SM-FCSD Board Forced To Borrow Money To Pay Staff

The impact of the state legislature's inability to pass a budget has hit the San Mateo-Foster City School Board hard, as board members last night were forced to approve borrowing money in order to be able to pay staff salaries.

The board unanimously approved a resolution to instruct district staff members to find available short-term loans that could be taken out to fill a budget gap left by dwindling or delayed payments from the state.

"Because the state has little or no credit, that are pushing that burden down and now forcing us to borrow," said board chairman Mark Hudak.

Governor Jerry Brown has been unable to garner the necessary support from conservative lawmakers in order to pass along a tax extension proposal to voters. Gov. Brown has attempted to close the state's $30 billion deficit by splitting the cost between service cuts and revenue from the tax extensions.

And though he has approved nearly $15 billion in cuts, gaining support for the other half of his proposed plan to fill the remaining budget hole has proved to be an insurmountable challenge.

In light of this crisis, the state has been unable to fulfill its financial obligations to public schools. The legislature has issued up to $2 billion worth of payment deferrals to districts including the San Mateo-Foster City School district, according to a district report.

But still the district must pay its employees, without a contribution from the state. And the district's increased payroll obligation comes at a time when board members are attempting to shave almost $8 million from the budget over the next two years.

"We need to take out loans to be able to pay our payroll," said Hudak.

The board members did not identify how much money staff should look to borrow last night, but Hudak did request that a low interest rate be attached to the loan.

District staff also identified $8.5 million worth of budget reductions and revenue savings that could be implemented to close its deficit over the next two years. But not all budget measures will be implemented, as the board is attempting to fill $7.7 million of its financial hole this year, and pass the rest of the budget action onto the 2012-2013 fiscal year.

A significant source of revenue factored into the district's upcoming budget is taking advantage of allowed flexibility with funds offered by the state that are intended to be used to reduce class sizes in kindergarten through third grade.

The Class Size Reduction Act provides extra money to districts that is supposed to be spent to ensure class sizes do not grow to more than 20 students per teacher.

But as state and local agencies have been forced to cope with the repercussions of a downtrodden economy, restrictions have been loosened on how school boards may use the funding.

And like many other school districts that are strapped for cash, the San Mateo-Foster City School District's administrative business officers have recommended the board  of trustees approve using the class size reduction funds to balance the budget, rather than for its intended purpose.

But this recommendation was met by resistance from the mother of a district student at last night's meeting.

Jenna Carson, a teacher at Menlo-Atherton High School, said that the potential cost savings achieved by implementing work furlough days for district employees should be examined before the board forgoes trying to reduce class sizes.

Currently the district is facing a 24 student to one teacher ratio, and projections show that figure will increase to 26 students per teacher in the near future.

"26 students per class is problematic to me as an educator and as a parent," said Carson.

She said that allowing class size to grow flies in the face of the board's goal to provide students with the best education as possible, because larger class sizes prevent students from receiving the same attention from their teacher they would in a smaller class.

Carson also added that the district's neglecting to reduce class sizes has created difficulty in the ability to retain some of its best teachers. Because some teachers would rather not face the stress of managing so many students on a daily basis, and elect to take their talents to other, less crowded districts.

"I don't want you to think of this money as an easy way to solve this budget crisis, because it certainly isn't," said Carson.

In response, Superintendent Pendery Clark said that should the district sustain its current dire financial state, furloughs would likely become a necessity.

"Given the types of cuts we've taken as a district, I'm sure furlough days will be part of that," said Clark, referring to future budget considerations.

The district stands to save $221,630 in potential spending per furlough day, according to Clark.

But Hudak said that since the district receives $2 million in class size reduction funds from the state, 10 furlough days would be necessary to account for the same amount of savings.

And even though the district's class sizes are growing, they are still smaller than many other local districts that are comparable in size, such Redwood City School District, which is facing 30 students per teacher, said Chief Business Officer Micaela Ochoa.

Members of the district board and administration will continue to work on resolving the deficit the through the coming weeks, as they intend to approve the next fiscal year's budget at the June 16 board meeting.

In other business, the board approved to move forward with laying the groundwork for floating a bond measure to voters in Foster City in order to build a fourth elementary school in Foster City.

Ochoa said the bond, which is expected to go on the November ballot, would tax Foster City residents $19 per each $100,000 of their appraised home value. If approved by voters, the bond could generate $25 million for the new school's construction.

In topics unrelated to district finances, the board voted 3-2 in favor of implementing a dress code at Fiesta Gardens International School in San Mateo, despite concerns from board members Hudak and Ellen Mallory Ulrich, who dissented due to fears that a dress code would stifle the students' freedom of expression.