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Calaveras Unified School District Provides Fiscal Update

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Calaveras, CA– Superintendent Mark Campbell of Calaveras Unified School District (CUSD) addressed staff and families in a letter dated April 2, updating them on the challenging budget situation and projections.

The letter provided a comprehensive overview of the district’s fiscal journey over the past year, highlighting key events such as the approval of a revised budget in September and the implementation of measures to address budget deficits. It detailed efforts to reduce expenditures, including freezing non-essential spending and exploring potential staff salary concessions. Updates from January to March 2024 were also outlined, including the exploration of short-term loans and adjustments made to district budgets to address cash flow concerns.

Campbell emphasized the challenges still facing the district, acknowledging the significant impact of budgetary decisions on staff, students, and families. Despite progress made in improving fiscal stability, he noted the ongoing need for collaborative efforts to address the structural deficit and ensure the district’s ability to serve its community effectively.

The full text of Superintendent Campbell’s letter is provided below:

CUSD Staff and Families,

I am sharing information to update you all on the status and projections regarding our ever-evolving budget situation.

A quick recap of the evolution of our fiscal situation this year (all of which has been communicated previously): • CUSD’s 2023/24 Budget was not approved in June (projected deficit too large, unable to meet minimum level of reserves), a Fiscal Advisor was assigned to CUSD, a new Chief Business Official (CBO) was hired.

• Over 20 vacant positions were not filled for 2023/24 and operating budgets reduced where possible.

• Overall, 3.5 million dollars in budget reductions were identified for 2023-2025—a Revised CUSD Budget was approved in September, with a “negative” designation (indicates the district will not be able to meet its minimum financial obligations in the current and subsequent year)…so much work to still do.

• By December, we saw increases in expenditures (Special Education, operations and more) and decreases in projected revenue (lower COLA from the State = almost one million dollars less, reduced ADA = about $750,000 less than anticipated)…which increased our budget challenges.

• In December, a revised Deficit Elimination Plan was presented outlining a reduction of over 20 positions for 2024/25 (certificated, classified, management), not filling newly created vacancies in 23/24, reducing other budget areas…and we engaged in exploratory dialogue and analysis on potential additional budget cuts (school closures, expanding staffing reductions, etc.). • A freeze on all non-essential spending and hiring was put into place in January.

• As of December/January, we had cash flow projections indicating CUSD would not have enough cash in September/October 2024 to meet payroll/operational needs—making a State/County Takeover an inevitability, based upon the data and information we had, at that time. Updates (as of January-March, 2024):

• In January/February, an option of securing a short-term loan to get CUSD through 24/25 was presented as a possibility, and was being explored.

• Every line item of every district/site budget was analyzed and adjustments were made to reduce budget amounts in many areas, based upon expenditures to date and overall needs.

• In February, an additional nine staff positions were added to the Deficit Elimination Plan and were reduced effective 2024/25 (making it over 50 positions in total, to be reduced between 2023/24 and 2024/25 school years).

• Due to the significant reductions made/to be made and all efforts to analyze/adjust budgets and freeze all non-essential spending, plus other pending actions, we are looking at between 4 million to 5 million dollars in overall budget reductions.

• Due to the hard work done, and difficult decisions made, our cash flow projections as of late March indicate that we now will have sufficient cash flow in September/October 2024…but still face cash shortages in March/April of 2025 (and we still have significant challenges with our current and projected budget deficit to handle, as well as cash flow issues to address in late 2024/25, then in 2025/26).

• If everything falls into place, the need to obtain a short-term loan for 24/25 may not be necessary.

• Negotiations with staff addressing possible salary concessions effective 24/25 are ongoing.

• We continue to work on increasing revenue through better student attendance (and our 23/24 ADA continues to improve at most sites and the district overall), through increasing the identification of students who are socio-economically disadvantaged (through communication to families on the importance of completing/submitting the Educational Benefits Form for 24/25—a form that used to be titled Economic Eligibility Form, used for free/reduced meals eligibility).

• We still face uncertainties with areas outside of our control (a proposed 0% COLA for 24/25, any other changes in the State Budget, increased costs in standard operations and Special Education), which could impact us negatively or positively, and we would have to adjust accordingly. Bottom line: all of the efforts made to reduce expenditures this year and next year, as well as all the internal work done on our current and projected budgets, have us in a better fiscal position now, but it is still a precarious situation we must address.

This is not a surprise, as this was our objective all along. However, the structural deficit in our budget is significant and our cash flow projections still present real concerns in 2025. The challenges are real and the specter of a State/County Takeover still looms (albeit that potential outcome projects to be more of an issue for 2025/26), so the necessity to continue to have the challenging conversations and to make the difficult decisions is our collective reality. We also will continue the deep monitoring, analysis and adjustments of our budget on an ongoing basis. It is sincerely acknowledged that the difficult decisions made have had a profound impact on our staff, as well as our students/families. Navigating this has not been easy for anyone involved, especially those directly impacted by staffing reductions.

For any and all negative impacts experienced, I am sorry. Our mindsets, and efforts, need to continue to be on working collaboratively to maintain our conservative practices and to explore all possible viable options to decrease expenditures and increase our revenue—and protect and support CUSD’s ability to effectively serve and support students, staff and families. Sincerely, Mark Campbell Superintendent Calaveras Unified School District”