SANTA BARBARA, Calif. -

Parents packed the Hope Elementary School auditorium on Monday night to hear the Board of Trustees explain a financial crisis.

Board member Tony Winterbaeur said the district has a $386,000 deficit
and is required to set aside 4 percent or $413,000 in a reserve account.

Winterbaeur said that has created a $799,000 deficit.

Board member Chris Gallo said human accounting errors are to blame.

Gallo said they found out about the problem when they ran out of money in July.

The next infusion of property tax funds won't come until December.

Educators explained how some state and Federal funds were cut while Special Education costs went up, but they said those services would still be provided.

Gallo said a manager knew about cuts but didn't implement them.

Board members said they have two options. The first is to close the gap in one year, the second it to find a way to close the budget gap in 2 years.

Tough decisions still have to be made.

Parents in attendance said they are concerned about the shortfall's impact on their children and children's teachers.

"Why didn't we know the costs had gone up," said Amy Schneider.

Teachers attended to meeting, too.

"This came as such a surprise to all of us. We can't understand how management didn't foresee any of this prior to July.  It's put a damper on our feeling at school," said Vieja Valley Elementary School teacher Cindy Busby.

The second grade teacher said she loves her job and will remains optimistic.

"It is tough, but we will get through it, said Busby."

Board members plan to make tough fiscal decisions in the coming months.