While Denair Unified School District was overjoyed last year to discover that it was finally on its way to fiscal recovery, continuing enrollment decline at the high school level has cut this celebration short as a lack of students can once again trigger tough financial decisions for the district.
In the 2015-2016 first interim budget report, DUSD projected a positive ending fund balance of $1,474,776 with $1,202,050 for unrestricted activity. The District anticipates having negative monthly cash balances throughout the fiscal year, but is estimated to have a positive ending cash balance of approximately $930,000.
Chief Business Officer Linda Covello said that while DUSD remains on track to meeting its fiscal target for the current school year—thanks mostly to a one-time $500,000 infusion of state funding to its $13 million budget—declining enrollment may force the district to make some difficult financial decisions in the near future.
Covello said that total enrollment for the 2015-2016 school year was 1,316 students, which is a 2 percent decline from the previous year. Despite the reported decline, this number is a significant improvement from a few years ago when the declining enrollment rate was as high as 11 percent. Average Daily Attendance funding for each student is approximately $8,000 a year.
“Our decline is getting better, but we’re still going down,” said Covello. “The middle school is pretty much stable. We have declining enrollment at the high school and growing enrollment at the elementary school.”
Covello predicts that DUSD will fall back into deficit spending in the 2016-2017 and 2017-2018 school years because of fewer students and higher mandated contributions to state retirement funds. However, the district will still be able to meet its 3 percent minimum reserve requirements.
“Fragile is a good word to describe our situation,” said Covello. “If enrollment was flat next year, we would be in deficit spending the third year out. We still would be next year because ADA is based on the prior year. If declining enrollment were to turn into increasing enrollment, then we would be able to restore salaries and provide more programs for our students.”
DUSD is hoping that history will not repeat itself since it has been slowly digging itself out of a financial red zone after it was threatened with a potential state takeover nearly three years ago. At the time, the district was listed as one of the negatively certified districts not projected to meet their financial obligations for the 2014-15 school year.
“The key idea moving forward is hope,” said Superintendent Aaron Rosander. “I don’t want anyone to think we can’t grow enrollment. We can. If we only think we can and believe, we will.”