A little-used provision in California’s education code has netted San Lorenzo Valley Unified School District more than $1 million per year for the foreseeable future.

Liann Reyes, the district’s chief financial officer, delivered the second interim financial report to the district Wednesday, March 17, and announced to the board of trustees that the district has qualified for special state funding called Basic Aid Supplemental funding.

“We opened up the spreadsheet (from the state) and said, ‘Oh, my gosh, could this really be real?’” Reyes told the board.

The money will help stave off layoffs while California struggles through massive funding cuts to education.

The district became one of only 21 districts in California to qualify for the funding this year because of enrollment.

The vast majority of school districts in California are “revenue limit” districts — property tax revenue does not totally pay for what the district is owed based on its average daily student attendance. The state pays the district the remainder of the cash to make up what each district is owed based on attendance.

In a “basic aid” district, property taxes fully pay for the attendance money the school is owed — enrollment does not net the school any extra money from the state.

This year, the district originally fell into the basic aid category, but the existence of the San Lorenzo Valley Charter School, with about 300 students, made it so the district actually did not qualify as a basic aid district.

Instead, based on detailed attendance figures and a complicated calculation, the district determined through Education Code 47663 that the state would pay districts in this situation.

The net result? More than $1 million in unrestricted money that can be used to keep teachers and programs.

“Every district in the county deserves the same thing,” Superintendent Julie Haff told the board. “Thank goodness we did (get it), but I feel bad for the other districts and the employees who are being laid off.”

Despite the extra $1 million, the district is still projected to spend at a deficit for the next several years as enrollment and daily attendance funding from the state drops.

Unrestricted revenue to the district is predicted to decrease by about $1 million each year through 2011-12 if school expenses remain the same and the economy remains as it is.

This year, the district will have a deficit of about $613,000. In 2010-11, the district will spend $2.1 million from its reserves, and in 2011-12 it will spend roughly $3.4 million from reserves.

If those calculations hold true, by the end of 2011-12 the district will have about $647,000 — a 3 percent reserve, the lowest reserve district policy will allow. And that means more tough financial decisions would have to be made.

“While we can do deficit spending for awhile, we can’t do it forever,” Reyes said.