WATSONVILLE — The Pajaro Valley Unified School District Board of Trustees on Wednesday approved the district’s first interim budget report, which is a required review of how the three-year budget adopted in June is playing out through Oct. 31.
The report’s “positive” certification means that the district can pay its bills for the next three years.
By law, all districts must submit their first interim report by Dec. 15.
Despite the positive certification, the district is deficit spending this year by just over $13 million. That is largely due to upcoming maintenance costs, and to a one-time $3,200 payment offered to classified employees and teachers in lieu of a raise.
The classified employees, represented by California School Employees Association, accepted the offer in November.
Teachers are still negotiating their contract, and the deficit spending number will change if teachers reject the offer.
Next year, the district will be deficit spending $8 million in the 2018-19 fiscal year, and $8.2 million the year after that.
In addition, the district is facing rising retirement costs, from $13.4 million this year to $17 million in the 2019-20 fiscal year.
District officials have pointed to these financial uncertainties when explaining why PVUSD must be fiscally conservative.
“Our budget today is closer to the bone than it ever has been before,” Trustee Kim De Serpa said.
The teacher’s union, meanwhile, says that the district often understates its ending fund balance and needlessly keeps its reserves high instead of using them for salary increases.
Last year, for example, an estimated $19 million balance grew to $57 million by the end of the year.
“It’s the same pattern for the last eight years,” Pajaro Valley Federation of Teachers President Francisco Rodriguez said. “(They say) ‘The sky is falling,’ then show a large reserve.”
