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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.


Cuts rescinded, programs saved in Pleasanton schools

The special board meeting yesterday (June 3) was well attended by parents, teachers and staff. Several spoke in favor of restoring class sizes in grades K-3, PE specialists in the elementary schools, reading specialists and the Barton specialist, and counselors.

Parents and students also advocated for expanded course offerings in the high schools, and obtained a partial victory when the board amended cabinet’s recommendation and added $50,000 for each comprehensive high school to use to open additional sections so that more high school students will be able to include seven subjects in their high school schedule for next fall.

The archived webcast of the meeting is available online. I attended the portion of the meeting from 4:30 till 6 pm, but the vote was not finalized until about 7 pm. After I’ve had a chance to review the rest of the webcast, I will post an expanded summary of the meeting, with my commentary.

There is also a summary article up at the Pleasanton Patch.

PUSD board to meet Friday June 3

See update below…

A new agenda has been posted for a special meeting of the Pleasanton Unified School District on Friday, June 3, at 2 pm. (PDF)

There are four items on the agenda…

  1. a board workshop on “relevant skills needed for collaboration as a board and with members of the governance team”, from 2-4 pm
  2. closed session (conference with the labor negotiator, and public employee appointment)
  3. report, discussion and possible action to approve modification to actions the board took on February 22, 2011
  4. report, discussion and possible action to approve the personnel document
I am heartened to learn that the board is continuing to develop collaboration skills. With a new superintendent hired last summer, two new board members elected last fall, and key policy and budgetary decisions ahead, taking time to talk about how to best work together is a wise investment.
I am curious about the potential for modifications to the February 22 list of possible budget solutions (PDF). Will this agenda item simply take action on the CSEA concessions, removing some staff positions from the cut list, or will there be a more substantive discussion of prioritizing items to bring back, if the state legislature actually manages to pass a budget on time for FY 2011-12?

UPDATE, Thursday, June 2:

I just learned via the Mohr PTA page on Facebook some details for the modifications being considered to the February 22 list of budget cuts.

At the Special Board Meeting scheduled for this Friday, June 3, Cabinet will recommend restoring the following programs for 2011/12:

.5 reading specialists at 9 elementary sites and .5 Barton ($400,000)
Physical education sections at elementary schools ($400,000)
Maintain 25:1 in grades K-3 ($1,300,000)
Counseling ($200,000)

It is anticipated that this issue will be addressed at approximately 4:30 p.m. on June 3.

I’m surprised to hear that these decisions might be finalized before the Sacramento legislature and Governor Brown finalize a state budget. Nevertheless, I’m delighted to hear that the school district might be able to bring back some of these programs!

I had especially advocated that reading specialists and the Barton specialists not see reduced work hours, because I believe that the services they provide are so essential. These staff members provide extra small group and one-on-one tutoring to any students who are not yet reading proficiently at their grade level. (In the Barton program, one specialist and one classified staff member support the work of more than a hundred volunteers who actually do the tutoring. I’m a volunteer tutor.)

If the board approves these recommendations, then the only items that remain on the list from February 22 would be:

  • grade 9 class size reduction in English and Math
  • three furlough days for management employees
  • securing funds from the Regional Occupational Program
  • securing funds from Categorical Programs (including summer school, adult education, TVIP for new teachers, and the Peer Assistance and Review program)
  • securing funds from Kids Club
  • eliminating the Health Services liaison position
  • reducing site and district office classified support positions
Those last two bullet points are probably also coming off the list, because of the way that concessions were negotiated with the Classified School Employees Association earlier this spring, but I’m not sure that’s a completely done deal yet.

Making sense of the Governor’s budget plan

Headlines can be so confusing. Here are some headlines from the past 24 hours, talking about Governor Brown’s most recent budget proposal for 2011-2012 (the “May Revise”):

Notice how the first two headlines emphasize a lower deficit, and the other four emphasize increased taxes? (And, actually, the Contra Costa Times and the San Jose Mercury News ran same article by the same reporter, but published with two different headlines — one emphasizing a lower deficit, the other emphasizing increased taxes.)

It just goes to show that skimming is not enough. To really make sense of the Governor’s budget plan, we have to read several different articles, commentary from different points of view, and ask our own questions.

What happens when we just skim? We draw erroneous conclusions. For example, here in a post on the Pleasanton Weekly Town Square forums, is some evidence of how those headlines can be misinterpreted:

State’s May Revise Gives More Money to Schools (WRONG!)

The parent who wrote the post implies that the Pleasanton school board might ignore the extra money the state might send to the district, still eliminate programs and fire teachers. Also, the parent misses a key fact: the May Revise is not the final budget.

