WVUSD Says Furlough Days or Layoffs Needed to Close Budget Gap

Whether Walnut Valley Unified eases its fiscal woes through negotiated furlough days with its employees or layoffs, the district must have a balanced budget by June.

That was the message Tuesday night at a budget presentation Superintendent Dean Conklin and several board members hosted at Diamond Bar High School.  A second community meeting is set for 6 p.m. Thursday at Walnut High.

About 40 people attended Tuesday’s meeting, in which district administrators outlined how Walnut Unified is facing a $4.2 million deficit for the 2013-14 school year.  The shortfall is estimated at close to $11.5 million for 2014-15 if the district does not take action to close the gap.

“We have to do something,” Conklin said.  “And the challenge is do we reduce the number of days or do we reduce the number of employees?  There’s not a third option. We’ve already dimmed the lights as much as possible.”

On Dec. 5, the district submitted what is called a negative certification with the Los Angeles County Office of Education.  A negative certification means that a district will be unable to meet its financial obligations for the current year and the two subsequent fiscal years.

Conklin said Tuesday the district is in the black this year but in the red for the next two years.

The Los Angeles County Office of Education has provided an advisor for the district who audited the books and found no misuse of funds or hidden money that can be tapped, he said.

Walnut Valley Unified is grappling with a structural deficit problem.  Years of deficit spending, largely due to the district getting less money from the state each year while costs to operate increase, have caught up with Walnut Valley, officials said.

Jeanette Ullrich, the district’s assistant superintendent of business services, said the main reason for the deficit is that the district has been getting less money from the state each year than was promised.

The state owes the district money under its Proposition 98 funding formula, including $21 million for 2013-14 alone, but those funds have been deferred.

“The state because of the deficit factor is only funding us 78 cents on the dollar,” she said. “And the last time we as a district, or any other district in California, was fully funded was 2007-08.”

Conklin said health insurance costs go up every year, as does what the district pays employees due to salary step and column increases, adding that 90 percent of the budget is people.

The superintendent has proposed that employees take six furlough days this year and nine for the subsequent two years. However, the Walnut Valley Educators’ Association, which represents the teachers and other certificated employees, has called furlough days a temporary fix for a problem needing a long-term solution.

The disagreement related to furlough days, which must be negotiated with WVEA, prompted to district to bring in a mediator after talks stalled.

“What the district has done is asked to go through the impasse process because of its inability to solve the deficit (issue),” WVEA President Larry Taylor said last month.  “We’re willing to work with them, but we’re concerned with the impact of furlough days on the students.”

Conklin said that other districts have asked for and received as many as 20 furlough days. The district asked for furlough days last year and the teacher’s union said no, he added.

The district’s reserves have been shrinking since 2007-08, as a result of not being able to keep up with growing costs.  In 2010-11, the Walnut Valley got an influx of funds from the federal government in the form of $8.2 million in stimulus money, but expect to be out of reserves by the end of this year.  The district is required to have a 3 percent reserve.

This is a problem the district has been working on for years, said Board President Helen Hall. 

The state previously enabled the district to use land money to avoid layoffs and some program cuts, but that is no longer allowed, Hall said.

“We have been working with the unions to try to solve this problem,” she said. “And so when you run out of one time money and the state says you can’t do that anymore, then you’re going to you have to deal with reality. And the reality is we have to deal with the structured deficit that’s in the budget.”

Board Member Cindy Ruiz said the district has made cuts to athletic and music programs in the past few years and has made it public that the district is struggling financially.  She urged residents to push the state legislators to fund schools equally, adding that surrounding districts get more money because they have more students receiving free and reduced lunch or struggling academically.

“Probably the most frustrating part is we get less money in our district than our surrounding districts right out the back,” she said. “Is it fair? Absolutely not. Why should we get less money because we perform better, because we are an upper middle class district?”

WVUSD COMMUNITY BUDGET PRESENTATION

Walnut High School - Performing Arts Center/Theater, 400 N. Pierre Road

Date: Thursday, Jan. 24

Time: 6 p.m.