The Newport-Mesa Unified School District is projecting a slight decrease in revenues and rising expenditures in the next fiscal year, according to a budget preview presented Tuesday.
Current projections show the district expects to receive about $326.7 million in revenue and spend about $318.9 million over the 2019-20 fiscal year, which begins July 1. That would be a roughly 0.13% slide in revenue and a 5.91% increase in expenditures from the current year’s projected totals.
About $271.8 million of the district-anticipated expenditures are for teacher and classified staff salaries and benefits. Books and supplies will account for about $14.4 million, down by $260,761 from this year.
“We are challenged … by the expense line,” Jeff Trader, the district’s chief financial officer, told trustees. “When you overlay the expense line, you can see that through [fiscal year] 15-16, [the district’s] doing OK. Through 16-17, you’re doing OK. But, [in] 17-18, we exceeded our revenues. That was a conscious decision because you have about $80 million of facility projects in the oven.”
Other budget difficulties stem from the adoption of two textbooks, rising pension costs, post-employment benefits and declining enrollment.
Trustees did not vote on the budget, which will return for review and adoption on June 25.
Another challenge for the district’s budget is the arrival of the International School for Science and Culture, or ISSAC, which will open in the coming school year. Newport-Mesa originally denied the petition to establish the charter within its boundaries, but the Orange County Board of Education later reversed that decision and approved the school.
In budget documents, the district states that the charter school will be primarily funded by Newport-Mesa taxpayers who will account for students from outside the district who attend ISSAC.
“Our objective here in the 19-20 budget is to stabilize the reserves and to put them back to where they really need to be,” Trader said, adding, “we’re hoping here [in] 18-19 we’re stabilizing a little bit and we want to keep that stable.”
The district expects to end the 2018-19 fiscal year with about $34.4 million in reserves, according to budget documents.