Building trust between our school district and the Pleasanton community

I was surprised to see the school district reinstate programs at its June 3 board meeting. After all, through the winter and spring, budget projections from the state’s Legislative Analyst down to the school district’s assistant superintendent for budget services were grim. The budget projections in past years (2009-2010 and 2010-2011) have been almost as negative (though 2011-2012 was supposed to be worse). Many community members, including myself, worked hard to pass measure E — which was described as a partial solution, but not a big enough parcel tax to solve all our budget problems — and yet we were unsuccessful. So the idea that the district could reverse budget cuts before the state budget is finalized was surprising.

Why could the district reverse February’s budget cuts in June?

  1. the state economy is improving, with an additional $3 billion in state revenue expected between July and December, as compared with the projections that Governor Brown’s January budget proposal was based on.
  2. the school district had budgeted conservatively in February, assuming that state tax extensions would not get on the ballot and that the measure E parcel tax would fail.

Could anyone have predicted in February that the economy would be doing so much better by May? Perhaps, and if they were smart, they invested in the stock market based on that prediction. However, I do not believe it would have been fiscally responsible for the school district to assume that they might see additional revenues from the state that no one else was predicting would occur.

Could the school district have managed its budget challenges even more conservatively? The school district could have attempted to impose a hard salary cap and cuts to the salary schedule, while preserving existing programs. However, I believe the teachers’ union and the classified employees’ union would have put up a big fight, and I do not believe that a mediator would rule in favor of the school district.

Alternative explanations

However, some might not be surprised that the budget predictions now are rosier than they were in January. There is a vocal minority in Pleasanton who think the school district was just crying wolf and the budget problems could be easily surmounted without a parcel tax (or tax extensions at the state level). In a new post, The Armageddon That Wasn’t, a representative of the PEVC writes

“The PUSD Armageddon-that-wasn’t along with the CA state budget theatrics was messaged/timed to condition voters to extend the temporary state tax increases and to heighten Pleasanton voter angst to impose a new parcel tax.
Why should voters trust either PUSD or its union leaders to give an honest accounting (or prediction) of the district’s fiscal health? And should we trust those who claim that failed parcel taxes will destroy housing prices?”
The distrust described in the blog post boils down to three beliefs:
  • the school district is in the pocket of the Association of Pleasanton Teachers (a union local of the California Teachers Association which represents Pleasanton teachers at the bargaining table);
  • the school district leaders don’t give an honest account of the district’s future budget challenges, with the intent of misleading voters to pass higher taxes;
  • pro-parcel tax campaigners try to frighten voters with the potential of lower property values if a parcel tax does not pass.
The fact that so many people voted against measure E indicates that people find at least one of those assertions believable. Let me address them in reverse order.

Why do people believe that parcel taxes and property tax values are unrelated?
Because so many other factors affect property tax values that in many cases the impact of parcel taxes is undetectable. I never thought this was a strong argument in favor of a parcel tax, and I wish that supporters of the school district would stop using it. It distracts from much more significant benefits of investing in our local schools.

Why do people believe that district leaders misled the public about the district’s financial challenges?

There are two possible explanations for this belief. The first is that people are aware of a history of financial decisions about bond refinancing made between 2003 and 2005, and which some have challenged as illegal and inappropriate uses of public money. Measure B was passed in March, 1997, and approved $69.8 million in debt financing for school building and remodeling projects. Between 2003 and 2005, the district made about $6.3 million in cash refinancing. There were three effects of the refinancing. First, the interest rates on the remaining debt were reduced. Second, additional fees were paid to the companies that helped the district implement the refinancing. Third, the cash generated by refinancing was not used to reduce the principal on the bond, but instead, was used for additional building and remodeling projects. Those who challenge these actions also believe that the oversight committee for the use of measure B funds should continue to meet even after all the funds have been spent, to ensure that the district is repaying the principal on these loans in a way that minimizes the total interest paid and the costs of companies that advise the district on how to pay down these loans.
More information about measure B funds and how they were used is available through the school district on its Measure B page. There is currently a citizens committee meeting with an outside company to review the use of bond funds and cash out refinancing. From the school district home page:
“The District has engaged Government Financial Strategies (GFS), an independent company, to conduct a review of these financing transactions and report to the Board on Tuesday, June 21, regarding the results of these financings.As part of this process, PUSD has invited a committee of local citizens to participate in this review of the District’s activities related to the refunding of bonds. The committee will meet twice–on Monday, June 13, and Monday June 20, from 5 to 7 p.m. at the PUSD District Offices (meetings are open to the public). Committee members are: Beth Limesand (chair); Kay Ayala; Jan Batcheller; Jack Dove; Anne Fox; Kathleen Ruegsegger; and Julie Testa. The committee is charged with assisting GFS in completing its scope of work by providing thoughtful input to the work in progress and reviewing preliminary findings. It is hoped that, by these efforts, the report to the Board will be helpful in terms of transparency, fiscal accountability, and implementing best practices in the areas of debt management and debt issuance.Follow the links for the June 14 overview from GFF and an updated scope of work.”
I look forward to hearing the outcome of the citizens’ committee review. Since I did not live in Pleasanton during the time in question, but I do still pay property tax toward the measure B bonds, it will be reassuring to get all these issues out on the table to be reviewed in a transparent way.

That’s the past, but what about the future? Why do people believe that district leaders are misleading the public about the district’s future financial challenges?

The roller coaster of the past several years has made Californians cynical about budget cuts that seem at first horrific, but then never materialize in the dramatic form that is predicted. More about this in a separate post.

Why do people believe that the school district and the APT are too closely allied?

Because the last time the union went on strike against the school district was in 1986. People believe that because both sides describe the relationship between the union and the district as respectful and productive, that means that the school district is not pushing the union hard enough for concessions.
In particular, some people believe that the district should be pushing for permanent reductions in salary for teachers, rather than annually negotiated furlough days, which reduce take-home pay for teachers in that year, but do not reset personnel costs over the years that follow.

Readers will have to decide for themselves whether to trust the school district about financial issues. I believe that Superintendent Ahmadi and Assistant Superintendent Cazares are of high integrity and tell the truth about the district’s finances. The roller coaster of dire budget predictions followed by reprieves is a function of the state legislature’s actions and not of the school district’s leadership. Until that roller coaster in Sacramento is replaced by a more sane budgeting process, our school district has to make the best of a bad system.


About Sandy Piderit

parent, education advocate, and professor

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