The reopening of the Covington School site will help keep enrollment under 500 students at each of the schools in the Los Altos School District, but not without cost.
The district stands to lose about $400,000 in annual revenues when Covington reopens under the district's master facilities plan unless the current tenants can be relocated elsewhere on district property, according to school officials. The district also faces one-time outfitting fees and about $100,000 in annual expenses from operating an additional school.
The Covington site currently houses district offices and is leased out to individual groups. The site could open as the district's seventh elementary school, according to the master facilities plan.
Randy Kenyon, assistant superintendent of business services, presented several scenarios at the regular Dec. 7 board meeting during an interim financial report that projected how the school's opening could affect the district's budget over the next eight years.
If the district continues to lease out the Covington site, according to the report, its reserves from the general obligation fund, used to finance the programs would dip .02 percent below the 3 percent reserve level mandated by state law by 2004-05. The district's reserves are projected to be at 4.82 percent - or with an ending balance of $854,256 - at the end of this school year.
If the district closed Covington in July 1999 and reopened the site as a school in 2000, the start-up fees and income loss would put the district 14.40 percent below the state-mandated reserve levels by 2004-05, according to Kenyon's projections.
Superintendent Marge Gratiot said, "It sounds scarier than it really is. Eight years out is a long way to project with all of the uncertainties. We make year-to-year adjustments."
The projections don't show yearly adjustments or potential parcel tax and state funding increases, she said. Those factors stay flat and the continuation of current programs and class sizes remains constant while potential cost-of-living and enrollment increases are included, according to the projections.
Residents passed a $94.7 million bond last month, which will fund new construction and the reopening of Covington under the master facilities plan. The funds raised through the bond cannot be transferred to the general fund.
Gratiot said the district is currently discussing ways to relocate tenants.
Even with the possible loss in revenues, Gratiot said opening Covington seems to be the best option for the school district in order to keep enrollment down.
Kenyon projected this year's ending balance to be $680,200 - $18,563 less than originally anticipated due to a decrease in enrollment projections and the hiring of additional staff.