools from going bankrupt, the Legislature temporarily lowered the required reserve fund for districts from 3 percent to 1.5 percent. The reserve fund is the percentage of the yearly general expenditures that each school district must keep in hand—uncommitted in the budget—in the event of any unexpected fiscal developments. Lowering the required reserve gives districts a smaller fallback position in the case of emergencies, but also gives them more flexibility in balancing their present budgets. The 1.5 percent reprieve is scheduled to expire with the 2005-06 fiscal year, with the state’s school districts required to return to a full 3 percent reserve. 

State Assemblymember Wilma Chan (D-Oakland) has introduced a bill that would extend the reprieve, setting the reserve at 1.5 percent in 05-06 and 2.25 percent in 06-07, not to return to the full 3 percent until 07-08. Although Chan’s bill easily passed the House Education Committee last week and has good prospects of becoming law, Berkeley school officials cannot consider it in their official budget calculations. Alameda County Superintendent of Education Sheila Jordan has said that her office must assume for the present in their oversight capacity that the full 3 percent needs to be in place for next year’s school budgets. 

At Wednesday’s meeting, the board will also consider a resolution in support of a state Senate measure that would lower the requirement for the passage of school bond measures—the same school bond measures (BSEP and BB) that are allowing the district to meet its current general fund balancing crisis. Since the passage of Proposition 13 in the 1970s, school district bond measures require a two-thirds majority vote to pass. State Senator Joe Simitian (D-Palo Alto) has introduced a Senate Constitutional Amendment (SCA 8) to lower the local parcel tax passage requirement to a 55 percent majority.