Financial FAQ, May 30, 2019
Q: Does the District have $26 million available for a salary increase?
A: No. The District closed the 17/18 fiscal year with an ending fund balance of $26.14 million. This ending fund balance, less State-required reserves and designations of $13.59 million, leaves $12.5 million in undesignated reserves that could be allocated based on needs and priorities of the District. It is imperative to remember that these figures are for a single fiscal year and are snapshots in time.
As of the latest District financials, which is the Second Interim Report approved in March, the District multi-year budget projections include planned budget reductions of $3.9 million and $4.7 million for 19/20 and 20/21, respectively. It is critical to note that even with these reductions, the District projects deficit spending of $4.95 million and $2.52 million for the same two out-years.
The Alameda County Associate Superintendent of Business Services, Mr. Raul Parungao, acknowledges and affirms this information. Importantly, he stated that undesignated reserves of $12.5 million are one-time in nature and advises against these funds being spent on on-going expenses like employee salaries.
Q: If the District accepted NHTA’s current proposal would it jeopardize the fiscal solvency of the District?
A: Yes. The current proposal from NHTA for 18/19 and 19/20 is estimated to cost the District $17.6 million over a three year period. While the proposal is for two years, the District is required to present a three-year balanced budget, subject by review and certification by the Alameda County Office of Education, and ultimately, the California Department of Education.
This proposal by NHTA exceeds the District’s framework by approximately $11.6 million. This means the District will be required to make more cuts for 20/21, in addition to the estimated $4.7 million already planned. If the District does not have the ability to make the required reductions, the District’s Budget would be certified as qualified or negative.