Modesto City Schools received full approval of its $253.8 million budget Tuesday, clearing a county watch list that flagged concerns with its spending plan in September.
"It's good news, but it's still a difficult task to get us ready" for next year, Superintendent Arturo Flores said. The district faces at least $15 million in cuts for the next school year, which likely will include layoffs and closing schools.
The district's budget was taken off the Stanislaus County Office of Education's "conditional approval" list Tuesday.
County officials said they were satisfied with new estimates that show the district holding on to more cash than it anticipated and the creation of a budget advisory committee.
Still, those same officials cited more concerns in a letter Tuesday to Flores.
County Assistant Superintendent of Business Don Gatti warned that $15 million is the minimum that district officials should consider cutting for the next school year.
"We note the $15 million is likely a baseline and that additional cuts may need to be enacted if the district's financial condition worsens in the immediate future," Gatti wrote. He was out of the office this week and could not be reached for further comment.
Modesto City Schools Board of Trustees President Steve Grenbeaux described the removal from the conditional approval list as "vindication."
"We've got to be proactive. We've got to look long term," he said, noting more spending cuts would come in 2011-12.
For the short term, officials are looking at reducing employees and reorganizing the district office, Grenbeaux said.
Modesto City Schools closed its 2008-09 budget with $12 million in cash on hand — $19 million more than it expected as recently as June, when it had anticipated a $7 million deficit. A boost from federal stimulus money and a more generous infusion of state cash than the district expected bolstered the bottom line.
The district intends to extend its hiring and spending freeze this school year.
The district's budget was one of five flagged this summer with conditional approval by the county office of education, which oversees the districts' finances and has authority to suggest budget-balancing solutions. The other districts designated with conditional approval were Sylvan Union, Keyes, Roberts Ferry and La Grange; Sylvan also has been removed.
County officials were concerned with districts' deficit spending, drops in savings and declining student enrollment.
Tagging districts with conditional approval is rare in Stanislaus County, where no more than two previously have been on the list at once.