by Mark McDermott
The Manhattan Beach Unified School District has seen its budget change significantly over this summer.
The MBUSD Board of Education earlier this month approved adjustments that reflect unanticipated state revenues, new labor contracts, and an extension of the district’s shared use facilities agreement with the City of Manhattan Beach.
The result is a larger short-term budget gap but a better outlook three years out.
“It’s generally good news that we’re reporting in our budget here,” said Dawnalyn Murakawa-Leopard, MBUSD deputy superintendent, in a presentation to the Board of Education earlier this month.
Budget projections also show, however, that district reserves will be greatly diminished if the $2.6 million Measure MB parcel tax is allowed to elapse, as scheduled, at the end of the next fiscal year.
“We will this year need to contemplate how we’re going to approach that reduction,” said Murakawa-Leopard. “Obviously, we’re going to have to make some choices about that — unless, as with the renewal of the shared use agreement, we can get a renewal of Measure MB, which would alleviate a large portion of the challenges here.”
The State of California’s final budget, adopted in July after MBUSD’s June budget adoption, included smaller reductions in block grants for arts education and pandemic-related learning recovery funding than originally anticipated, adding almost $1.7 million in projected one-time revenues. State lottery funding will also increase by $70,0000 annually. And in July, the district secured a long-term source of revenue with a newly extended facility use agreement with the City of Manhattan Beach that will provide $895,000 annually for local schools for the next ten years. Formerly, the agreement was year-to-year, and then a six-year agreement set to end next year.
“It is forward-thinking,” said Cathey Graves, school board president, at the time the new deal with the City was struck. “This agreement now is for 10 years and gives us confidence in that budget number. You know, we have to go out three years on our budget, so it’s just nice to know that we have that number in place — it just gives us that little bit extra to help protect our teachers and build that budget. So, much appreciated, and thank you to the City.”
Since adopting its budget, the district also reached an agreement with its teachers’ union (see accompanying story). The agreement included a 6 percent salary increase, utilizing the state’s unprecedented 8.2 percent Cost of Living Adjustment (COLA), which applied to the Local Control Funding Formula (LCFF) funds MBUSD receives from the state. But that salary increase, which was also given to other labor groups, was 1 percent higher than anticipated in the budget adopted by the school board in June, adding $2 million in expenses — $1.3 million in one-time monies, and an ongoing annual cost of $670,000 — to the district’s bottom line.
Murakawa-Leopard said the district’s reserve funds set aside for economic uncertainties would likely drop below 5 percent.
“The board policy currently calls for that to be 5 percent, which we are preserving this year but do not anticipate that we’ll be able to preserve for the next two years,” she said. “So it’s likely that we’ll be coming to you to ask for a revision to that board policy.”
School board trustee Jen Fenton, who was co-chair of the citizen’s committee that campaigned on behalf of Measure MB in June 2018, emphasized the intention of the parcel tax.
“When we wrote the parcel tax, it was to attract and retain about 26 teachers,” Fenton said. “And now with rising costs, I think we’re 23ish. The implication is, if we don’t pass the parcel tax, the retaining of 23-some odd positions is then the tough decision [Murakawa-Leopard is] referring to. And I just wanted to correlate that…because it’s a little overwhelming. It’s a little bit of that question mark, and it’s something that we need to consider in all of our budgets.”
A residents group last year attempted to pass a larger parcel tax, Measure A, which would have increased Measure MB’s $225 per parcel tax to $1095 and raised $12 million annually. The tax was rejected by 68 percent of voters. The school board in March began considering an extension of Measure MB with perhaps a smaller increase. Measure MB expires next June. The deadline for a ballot submission to be eligible for the March 2024 ballot is December 8. ER
