Once on the brink of a state takeover due to its financial difficulties, the Paso Robles school district is now on a path to fiscal stability, the county schools superintendent said Thursday, though he added that the situation is still “very fragile.”
After reviewing the district’s first interim financial report for 2012-13, San Luis Obispo County Superintendent of Schools Julian Crocker upgraded the district’s “negative” certification to “qualified,” the middle of three possible certifications.
“They’ve done a good job in the last 12 months in turning this situation in the right direction,” Crocker said.
The district’s troubles were first publicized in December 2011, when the board submitted a negative certification, saying it might not have the 1 percent reserve fund required by the state at the end of the school year. That’s when Crocker and the San Luis Obispo County Office of Education stepped in to help, providing oversight and guidance.
“They were literally on the brink of asking the state for a loan,” Crocker said.
Had that happened, the district would have lost local control of its schools. Instead, it began making cuts to the budget, which included 12 furlough days for all staff. As a result, the budget reserves increased from 0.45 percent to 5.4 percent.
Meanwhile, the Paso Robles district met two other concerns Crocker had noted: It discontinued deficit spending for the next two years, and it took steps to address its fiscal health for the future.
Yet, Crocker said, relying on furlough days to build the reserve is not desirable. In a letter to the school board, he wrote, “Much of the fiscal stability has been achieved through significant expenditure reductions, primarily by instituting 12 furlough days for all staff, which has also resulted in fewer instructional days for students. Although necessary in the short-term, this practice is not desirable or recommended for the long-term.”
A “positive” certification — the best scenario — will not be possible until those furlough days are eliminated, he said.
Crocker said he will continue to assign a fiscal adviser to the district through June 30.
Neither Paso schools superintendent Kathleen McNamara or school board president Katy Griffin could be reached for comment Thursday.
It’s too early for school districts to see how the passage of Proposition 30 — which will raise taxes on the wealthy to add to school funding — will impact their budgets, Crocker said, but he is optimistic.
“The last five years we’ve been in a house that’s been burning very slowly,” he said. “What Prop. 30 did was put the fire out.”