Here’s what the Mercury News says the implications are for schools (in an article entitled “here’s what you need to know…“):

Q What happens to schools?
A Brown’s new plan would increase by $3 billion the amount of money going to schools from his January budget, funneling much of the unanticipated tax revenue to education. However, his budget message says that K-12 public schools could be closed a month early if the tax extensions aren’t approved and if an “all cuts” budget is needed. Neither Democrats nor Republicans in Sacramento support that.

There’s also another important detail that only a few news outlets (like the San Leandro Patch and the Orange County Register) have honed in on. The “increase” in education funding is not really an increase.

The OC Register quotes Ron Bennett, president of School Services of California, who explains:

“It would be a mistake to say education has a $3 billion windfall,” Bennett said.
“This deal is like saying to your brother-in-law, ‘I’ll loan you 50 bucks for your car payment,’ but then he comes up with the 50 bucks, so you say, ‘I’m not going to loan you the money anymore.’ “

School districts still have to continue making payments. They have just been given a brief reprieve.

The San Leandro Patch explains further:

Brown projected that the state will take in $6.6 billion more in tax revenue this year and next year than was originally expected, with $1.6 billion of that going to K-12 education and community colleges.

But that money is cash already owed to the schools. The Sacramento Bee reports that the extra cash would go towards reducing short-term IOUs to schools, which the governor’s previous budget proposal relied on, in part, as a form of “backdoor borrowing.”

Essentially, the state has been deferring payments to school districts. In this current fiscal year, the state told districts that they were budgeted to receive X million dollars, but they could only expect about 80% of that money to be paid in cash before the end of the fiscal year — 20% of the payments would be deferred, to be paid next year. Now, the governor is proposing that increased state revenue should be used to pay schools the remaining 20% on schedule, rather than deferring the payments.

So the fuss over education spending will continue. The budget is still being negotiated, and the best possible scenario is flat funding for next year. The worst possible scenario for next year looks less bad than it did last week — but it could still be pretty bad. After that, tax extension votes make everything uncertain again.

My prediction for Pleasanton

Based on what I have read so far, I would be surprised if the Pleasanton school board votes to rescind any layoffs at their next meeting. Rather, it is more likely that the budget will be approved in June based on conservative assumptions, and if the final state budget gives the district more leeway, then we may see some layoffs rescinded in July or August.

May 16 UPDATED: Gov. Brown’s May Revise of proposed CA budget

Back in January, Governor Jerry Brown issued his proposed budget for the state of California. Today, May 16, the governor released his revised budget proposal. (Here is the table of contents, and a link to the PDF.)

I especially encourage Educate Pleasanton readers to review the sections of the May revise that provide an introduction (PDF), and go into depth about K-12 education (PDF).

Here’s an excerpt from the introduction:

The May Revision proposes that the Legislature implement and the voters ratify a plan that preserves core services, including a reduced safety net. Current sales tax and vehicle license fee rates and the dependent credit exemption level would be extended for five years. Given the current revenue situation, the May Revision does not seek a 2011 personal income surcharge, but would reinstate it for the 2012 through 2015 tax years in order to fund core serves. Even with these extensions, State revenues, per $100 of personal income, would remain billions below the average level of the past three decades.

These revenues would be used for two purposes:

  • funding a major realignment of public safety programs. […]
  • protecting education funding. Schools have borne a disproportionate share of past spending cuts. These revenues will allow a reinvestment in education. Even under the May Revision’s increased funding for education, support for schools and community colleges will remain more than $4 billion below the 2007-2008 funding level.

I am reading those PDFs now, and will post again when I have had some opportunity to digest them.

Where to from here?

Now the negotiations begin again between the governor and the members of the state legislature. Two other proposed budget frameworks were announced recently, and will undoubtedly have an influence on negotiations. On May 12, Assemblywoman Conway (R-Tulare) issued a proposal for a no-tax increase state budget, that aims to protect education. That same day, twelve top business groups issued what they call a workout plan to encourage Democrats and Republicans to end the compromise and propose a particular set of principles for the budget and for legislative reform.

To influence Pleasanton’s state legislators, contact them!

Our state representatives are Mary Hayashi and Joan Buchanan.

Our state senator is Ellen Corbett. (Senator Corbett is also a member of the “big 5” since she serves as the Democratic majority leader in the State Senate.)

Let’s open up the dialogue here!

What will you tell legislators about the governor’s May revise? Are there elements of his proposal that you would support or oppose? Why?