Standing at a podium in front of the Ravenswood City School District Board of Education and a full room on Thursday night, a consultant hired to review the district's finances delivered dire news: If the district does not cut $3.3 million from its budget, it will face insolvency within a year.
A steady decline in enrollment — down almost 30 percent since the 1999-2000 school year, with projections it will continue in that direction — is the primary culprit for the loss of revenue, the consultant said. Ravenswood, which serves East Palo Alto and eastern Menlo Park residents, relies heavily on state revenue through the Local Control Funding Formula. That funding is distributed based on average daily attendance or the average number of days a student attends school divided by total days of instruction.
If cuts aren't made, the district will have to deal with a $1.7 million deficit next year and $6.4 million the following year.
The district's overall revenues this year total $47.7 million.
Ravenswood received about $31.5 million through the Local Control Funding Formula last year; the amount is down to $30.4 million this year and targeted to drop to $27.6 million next year, according to a report prepared by School Services of California, a financial-management company the district hired to evaluate its budget.
"A lot of times, boards want to know exactly when they'll run out of money, and we're going to tell you: about November of next year," Debbie Fry, director of management consulting services for School Services of California, told the board members.
Thursday's presentation was in sharp contrast to a brief press release the district issued on Tuesday announcing a new "fiscal reform package, part of a continued push to cement the new Ravenswood culture."
"With a combination of spending freezes, controlling hours, and where necessary, reductions, the District has developed a fiscal reform package that saves the district $3.3 million," the release states. "As the District prepares to begin discussions with the City of Menlo Park regarding a Joint Powers Agreement, and the possibility of having to go back out to the ballot box in 2018 for a parcel tax, district officials felt it critical to demonstrate the district’s strength in fiscal management, and equally important, a change in culture when it comes to protecting the district’s resources."
The district hopes the plan will make Ravenswood "an appealing investment partner for outside organizations seeking to make a difference in public education," the release states.
The budget cuts will not impact the students' classroom experience, the district said. But that statement contrasts with proposals from the district's chief business official, which among other items includes potential cuts to special education paraeducators.
On Thursday, Chief Business Official Steven Eichman presented some details of the "fiscal reform" plan for the K-8 school district. He attributed the decline in enrollment to an increasingly high cost of living in the area that's caused families to leave East Palo Alto, and the impact of charter schools (such as KIPP Bay Area Schools, which opened in East Palo Alto this fall, and Priscilla Chan's The Primary School in 2016) and the longtime Voluntary Transfer Program, which allows a number of Ravenswood students to attend neighboring districts, including Palo Alto Unified, through a lottery system.
About 2,700 students are enrolled in Ravenswood this year, down from 3,500 in 2014-15. The district will lose just under $5 million over the next two years as enrollment continues to go down, Eichman estimated.
Despite the drop in students, Ravenswood has maintained healthy staffing levels, Fry said. The district plans to review its staffing ratios, identify areas that are overstaffed and reduce accordingly, Eichman said. Staff reductions will be done through layoff resolutions that will be subject to board approval this spring.
Additional employees and resources that have been allocated over the last 17 years to support the district's compliance with a federal special-educational mandate should be reduced this school year, Eichman said. The district officially exited the federal Ravenswood Self‑Improvement Plan, or RSIP, in August, but given the timing, it started the year "fully staffed as if we were still under the federal mandate," Superintendent Gloria Hernandez-Goff said. This staffing costs the district about $1.4 million.
Other district programs that have a direct impact on the student experience, including special education; nutrition services; the After School Education and Safety program; and the Child Development Center (CDC), will also be reviewed for cuts. "Areas for possible savings" within special education include psychologists, speech services and paraeducators.
Some school board members appeared shocked on Thursday and gave little feedback to staff. Vice President Sharifa Wilson asked that staff create a detailed spreadsheet that lays out all of the district's expenses and funding sources to provide clarity for the public.
She said that "programs that are encroaching on our general fund is the first thing to tackle," before looking at the relationship between enrollment and staffing.
Trustee Marielena Gaona-Mendoza urged staff to look to the district administration for savings.
"We're not going to survive if this keeps going and if we keep getting more people in the administration," she said.
President Ana Maria Pulido asked her fellow trustees to be available for additional special meetings that will likely be needed to address the impending budget crisis.
"I just ask the board to prepare themselves for what's to come," she said.
Ronda White, president of the Ravenswood teachers' union, said in an interview Friday morning that the district has been open about the impending financial crisis in negotiations but had not identified the exact amount of the deficit. Questions from union leadership about specific line items in the budget, such as the high cost to operate the school cafeteria despite the fact that most Ravenswood students are on the state's free-and-reduced lunch program, have gone unanswered, White said. (Eichman said Thursday that the cafeteria is overstaffed compared to the number of students who use it, which is on the decline. Minimum wage for those workers also went up in 2015-16.)
The teachers and classified unions are set to meet with district leadership next week for a special budget-focused negotiation session, White said.
She hopes the district looks to trim what she described as a top-heavy district office rather than teachers or classified staff, such as aides, who work directly with students.
She also attributed the decline in enrollment to gentrification and the emergence of new schools in East Palo Alto, particularly this year. Enrollment dropped sharply this fall by nearly 400 students.
"How do you still give students the services that they need and deserve with this declining enrollment?" White asked. "It becomes a big question that I don't think any of us have an answer to."
Last spring, the teachers' union took a "vote of no confidence" in the superintendent, calling for her immediate resignation. (Hernandez-Goff called it a "publicity stunt" at the time.) White said that concerns about Hernandez-Goff's leadership persist and teachers are "very concerned" about how the district will weather this financial crisis.
The news about the district's budget comes at a time when Ravenswood, a historically embattled district with low student-achievement rates, has been emphasizing its progress toward a new and improved culture. The district opened a standalone middle school this fall in the hopes of better preparing students for high school and college. A $26 million bond approved by voters last summer promises to upgrade aging facilities to keep students "warm, safe and dry." In a new drive toward STEM education, every school in the district now has a makers space.
Staff said Thursday that Ravenswood is launching an outreach campaign to publicize these efforts and recruit families to enroll in the district.
The challenge, Hernandez-Goff said, will be to sustain forward momentum in the face of budget cuts.
"Our goal is to trim all of the fat, but we have to keep essential programs going, and our movement, our progress towards really improving our educational programs that will make us attractive to students and parents in our community," she said.