The school board is expected to discuss a 2019-2020 budget Thursday that includes a 1 percent increase in teacher salaries but district officials are bracing for challenges beyond the next fiscal year.

Jeff Napier, Del Norte Unified School District's assistant superintendent of business, said budget deficits are projected for "at least two of the next three years."

To maintain the services it provides and pay for any new expenditures called for as part of the Local Control Accountability Plan, the district will have to dip into its reserves, Napier said.

"We have some reserves we can use," he said. "The problem is reserves are one-time money. Once you spend them, they don't come back."

Under state requirements, California school districts must maintain a 3 percent budget reserve, which is about eight to nine days of payroll, Napier said. He said economists at the University of California, Los Angeles are projecting slow growth indicating the possibility of a slight recession starting in 2021-22.

However the state has yet to pass its 2019-2020 budget, according to Napier.

"There may be some additional funding in the budget," he said. "I know there's additional special education funding in the budget but we have no idea what that means to us as a district. We'll find that out before the August revise."

Napier said district officials will develop a fiscal stability plan, letting trustees know that the economy is expected to slow down while the cost of utilities and other bills are increasing. Plus, he said, many district employees will see a pay increase through a raise in the salary schedule. Retirement benefits are also increasing, Napier said.

If the district continues to dip into its reserves, Napier said staff may have to explore budget cuts or find different sources of funding.

"We'll come up with a list when we do start having to make cuts, where are those cuts going to be?" Napier said. "If it's teachers, is there an alternate funding supply? If it's for facilities is there additional funding to offset those things? We need to have a plan."

The Del Norte Unified School District Board of Trustees will meet at 4:30 p.m. Thursday at the district office 301 W. Washington Blvd., Crescent City.

The board will also meet as the county Office of Education at 4 p.m. in the same location. Agendas are available at www.delnorte.k12.ca.us.

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