COVID-19 has decimated the financials of institutions across the Westside, but Santa Monica-Malibu Unified School District officials said this week that they expect to come out of the pandemic in better financial shape than previously projected.
When SMMUSD leaders adopted its 2020-2021 budget in July 2020, it was projected that the district would be forced into deficit spending for the foreseeable future. But, according to Melody Canady, SMMUSD’s Assistant Superintendent of Business and Fiscal Services, the district’s latest budget revision predicts SMMUSD will see millions of dollars in COVID relief funds that will help bolster reserves in light of a $1.9 million expected decrease in property tax revenues.
Canady highlighted SMMUSD’s 2020-21 Third Budget Revision during a presentation Wednesday when she said one of the most significant changes from the second Interim Budget completed on January 31, is a $5.2 million increase in redevelopment agency funds that will pair with $4.4 million in COVID relief funds to provide a much-needed boost to district reserves.
“I’m actually proud to say that we are actually recommending this budget with a positive certification. And it does meet all of the obligations in this year and the next two fiscal years,” Canady said shortly after she detailed the $3.9 million increase in the restricted General Fund’s balance and a $4.7 million change in the Unrestricted General Fund’s balance.
“If you remember, two years ago, we were deficit spending about $7- to $8-million, almost $9 million. But you ended up making some decisions throughout the last three years to get us to this point,” Superintendent Ben Drati said.
And while Canady noted how a potential recall election, quoted at approximately $750,000 from Elections Office of Registrar-Recorder/County Clerk, and other non-budgeted items like negotiations with differing unions would skew the projections, Drati said a projected Property Tax Increases of 5% and other revenue increases, like the $200,000 increase in contributions to special education, have him optimistic SMMUSD will be okay.
“We’re confident about that,” he added, sharing his belief that the district has a lot of room to make some great decisions in the future without pressure. “We can address some of the aspirations about the master schedules and be able to offer more courses and different things that we wanted to see from the past. We’re primed to be able to have some great conversations in near future… So what I want to say is good job over the last three years getting us here… We’re in good shape.”
Board Member Craig Foster commended district staff for working to get the district’s deficit spending down from $5.5 million to the $741,000 detailed in the April projections. But he was also adamant that his peers remember to not spend money simply because they have the ability to.
“I mean, obviously… we’re gonna be blessed with a lot of COVID revenues. And one thing that certainly I’ve seen in my time on the board is we’ve got to be very, very, very, very — squared to the third power — careful that we don’t confuse one-time revenues with ongoing revenues. That’s how we get ourselves into great big hot water,” Foster said. “So we’re all going to be — and we’re going to need help from fiscal services — but we’re all going to need to be very, very, very careful to spend one-time money on one-time things so that when the smoke clears after COVID we still have a stable budget.”
Prior to the conclusion of Thursday’s budget discussion, Canady said staff intends to return with a preliminary budget on Thursday, June 3.