March 11, 2005

Crisis in our school districts

By Bea Baechle
Editor

Like many school districts across the city, county and state, our local East Side Union High School District and the Evergreen School District are in serious financial trouble.

Both districts failed to pass a parcel tax in the November 2004. Both districts are impacted by cuts in education funding at the state level. And representatives from both districts have stated that rising medical insurance costs are a large contributor to their projected budget deficits for next year.

ESUHSD
For ESUHSD, the problems are right here, right now. The state mandates that all K-12 school districts file two interim reports and a final budget report to the county. To receive a positive certification, current state reserve regulations mandate that 1.5 percent of expenses must be maintained in reserves.

The district filed a negative certification for the first interim report in December 2004 and just filed a negative certification for the second interim report on March 10, based on the current 2004–2005 budget deficit and even greater anticipated budget shortfalls next year.

ESUHSD’s second interim report had an ending balance plus reserve of $1,558,671, which is a negative 1.1 percent of unrestricted expenses.

A Budget Task Force is in the middle of exploring budget cutting scenarios that it will present to the board of trustees by late May. (See article on page 4.)

Lack-of-work notifications
Until the board can review these scenarios—and to leave all options open—it will be sending out more than 400 lack-of-work notifications by March 15, a state-mandated deadline, even though it does not expect to ultimately lay off all of those employees.

This includes 170 tenured certificated employees, 165 probationary certificated employees, 45 temporary certificated staff and 28 administrators, including all assistant principals. The notices may impact about one-third of the teaching workforce.

Chief Human Resources Officer Bob Nuñez commented that the sooner the Budget Task Force can provide recommendations regarding certain programs, the sooner they can inform employees who will not be laid off.

Proposed teacher contract changes
To help balance the budget, Nuñez presented the ESUHSD’s proposal to change the collective bargaining agreement with the East Side Teachers Association (ESTA) at the March 10 board meeting.

The district proposed capping benefits, keeping salaries at this year’s level and increasing class size by three students. Increasing the class size by just one student, for example, would save the district $1 million per year.

“In this district, unlike some of the districts around us, almost all of our budget is tied up in personnel-related costs—about 92 percent of our budget is tied up in salaries and benefits,” said Nuñez, noting that another 6 percent must be set aside for utilities and another 3 percent for reserves.

He recommended that a public hearing be held on April 14 to discuss these proposals and the proposals that ESTA places on the table.

Audit
ESUHSD is also awaiting the results of an audit from the Fiscal Crisis Management Assistance Team, a state agency that works with districts in severe financial trouble. This team recently worked with the Oakland and Vallejo school districts.

Recommendations from this audit will be summarized in an upcoming issue of the Evergreen Times.

Evergreen School District
Although the Evergreen School District has sufficient reserves on hand for the current year, a budget adjustment of more than $900,000 will be required to return the reserve level back to 3 percent.

According to the Second Interim Report that ESD filed with the county, the deficit for the 2005–2006 school year is expected to grow to more than $6.3 million or 7 percent of the General Fund. The reserves will be depleted in 2006–2007, and the deficit is expected to grow to $8.9 million.

Since ESD cannot meet its financial obligations for the subsequent two fiscal years, the district had to certify a Qualified Second Interim Report for 2004–2005.

At a special board meeting held March 1, Jim Crawford, ESD’s assistant superintendent of business services, presented the board with a list of potential program adjustments totaling $1,219,020 that would bring the reserve level back to 3 percent.

On March 10, the board approved all of the adjustments on the list except for reducing instructional supplies by 12.5 percent.

Items on the list ranged from reducing substitute teaching fees by 10 percent to reducing assistant principal, psychologist, maintenance and grounds positions. The largest gain, $300,000, could be derived from applying school supplies carryover to the deficit.

The board also approved to restructure the prep periods for Grades 4–6. This will entail eliminating prep teachers and prep librarians and then adding back two full-time librarians, a one-hour-per-school media clerk and an outside prep contractor.

For a complete list, contact the Evergreen School District at (408) 270-6800.

The board also decided not to pursue a parcel tax at this time, due to the high cost of conducting a special election and because of the fact that voters did not approve the parcel tax in November. They will explore this option again some time in 2006.

Rallying to save public education

At least 1,000 people gathered at John Muir Middle School on March 9 to rally for public education and protect Proposition 98. The vociferous crowd included students, parents, teachers, classified school employees, school administrators, city, county and state elected officials and representatives from various education-related groups including the PTA, teacher and classified employee unions and various school administrative associations.

Approximately 10 administrators, teachers and elected officials urged the public school community to force Governor Schwarzenegger to fully fund the state’s schools. The governor, they said, has reneged on promises to support students and schools by withholding more than $2 billion from schools and proposing changes to the voter approved Proposition 98 that would eliminate minimum funding protection from schools.

While many in the crowd carried signs to protect Prop 98 and California students and schools, another contingent showed their frustration with signs indicating the state should “Terminate the Terminator,” and other references to our governor’s movie career.