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NEWPORT BEACH : Reserve Fund Covers Shortfall for Schools

The Newport-Mesa Unified School District board this week covered an unexpected $3.6-million shortfall in its 1991-92 budget by transferring money from its reserves to the general fund.

Saying there had been no way to anticipate the deficit that took board members by surprise after they had already approved the budget in June, Supt. John W. Nicoll made an emotional apology for the financial situation.

“It’s a regretful situation,” Nicoll said. “I have apologized for it, and I take full responsibility for it. I regret this transfer of funds was necessary, but it was necessary, and I’m glad we had the funds to do it.”

Nicoll said the district’s property tax revenue was lower than anticipated because of late payments by local landowners. Also, property values in the area were less than the district used for calculating its revenue.

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Every 1% change in property value equals about $600,000 for district, Nicoll said. This year, values fell about 4%, or about $2 million.

To trim expenses, the district has frozen hiring and will not begin new projects and programs.

The board is reviewing other possible cuts in case the situation worsens but does not anticipate losing programs or laying off teachers or staff members.

Unlike most county districts that have been hit hard by state budget cuts in education, the Newport-Mesa district has avoided heavy slashes because it receives most of its money from property tax revenue.

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The district receives only the minimal, constitutionally guaranteed amount of $125 per child from the state.

The board voted unanimously to transfer the money on condition that reserves will be replenished as soon as possible.


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