The ripple effect of the COVID-19 pandemic continues to impact public education across California.

First, it pushed students and teachers out of their classrooms and into distance-learning mode for the final two months of the school year. That was an important and necessary effort to slow the spread of the virus.

Now, COVID is affecting the financial capacity of districts to keep programming where it was before the crisis hit. That’s because state revenue has plunged during the pandemic with many businesses temporarily shuttered and tax receipts drying up. That directly hits education funding, which Gov. Newsome proposed to slash by $15 billion in his 2020-21 budget revision released in May.

Thursday night, Denair Unified School District trustees learned just what that potential cut means to their four campuses as they approved a bare-bones $14,539,016 budget for the fiscal year that begins July 1. By comparison, this year’s budget was $15,344,091. About 80% of the district’s budget is dependent upon state funding.

“This is no normal year. And this is no ordinary May revision,” said Linda Covello, the district’s chief business official.

The governor and the Legislature still must negotiate a final state budget before the end of June. Many Democratic lawmakers already have indicated they will seek more money for schools. Still, everyone expects the next 12 months to be austere.

For Denair, that means once again tightening its financial belt and dipping into precious reserves. Covello said the state already has deferred money that normally would have been sent to schools in June. She expects the state to repay those funds by August or September.

Meanwhile, Denair and other districts still have bills to pay. Minutes after trustees passed the 2020-21 budget Thursday night, they also approved a resolution authorizing Covello to temporarily transfer money from restricted funds devoted to operations, child development, cafeteria, building, capital facilities, bond service and debt service to meet payroll and other obligations.

“In order to cover June expenses, we’ll have to borrow from those other funds,” Covello explained. “We’ll pay it back by September when the cash is received from the state.”

Much of the state funding to the district is based on enrollment and attendance. Out of an “abundance of caution,” Covello conservatively projected enrollment to be flat in the next year. That way, she said, if more students arrive in August than expected, the budget situation only will improve.

The next budget also projects true deficit spending for the first time since the district was in financial peril six years ago. While the situation is not the same today, with state funding slashed because of the pandemic, Denair expects to spend about $151,000 more than it receives next year.

And, unless enrollment dramatically increases or state funding is fully restored, deficit spending is projected for at least two more years, Covello told trustees.

Covello said every area will be scrutinized for potential savings, but with more than 80% of the district’s budget devoted to salary and benefits, there are limits to what can be cut without impacting personnel. She said any potential cuts would be discussed publicly with community members and other stakeholder groups “so their priorities are represented.”

“If our revenues go up, our deficit spending will be less,” Covello said. “This budget will probably change again.”

Training and out of town travel certainly will be affected, among other areas. Superintendent Terry Metzger said more virtual training might be an affordable option.

Trustee Ray Prock Jr. encouraged district officials to watch every dime. “Any dollar we can save this year will be compounded and worth more in the future,” he said.

“We’ll look at everything,” Metzger said about reducing expenses.

In other action Thursday, the board:

• Approved a new contract with the Denair Unified Teachers Association that includes a 1% salary increase for its members. It is the same raise already given to non-teachers represented by the California State Employees Association. Confidential, management and administrative employees also were granted a 1% salary increase Thursday.
• Agreed to apply for a $1,812,660 Career Technical Education (CTE) Facilities Program grant from the state to help build a new ag education center at Denair High School. The district would be responsible for the other half of the estimated $3,625,320 project through restricted funding sources. Among other things, the proposed 112,500-square-foot addition would include six indoor classrooms and one outdoor classroom to serve more than 200 students a year. The project is focused on the following CTE pathways: plant and soil science, animal science and agriculture mechanics.
• Listened to a brief update from Metzger about the COVID-19 situation. She said she is part of a working group that includes Stanislaus County health officials and other school superintendents. No decisions have been made about how schools will reopen in August, Metzger said. They expect to have more direction by the end of June about the status of fall sports. She said there also is concern about how the many recent public protests over policing and racial inequality may impact the spread of the virus.
• Heard a report from Metzger and Jeffrey Lewis, CEO of Legacy Health Endowment of Turlock, about mental health services in the district. Metzger said the district’s partnership with LHE has “significantly contributed to our ability to serve the mental health needs of our students.” In addition to the district’s own academic and social emotional counselors, Legacy Health provides funding for full- and part-time mental health clinicians. Metzger said many students face issues with anger management, depression, conflict resolution, grief and sadness, drugs and alcohol, low self esteem and even thoughts of suicide. Help also is available, she said, for Denair staff members affected by Secondary Traumatic Stress, sometimes called compassion fatigue.
• Approved a three-year contract extension for Covello.
• OK’d agreements with St. Augustine University and Brandman University to provide interns for e district professionals to mentor. St. Augustine will send a speech language pathologist student to train under Suzie Ramirez, the special education director. Brandman will place a young teacher in a classroom to be mentored by a Denair instructor.