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The Old Adobe Union School District is making plans in the event that a worst-case scenario develops in which it becomes insolvent.
“If the state tax extension doesn't pass and there is no new revenue, the district could become insolvent by the 2014-2015 school year,” said Andi Stubbs, Old Adobe's director of business services.
So, at its March 10 meeting, the Old Adobe Board of Trustees instructed staff members to work on a worst-case scenario budget in which the district goes bankrupt. The district could be faced with addressing a deficit of $1 million in upcoming budgets.
California's public school districts are required to keep an emergency reserve fund equal to 3 percent of the general fund. If expenses continue to exceed revenues, the Old Adobe district might be able to maintain this reserve for only three more years, Stubbs said.
“And if a school district can't make the minimum reserve required or its financial obligations, a state official comes to assist it and help it to get out of its financial situation,” Stubbs said.
The district also is planning a best-case scenario budget in which the tax initiative is extended. The measure currently needs two more Republican votes in both the Senate and Assembly to be put on a ballot, and then would need to be passed by voters.
To address a potential loss in state funding, Old Adobe board members unanimously voted at the March 10 meeting to send layoff notices affecting the equivalent of 15.2 full-time teaching positions, but might not need to actually lay off that many positions if the tax extension passes, Stubbs said
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