The City of Sausalito Marin School District, still in the first year of its historic unification, is about $1.5 million short of what it needs to stay above the 4% reserve minimum, according to a county analysis.
The Marin County Office of Education issued a “qualified” district budget certification in mid-December. The designation means that unless changes are made, “the district may not be able to meet its financial obligations for the current two years and the next two years,” said Mary Jane Burke, superintendent of schools. of Marin, in a January 14 letter to the district council. of trustees.
Burke said the drop below 4% in reserves first emerged last month when the district submitted its first interim report on the current budgets and the next two. It revealed the district’s use of one-time pandemic relief funds to bolster staff during the process of unifying its schools. The budget for schools in the city of Sausalito Marin is normally around $10.5 million. With additional pandemic relief money from the current year, it comes to $12 million.
“The increase in the deficit is mainly due to an increase in personnel costs,” she said in the letter, which the administrators discussed on Thursday during a budget workshop. “Notably, the district increased its initial unified endowment budget by $1.6 million when it passed its 2021-22 budget in June, using restricted one-time funds.
Burke and Terena Mares, deputy superintendent of schools in Marin, acknowledged the district knew it was using one-time funds to help achieve unification between Willow Creek Academy, its former charter school in Sausalito, and the Bayside Martin Luther King operated by the district. Jr. Academy in Marin City.
“We were told the band-aid could have been removed before we unified – but we didn’t think that was a good idea,” administrator Yasmine McGrane said, referring to one-time funds at Thursday’s workshop. . “Now we need to do everything we can to help the district get back to 4% minimum reserves.”
McGrane added: “We knew this was coming. It’s not like it fell from the sky.
Administrator Bonnie Hough agreed, saying, “I think considering everything we had to do to achieve this unification, I think we did remarkably well.”
Mares, who attended the workshop, said she would step in to help the district reduce its spending plans and increase its reserves above 4%. Further support will come from a new budget advisory committee, approved at a special meeting later Thursday, and a tax consultant who will meet frequently with the district and other staff.
“It will be difficult, but it is necessary to continue to provide a stable environment for the children,” Mares told the council. “We’re not saying you can’t hire, but you should review every position very carefully before filling it.”
The county ordered the district to freeze vacancies and use rigid analysis before any new hires. The council was also ordered to pass public resolutions this month and in February and March explaining the situation to the community.
The first resolution was adopted at the special meeting on Thursday evening.
Superintendent Itoco Garcia said he will need to add to the roster the person responsible for monitoring the district’s progress in complying with a 2019 desegregation order from the state attorney general’s office. He said the desegregation order specifies that students in the unified school should be provided with a certain level of equal and appropriate education.
“I’m not going to cut credentialed teachers to just one subject,” Garcia said.
Garcia said while the district can get back on track fiscally, he doesn’t believe the qualified rating will affect the district’s bond rating when issuing new bonds. The district has already issued its first round of voter-approved Measure P bonds to complete repairs and renovations at both campuses in Sausalito and Marin City.
Mares said no one blames the district for the current budget situation, given the needs of unification in the midst of a pandemic. The new unified school was named the Dr. Martin Luther King Jr. Academy earlier this month.
“There isn’t a single school district in the state that isn’t dealing with the most complicated budgets they’ve ever had right now,” she said. “Yeah, there’s a ton of new money coming in, but it’s all tied to conditions – and you have the added complexity of unification.”