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August 3, 2020

Gonzales schools face looming multi-million dollar budget shortfall

Deferrals could total $4.6 million for district

GONZALES — Board members for Gonzales Unified School District recently discussed looming budget problems, which according to a presentation from Associate Superintendent Mary Dawson, could have deferrals totaling $4.6 million.

“Although deferrals are scheduled to be repaid, this amount of deferrals can be catastrophic to a district,” according to Dawson’s notes presented at the June 23 meeting.

The district expects to have an enrollment of 2,340 students in the 2020-21 school year, and complications for the upcoming academic budget include: anticipated state budget changes, employee salary adjustments, increased contribution to Special Education and projected retirement increases.

While the district works to solve the problem, they are able to revisit the budget in August for a 45-day budget revise.

“This is no normal year, and no ordinary revision,” Dawson said.

Board Clerk Jose Lopez questioned how much time the district has to correct course.

Dawson answered that the district has the funding to run for two and a half months, then an additional two months thanks to reserves.

When Lopez asked what happens after that period of four and a half months, Dawson answered, “We won’t be able to meet our payroll.” If the district is unable to procure funding, it would rely on the state to provide additional funds through a loan, also known as a bailout.

District leadership clarified the financial status of the district would not affect WASC accreditation, unless funding deficiencies impacted instructional programs.

“Right now the worry should be less about whether we can do payroll, but in fact if we are four months out and we are not fiscally solvent, the board as well as the superintendent will lose autonomy,” said Yvette Irving, district superintendent.

In the event of fiscal insolvency, the county would be the first to intervene, followed by the state. Once the state provides a bailout loan, they typically send an administrator to oversee district operations to guarantee the district can repay the loan.

“In all probability, this would be a mass casualty situation because it will impact every district in the state,” Irving said. “We will not be the only ones.”

Irving explained that Gonzales is in a situation in which correcting course may prove a challenge.

“What is difficult for us is we are a smaller district and we don’t have the resources of a larger district,” she said.

Multiple public comments mentioned recent pay increases for administration, but staff explained those increases are in line with overall faculty and staff pay adjustments.

Sean Roney
Sean Roney
Sean Roney is the reporter for King City Rustler and Salinas Valley Tribune, a unified publication of Greenfield News, Soledad Bee and Gonzales Tribune. He covers education, government and general news for the Salinas Valley communities in South Monterey County.


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