Phasing out planned deficit spending

Phasing out planned deficit spending
picture of financial charts

Three years ago, with the start of the Strategic Plan, the District began an intentional, planned spend-down of its healthy financial reserves in order to improve student outcomes and retain quality staff. This investment in students and staff members has resulted in the implementation of effective student academic programs and competitive staff compensation.

While preserving what’s best for students, the District will phase out this planned deficit spending of approximately $4.8 million each year. It’s important that the District reduce its expenditures now in order to maintain a Board-directed reserve of 17-20% in the next three years, while continuing to provide high-quality instruction and support to students.

In the coming months, the Board of Trustees and staff will be working through a transparent process to determine what reductions should be made.

Why there was planned deficit spending
In 2015, the Board of Trustees expressed concern about maintaining a high reserve while simultaneously falling short of implementing strategies that improve student outcomes, close the achievement gap and improve staff and teacher retention. So, the District began spending these high reserves for the benefit of students.

Since 2015:
· Added Response to Instruction teachers to support students who needed intervention, as well as students who need more challenge.
· Implemented Sheltered Immersion Observation Protocol (S.I.O.P.) district wide to improve outcomes for English language learners
· Revised the middle school schedule to be more inclusive of all students
· Restored health benefits to impacted employees
· Implemented a 23% increase in 4 years for staff salaries to make compensation competitive and boost retention
· Added instructional coaches at each site
· Added school community engagement facilitators to support families
· Provided turnaround funding to two school sites to improve student outcomes
· Expanded summer school
· Provided summer and winter meals to students

In addition to ending the District’s period of planned deficit spending, we also have less revenue. Here’s why.
Over the past three years, MVWSD has enjoyed increased revenues from growth in the city. As a community funded / basic aid district, revenues are tied to the Assessed Value (AV) growth. For three consecutive years (2015-16 to 2017-18) AV growth was double-digit. However, the 2018-19 AV roll fell close to 2 percentage points below projections resulting in a loss of $785,000 in projected revenues.
A new charter school could mean a reduction of $1.8 million dollars in revenue in its first year.

What reductions have already been made
MVWSD implemented a hiring freeze for non-school based positions and began to eliminate positions, saving $1 million.

Process for making reductions
The Board of Trustees in partnership with the Superintendent will work to develop the list of programs that should remain intact in order to carry out the SP2021. Once that list is developed, sites / departments will work with their communities to identify their spending priorities; those essential to meeting its LCAP, Strategic Plan and site plan goals. Each site will receive a proportional amount that is reflective of its impact on the overall budget (i.e., Department A = 15% of all MVWSD expenditures). So Department A would have to reduce its overall expenditures proportionally by that percentage.

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