At least 40 employees of the Natomas Unified School District will receive layoff notices in two weeks, something the district has tried to avert for the past year by cutting low-enrollment classes and other programs instead.

"Where do you want to shoot yourself – in the left foot or the right foot? We did our best to protect our people and have more adults on campus with our kids," said school board President Teri Burns. "All the research shows that having teachers, having counselors and having custodians, is what is important to kids."

The Natomas district received a letter from the Sacramento County Office of Education this week warning that it is in danger of being given a "negative" financial rating unless at least $5 million is cut immediately.

The district expects it will have to cut a total of $11 million from its $85 million budget by the end of the month.

The fiscal stability of school districts is rated by the viability of their budgets for the current school year as well as two years into the future, according to the county's Superintendent of Schools Dave Gordon. A "negative" opens the door to closer monitoring.

"You basically have me looking over your shoulder and able to cancel actions that could make your situation worse," Gordon said.

Natomas, which schools 10,000 students, was downgraded from a "positive" rating to "qualified" last year when the district prioritized saving jobs over cuts.

As recently as February, the district said a rainy-day reserve of more than $10 million meant that none of the 1,000 employees – about 600 of whom are certified teachers or administrators – would be let go. That money has now been spent.

"With the big cuts, we decided to wait and see what the state was going to do," said board President Burns. "No one expected there to be a 25 percent cut in funding. We didn't expect it to be anywhere near this deep."

At a meeting Wednesday, the board approved $2.9 million in cuts that include increasing second- and third-grade class sizes to 30 students, charging 50 cents more for student meals, scaling back on busing and canceling elementary-level summer school.

Next week, the board will consider closing schools, eliminating athletic programs, moving to a four-day school week, ending almost all busing and instituting furloughs.

Layoffs will be discussed during a June 17 meeting. Salaries constitute 90 percent of the district's budget.

"Instead of eliminating from the bottom, they should eliminate from the top because employees are the ones who keep the place going," said Tom Yee, who has two children in Natomas schools. "If major corporations are cutting from the top, why can't our school district?"

Yee questioned the soundness of the district's general judgment after the $13.3 million purchase in 2007 of 41 acres of farmland that may actually have been worth $2 million. The land was purchased from a different budget than is used for school operations.

"There are too many board members, too many managers," Lee said. "Eliminate those and keep the teachers."

Kim Hendricks agrees with preserving as many jobs as possible.

"Ideally, they need more adults in the classroom and more adults per child," said Hendricks, who has four children in Natomas schools. Three of them attend Bannon Creek Elementary, which is in danger of temporary closure.

"You don't want to see anything cut from the school systems," Hendricks said. "These kids are going to be the ones running the state and making the decisions in the future and I think their education should be more of a priority."

Call The Bee's Gina Kim, (916) 321-1228. The Bee's Kim Minugh and Marcos Breton contributed to this report.