It wasn’t a welcome surprise. On February 25 Tahoe Truckee Unified received notice that it owes an unforeseen $1.2 million to the Nevada County Office of Education. The resulting scramble has become a lesson in the finer points of administering a basic aid district.
In December, staff members of the Nevada County Office of Education were in the process of tallying up student attendance, and the corresponding funding due them from the state, when they realized the numbers didn’t add up. An inquiry to the California Department of Education revealed that a chunk of charter school money the county had expected to receive from the state would actually be coming out of Tahoe Truckee Unified School District. Two sections of the California Education code overlooked by TTUSD and the Nevada County Office of Education indicate that as a basic aid district, TTUSD is fiscally responsible for the 226 children who live within its boundaries but attend charter schools.
‘It came as a huge shock. We just kind of went into a tailspin here because $1.2 million is a lot of money,’ said assistant superintendent Jo Wilson. ‘We didn’t know about this obscure ed code that basically says that because we’re basic aid our money has to follow these students.’
The money will come out of the district’s general fund, which contains roughly $46 million this year. TTUSD had already been working to adjust to a 6.5 percent cut in state funding.
Julia Locatelli, fiscal director of Nevada County Office of Education explained that the financial staff in her office was also caught unaware.
‘It was when we began reporting our attendance in December that…we discovered the piece of legislation that said some of our charter school funding was going to come from basic aid districts,’ she said. ‘This is all new to us. We’re sort of learning how the state is applying (charter school) funding.’
The staff in Nevada County has only recently begun sponsoring charter schools that enroll students from basic aid districts. Last spring, Twin Ridges Home Study and Forest Charter School decided to form a ‘cooperative’ with four other charter institutions, and to do so they needed sponsorship from the county. Previously, the schools had been sponsored by the nearby Twin Ridges Elementary District.
‘It was a much more efficient business center that we were going to create through the sponsorship of the county,’ said Sandy McDivitt, Executive Director of Forest Charter. ‘County sponsorship is much more advantageous in terms of being able to tap into resources that are provided by the county.’
Together, Forest Charter and Twin Ridges enroll the 226 students for which TTUSD is responsible. Both are based in Nevada City but operate satellite facilities in Truckee.
According to Locatelli, the Nevada County Office of Education agreed to sponsor the two schools June 1 of last summer.
Wilson explained that all of this happened unbeknownst to the administrators and staff of Tahoe Truckee Unified.
‘We didn’t know anything about Nevada County chartering these schools,’ she said, ‘Frankly we were shocked to find out that we had 226 local kids enrolled in the charter schools because (the charter schools) don’t have to let us know when they enroll.’
Since receiving notice of the expense, Tahoe Truckee Unified has been looking for a way to defer the payment, or to escape it completely through a waiver from the state. According to Wilson, district administrators have been meeting with legal counsel in hopes of leveraging the fact that TTUSD was not notified of, or included in, Nevada County’s decision to sponsor the schools.
‘We’ve got legal services working to see if there’s any way we can get around it,’ Wilson said. ‘We are hoping we can look into a negotiated payment plan or settlement. (It would be) kind of a ’no fault‘ response, a ‘can we get some help here?’’
The district has also objected to the timing of the notice, stating that when Nevada County notified TTUSD of the obligation, the district’s ability to respond was limited by time constraints. Tightening the budget would typically involve ‘reductions in force’ – laying off teachers – but the district must complete a multi-step process before it can do so, and must complete that process by March 15. When the notice arrived on February 25 too few days remained.
However, in Locatelli’s view, TTUSD’s chances of receiving a waiver from the state are slim.
‘Basic aid districts are the richest districts throughout the state,’ she said. ‘So for (TTUSD) to go to the state and say, ‘Please don’t make us pay this’ – on what grounds would (TTUSD) do that?’
As for a deferred payment plan, Locatelli stated the decision would not be hers to make, but did explain that any such strategy would boil down to a loan from the Nevada County Office of Education to TTUSD.
‘It would be up to our county superintendent to make the determination of whether or not we can afford to (forego) over a million dollars in revenue,’ Locatelli said. ‘We need to educate these kids and we’re depending on that money.’
TTUSD hasn’t received an invoice in the mail yet, but anticipates its arrival before the end of the school year.
‘It’s showing up in the state allocation figures,’ Wilson said. ‘It’s looking like we’re liable for that money.’
Local Teachers’ Union Takes a Hit
The Potential Effects
During the 2005/06 school year TTUSD spent roughly $6,100 of its general fund on each pupil. The corresponding state average was about $5,300. But nonetheless, the $1.2 million request from Nevada County will prod the district in a tender spot.
For most school districts, general-purpose dollars are tied to student attendance. California mandates that districts across the state should receive a consistent amount of general-purpose money for each of their students. Most districts use property tax revenue to get as close to that mark as they can, and then the state steps in and tops off the tank to ensure that each district receives the designated per-student amount.
In basic aid districts, funding does not arrive on a per-student basis. Instead it rolls in as a lump of property taxes that provides the students with more funding than they would otherwise receive through the state allocation. Basic aid districts receive no general purpose funding from the state.
Under this system most districts benefit from increasing enrollment, but basic aid districts do not. When more students enroll in a basic aid district, the district ends up having to provide more service with the same amount of money.
A similar situation arose when Nevada County notified TTUSD it would be responsible for more students. TTUSD isn’t suddenly educating 226 extra kids, but has been asked to pay someone else to do so.
‘This is exactly why basic aid districts are so at risk even though everybody looks at them and says, ’Oh, you’re so lucky you’ve got all this money,’’ Wilson said.
In general, basic aid districts attempt to maintain funding reserves to protect against fluctuations in expenses and property values. TTUSD, which became a basic aid district in 2003, has been working to build such a reserve but has not yet established one large enough to mitigate the impact of the unforeseen $1.2 million expense.
That expense has also caused a hiccough in the ongoing salary negotiations between the district and the teachers’ union. When the district learned of its obligation to the charter students it was in the midst of offering the teachers a three percent salary increase. District administrators withdrew the offer out of concern they would no longer be able to honor it. The teachers had been asking for 12 percent.
