Over the course of more than three hours Tuesday night, officials drove home the point that the .
But while it was clear that a series of difficult decisions lie ahead to address the district’s economic predicament - a projected budget gap of $1.4 million in 2011-2012, $2.5 million in 2012-2013 and up from there - much of the discussion centered on the all the empty chairs in the room.
Just a few dozen parents gathered at for the budget study session. Across town at , more than 400 people attended a rousing performance from the school’s orchestra.
To many people at the meeting, that juxtaposition was clear evidence of the tough sales job the district has in front of it. The diverse, high-ranking educational product that the district’s six schools put out year after year – five of the district’s six schools scored perfect 10s in school rankings this year based on state test scores - belies the financial jam the district finds itself in, several people said.
That jam includes rising enrollment and the subsequent rise in costs that comes along with it, declining revenue from property taxes and an ongoing reduction in state funding of $1.52 million, a reduction that will only increase as enrollment grows.
In short, “we’re looking at something like $1 million in cuts, going out for a $2 million parcel tax, asking Kiddo to raise a few more hundred thousand dollars, and even then it’s going to be tight,” board member Steve Sell said. “We’re going to have to work every single one of these levers and we’re going to have to bat a thousand to make this work.”
Because administrators, teachers and staff have not let the cuts of past years impact the quality of public education in Mill Valley, that message simply has not gotten out to parents and the local community, many attendees said.
“It looks seamless,” administrative staffer Karen Manini said. “Our kids are still coming out smarter than everybody else’s kids. But we need a clear message that says, ‘this is what we’re going to lose, and this is who we’re going to lose.’ The average parent hasn’t felt any pain.”
Erin Conklin, co-president of the Mill Valley Teachers Association, agreed.
“We have all these things that are eroding away at our programs,” she said. “The product that you see is not significantly different than when class sizes were smaller. I still think that we need to make that product look different before people are going to understand.”
The district is in the early stages of formalizing a plan to cure its financial ills, but all options, including those that could hurt its educational product, like layoffs, are on the table, according to documents provided at the study session.
Mill Valley is one of only 124 “basic aid” (“community-funded") school districts in California, which means that its per-pupil property tax revenue exceeds its per pupil revenue limit. The state doesn't provide any general purpose funding to community-funded districts, only funding for specific purposes, such as maintaining a 24-to-1 student-teacher ratio for kindergarten through third grade.
Districts that aren't basic aid are dubbed "revenue limit" districts, where the local property tax isn't enough to meet the per-student amount, so the state makes up the difference. Those districts have felt the brunt of the budget cuts in recent years, so the state has taken "fair share" reductions from basic aid districts to spread the pain, so to speak.
The Mill Valley School District receives $1.3 million from the state to maintain a 24-to-1 student-to-teacher ration from kindergarten through third grade. In 2009-2010, the state took $610,000 of those categorical funds back, and another $934,000 in the current 2010-2011 school year.
The reduction is based on the district’s average daily attendance numbers, so the higher enrollment goes, the more the reductions will increase. For Mill Valley, which has seen its enrollment rise by an average of 100 students for each of the past six years (to 2,825 this year), that rise drives up costs. That trend is expected to continue, as district projections indicate that enrollment in the 2018-2019 school year could climb as high as 3,659, a whopping 57 percent increase from 2006-2007.
The problem is exacerbated by the fact that property tax revenues, which account for 55 percent of the district's annual funding, declined 1.56 percent from last year and are projected to stagnate for the next three years, according to the Marin County Assessor’s Office.
The Road Ahead
The district’s road map focuses on increasing revenue and reducing its expenses.
Increasing revenue will likely mean going back to voters and asking for a renewal and increase on the parcel tax, which was passed in 2004 and raised and extended via Measure A in November 2008. .
Even if the district is able to pass a parcel tax hike, it will need to dip into its reserve to bridge the gap until it does, district officials said. To get there, Sell said, the district will have to use part of its current $3.1 million reserve as a bridge of sorts. The district is required by law to keep a reserve of at least 3 percent of its nearly $30 million budget, or approximately $900,000, leaving $2.2 million as its potential “bridge money.”
“We’re in a pretty difficult situation,” Sell said. “It’s intended to bridge the district to a new normal level of both revenues and expenses.”
Because it is a community-funded district, Mill Valley doesn’t receive more money from the state as its enrollment rises. In fact, its predicament is only worsened by the rising enrollment. As a result, the district is increasingly reliant on the generosity of its affluent community.
“We’re heavily dependant on the money we raise here privately to fund our schools,” said Mike Fuchs, a member of the district’s financial advisory committee.
The Mill Valley Schools Community Foundation, better known as , was in the hopes of bolstering funding for the district’s grants for arts, music, drama and dance programs in a post-Prop. 13 world. It raised $27,000 that first year, she said.
As the district’s financial picture has worsened over the years, Kiddo has picked up more and more of the slack, and this year funded $2.1 million for arts programs and a host of other school needs, from
Those private donations have come to be a vital cog in the district’s annual budget.
“In all of my 30 years, this is the worst that I have ever seen it,” Garlock said. “Our community has stepped up big time year after year.”
But even that generosity has shown recent signs of fatigue. Garlock said that Kiddo has received $100,000 less in donations from 89 fewer donors this year compared to the same time last year.
The PTAs have also stepped up their commitments, partnering with Kiddo on a wide variety of projects, such as putting on art shows to display students’ Kiddo-funded art work.
The most divisive lever the district must pull to get out of its financial conundrum is cutbacks, which could range from furlough days and layoffs to continuing to grow class sizes and trimming programs.
Some things, like a literacy coach, technology coordinator, and some elements of the middle school’s alternative education program, have already gone by the wayside, Superintendent Ken Benny pointed out. At its last meeting, the board voted to lay off one custodian.
The board will consider possible reductions in the number of physical education classes, in the number of kindergarten aides and a cutback in the district’s Reading and Math Support Program (RAMP), which was paid for with federal stimulus money that goes away after this year.
“We’re getting to a place where we’re not talking about nibbling at things around the margins,” Benny said. “We’re talking about things that get at the core mission of our school district.”
The district spends approximately 86 of its annual budget on salaries and benefits for its employees and retirees. That means that while the board can make unilateral decisions about 14 percent of its budget, it most of the rest with its teachers and employee unions. The district and the unions are coming off a less than six months ago.
For instance, the district sets aside $305,000 per year to pay for OPEB (Other Post-Employment Benefits), or the cost of the benefits of its retirees. In a draft worksheet distributed Tuesday, the district listed not setting aside that money as a possible savings.
The district estimated that if every employee took one furlough day, it would save $96,000 in the 2011-2012 school year.
District officials continued to hammer its message that it will take all – not some – of the aforementioned options to avoid a major financial mess very soon.
“It’s really going to be about all of us pulling together as a community and finding ways to pull on all of those levers and looking at what the consequences will be if we don’t work together to pull on those levers,” Benny said.