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Lompoc schools budget: LUSD operating at a deficit

Lompoc schools budget: LUSD operating at a deficit

061317 lusd karbula

John Karbula, Lompoc Unified School District’s assistant superintendent of business services, presents the district's 2017-18 budget to the LUSD Board of Education during a June 13 meeting. LUSD Superintendent Trevor McDonald, seated, looks on.

The Lompoc Unified School District’s financial state — both currently and what can be expected in the near future — will be among the primary topics of discussion at Tuesday night’s meeting of the board of education.

The board is expected to vote on whether to adopt the district’s 2017-18 draft budget, which will have the district continuing to operate at a deficit. It will also be presented with the results of a voter opinion survey that it commissioned this year to gauge the community’s views about having another school bond placed on the 2018 ballot.

The 2017-18 budget was first presented to the board by John Karbula, the district’s assistant superintendent of business services, at the board's June 13 meeting. Also at that meeting, Karbula presented the district’s Local Control Accountability Plan, which is a three-year blueprint that is required by the state as part of California’s new Local Control Funding Formula (LCFF) for school districts.

Karbula noted in his presentation that LCFF revenues are expected to increase throughout the state, but that many districts, including LUSD, will continue to deficit spend due to the fact that many costs, particularly benefits for employees, are going up at a higher rate than revenues.

LUSD is expected to receive about $86 million in LCFF revenue from the state, according to the 2017-18 budget. That money, when combined with restricted LCFF resources ($1.8 million), restricted federal and state funds ($12.8 million) and local revenues ($1.7 million), will bring the district’s total expected revenues for the upcoming school year to $102.5 million.

The budget lists expenses, however, of $104.3 million.

“We’re spending more money than we’re bringing in,” Karbula said.

While district leaders attribute part of that deficit spending to the rising costs associated with the California State Teachers' Retirement System and the California Public Employees' Retirement System, the district is also receiving less state funding due to its declining enrollment.

Because of these factors, the district expects that deficit to grow to $3.3 million in the 2018-19 budget, and $4.4 million in 2019-20.

Karbula noted that the district plans to get a clearer picture of the rate at which its enrollment is dropping — it is expected to be at 9,054 in 2017-18, which would be 122 fewer students than in 2016-17 — by hiring a consulting firm to investigate the issue and help the district in its future preparations.

On Tuesday's agenda for board consideration is a contract with Total School Solutions, at a cost of $15,109 to the district, for the firm to conduct a 10-year districtwide enrollment projection study and five-year school-by-school demographic studies.

Despite LUSD’s deficit spending, the district does have the state-mandated 3 percent economic uncertainty reserve, as well as a 2 percent operational reserve. Those funds will total $5.2 million in 2017-18, and are expected to rise to $5.4 million in 2018-19 and $5.6 million in 2019-20.

Separate from the budget discussions, the board meeting will also include a presentation from Greg Isom, of Isom Advisors, who is expected to deliver the results of last month’s voter opinion survey regarding a potential school bond. Isom may also offer recommendations to the board on what steps to take next.

The potential bond, according to district administrators, would be used to modernize, renovate and improve LUSD facilities.

The district sought a similar bond in 2016, but it ultimately failed despite getting 58.5 percent support from voters. That bond, due to the way its placement on the ballot was approved by last year's LUSD board, required a 67 percent threshold for passage.

Tuesday's board of education meeting is scheduled to begin at 5:30 p.m. in the LUSD Education Center Board Room, 1301 North A St.

Willis Jacobson covers the city of Lompoc for Lee Central Coast Newspapers. Follow him on Twitter @WJacobsonLR.

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