Redwood City School District aims for financial recovery 

Redwood City School District leaders faced with an unexpected $2.6 million financial shortfall are developing strategies for patching the hole in the elementary-school district’s 2007-08 budget.

Although $1.8 million was cut from the district’s budget before the school year began, a decline in enrollment cost the district vital funds from the state, district Finance Director Raul Parungao said. Parungao will present a savings plan on Dec. 12 to the school board, which will likely recommend covering the shortfall with money from district reserve funds, Superintendent Jan Christensen said.

Doing so would cut the district’s $4.7 million reserve, used for emergencies, in half and leave it with the minimum required by law. To further complicate matters, district leaders are already bracing for a deficit from California’s anticipated $10 billion shortfall next year, Christensen said.

"We’ve lost 569 students, and a big drop in enrollment means a big drop in revenue," Parungao said. "In any school district, you lose revenue faster than you lose expenditures, so it’s quite a hit."

The Redwood City School District’s revenues this year are estimated to be $76.5 million, while expenses are $79.1 million. Its budget is based on an enrollment number predicted before the school year begins. Enrollment has declined from a high of 9,328 in the 1998-99 school year to 8,646 in the 2006-07 school year, according to the California Department of Education.

The district faced a $3 million shortfall in 2005 and went after a parcel tax that voters rejected in May of that year. The district patched the deficit by pulling money from reserves to preserve the jobs of 57 teachers and retain class-size reduction and other school programs threatened by budget cuts.

Earlier this year, district leaders offered teachers retirement incentives — which resulted in the removal of five teaching positions —and allowed class sizes to rise in the upper grades, Christensen said.

For the longer term, "we’re looking at all areas of our budget to find out if we can find any savings," Christensen said.

Meanwhile, the district has a $5 million surplus in restricted funds that can only be used for specific programs for low-income students, or those learning English, Parungao said.

The Redwood City Education Foundation, an independent nonprofit that has the goal of raising money for the district, aims to raise $350,000 during the school year. However, that money will pay for specific programs, including music education and outdoor learning, foundation President Adam Borison said.

bwinegarner@examiner.com

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