• We have experienced unprecedented enrollment growth in the last five years.  Kindergarten enrollment for 2009-10 is at its highest level ever.  We are graduating 218 8^th graders and welcoming 400 kindergartners!  Anticipating growth of nearly 200 students per year going forward until 2012-13 is the equivalent of adding an entire middle school.
• As a Basic Aid district we are funded based on property taxes, not on a per student basis like most California school districts.  Therefore, there is no corresponding increase in revenue to cover high enrollment growth.
• Our soaring enrollment has put a strain on facilities and our financial resources as we must add teachers, aides, classroom spaces, furniture and equipment, custodial services, etc.

Why?  The State Budget Factor

• Even though less than ten percent of our general fund comes from state funding, reductions as a result of the recently approved State Budget Act amount to over  $140,000 for 2008-09 and 2009-10.  These reductions are primarily in funding for our staff development days, instructional aides, and adopted textbook instructional materials.
• Deferrals of payments by the State to our District have resulted in losing over $50,000 in interest earnings.  These deferrals are expected to continue well into the 2009-2010 school year.  Through financial planning, we have protected our cash flow, but as deferrals drag on, this will be a growing concern.

Why?  The Property Tax Factor 

• Property tax increases, another key driver in Basic Aid Districts, are expected to decline at a fast pace.  For fiscal year 2006-07, the property tax increase was 8.3%. The projection from the County for 2009-10 is only 3.0%. 
• Because the majority of our general fund comes by way of local property taxes, the slumping housing market and regional economy are cause for concern and require even more rigorous financial planning. 

Why?   The Economic Uncertainty Factor

• Our strategic fundraising  partners (Kiddo! and PTAs) face uncertainty in their ability to continue to contribute over $2 million annually to the District.
• The State now faces a newly projected $8 billion additional deficit that will need correction.   We will not know for some time how this will effect school funding.

How will we respond to all this uncertainty and growth?  Continue to be fiscally prudent! 

• In the short term, we will implement the K-3 Class Size Reduction flexibility measures allowed by the State.  Currently most Kindergarten classes are staffed at 20 students to 1 teacher.  For the 2009-10 school year all Kindergartens will be staffed at 24 students to 1 teacher.  This will save us over $750,000 in staffing costs and facility expenditures and allows us to physically accommodate our projected 400 kindergarten students next year.  Even with these measures we will need to add three classes and teachers at a cost of close to $300,000 to keep up with enrollment growth.
• Maintain a reasonable reserve to guard against further economic uncertainty.
• Make our continued priority to avoid teacher and support staff layoffs.
• Continue to look for reductions in our expenses. 
• Continue the financial best practices offered in collaboration with CFAC, utilizing their long-term fiscal model.  It helped the District see what was coming prior to the parcel tax measure and will continue to be an effective tool as we move into the uncharted waters of this economic recession and unprecedented enrollment boom.

The District will continue to invest in the future and in its strategic goals to include:

• Recruit and retain excellent teachers.
• Invest in their professional development - the single best determiner of quality instruction.
• Maintain a reasonable reserve that guards against fiscal uncertainty.
• Keep competitive compensation as a high priority.
• Keep pace with enrollment growth by not only hiring additional teachers, but by making sure the great support staff are in place as we continue to grow.
• Continue to advance technology and its integration throughout the District.
• Complete and implement a facilities master plan that will provide an excellent physical learning environment for students.  Our schools and facilities should be great sources of pride and great places for kids, staff, parents and community involvement.

These are unprecedented times of fiscal challenge across California.  While our situation is better than most school districts, these are challenging times for us too.  I hope you see we have our own unique set of challenges.  We also won't forget the opportunities we have because of our supportive community, excellent staff, and extraordinary kids.  There are high expectations in Mill Valley, a significant factor in why I enjoy working and living here.  We will continue to deliver on those expectations; and we will continue to involve you in making those expectations a reality for our community's children.  Please stay informed, engaged, and involved.

Sincerely,
 
Ken Benny