News

District addresses budget crisis in the schools

Major cuts avoided this year but future looks 'catastrophic'

The School District is facing a potential shortfall of approximately $30 million during the next two years, and a portion of Tuesday night's School Board Meeting was spent discussing the problem and how to stay solvent during the crisis.

"Thanks to federal stimulus money and prudent reserves, we were able to avoid major cuts this year," said Superintendent Steven Enoch. "Many school districts were not able to do that. However, that was one-time money, and now we find ourselves back in a potentially catastrophic budget situation."

According to Enoch, in order to remain financially solvent, the trustees will need to begin to consider:

1. Reducing labor costs through programs and services reductions;

2. Reducing labor costs by increasing class size; and

3. Reducing labor costs through salary reductions, furloughs, benefits caps, etc.

"Like all school districts our personnel expenditures are approximately 85 percent of the budget," said Enoch. "Therefore, when all is said and done, dealing with such a huge shortfall generally comes down to these three main options."

The San Ramon Valley Unified School District released the following Questions and Answers about the budget crisis.

Q. What is the basic financial challenge we face as a district?

A. We are forecasting a two year deficit of approximately $30 million. By law we must maintain a balanced budget.

Q. Why does it seem worse than last year?

A. We have been able to operate this year without significant program reductions or employee concessions because we have been living on district reserves and Federal Stimulus funds, both of which are one-time funds and will be gone in the near future. This challenge is true in just about every school district in the state, which is why many are saying that 2010-11 will be the most difficult year for public education since the passage of Proposition 13.

Q. We passed our parcel tax, doesn't that help?

A. Yes, it does indeed help! If we had not we would be looking at a two-year deficit of approximately $42 million. It is also important to note that Measure "C" intentionally does not protect specific programs as the Board wisely anticipated that the funds would be needed simply to offset some of the loss of state funding. Measure "C" generates approximately $6.8 million dollars each year.

Q. How much has the state actually reduced funding?

A. The Governor's recent budget proposal for next year reduces funding to our district $6.1 million dollars. Taken together with the State funding cuts we have received since the 2007-08 school year, we will be receiving approximately $823 less per student next year than we did two years ago!

Q. But isn't our district growing and doesn't that help the budget?

A. We are still growing and it does help our budget. (Many districts have declining enrollment, which is very problematic in this economic environment.) We are projecting growth of 500 students from the start of this year to the start of next year. The "growth bonus" that comes from more students is already factored into our projected budget. The growth also offsets some of the potential layoffs that we might experience.

Q. What are the Board's and Superintendent's goals during this crisis?

A.

1. Minimize program and service reductions (including keeping class size as low as possible)

2. Preserve as many jobs as possible, which includes trying to avoid the demoralizing process of layoffs

3. Keep the school district financially solvent

Q. Why is the district offering a retirement incentive for teachers?

A. The purpose is to provide a health benefit incentive for senior teachers to consider retirement as this could help reduce the number of potential layoffs of recently hired teachers. The district may also benefit initially with a better cash position as newer teachers cost less than experienced teachers. In the long run, however, this incentive is not a "money maker" for the district, but it may help with short term cash flow. The down side is that we may lose many wonderful teachers, with the result being a loss of wisdom and skill that only experience brings. The incentive is not offered to administrators or classified employees because there is not a significant difference in pay between new and senior staff members, as there is with teachers.

Q. How might our school district tackle this serious budget shortfall?

A. Like all school districts, our personnel expenditures are approximately 85 percent of the budget. Therefore, when all is said and done it generally comes down to three main options. They are:

1. Reduce labor costs through programs and services reductions

2. Reduce labor costs by increasing class size

3. Reduce labor costs through salary reductions, furloughs, benefits caps, etc.

In addition, we may be able to move a little more categorical money over to our General Fund, as the State is allowing this during this economic crisis, although such a move is certainly not without consequences since these funds are currently used for various program support and services. Finally, there is the possibility of skipping a payment to the post retirement fund for one year. (This would not change the post retirement promise.) Some, but not all of these options require bargaining with our employee organizations. They all require the approval of the Board of Education.

Q. What kind of program cuts would we be talking about?

A. Most likely it would look similar to the list we contemplated last year and similar to what other district are considering. Central office administrators, department secretaries, librarians, special education support, assistant principals, elective programs, school closures, counselors, sports, maintenance support, custodians, etc. would be typical reductions that would most likely be considered. With a shortfall of approximately $30 million for the next two years the program reductions will have to be severe.

Q. What about furlough days? What are they? How do they work? How much does a furlough day save the district?

A. Furloughs are days off without pay. The end result is reduced annual earnings for employees. They would be structured so a full service year would still be counted toward retirement, but the compensation would be lower. Each furlough day for all employees saves the district approximately $750,000.

At this point the management employees and the confidential employees (non-represented executive assistants) have agreed to accept whatever furloughs other employees agree to. In addition, the top level administrators have agreed to an extra day beyond all other employees, and the Superintendent and Assistant Superintendents have agreed to two (2) extra days beyond what other employees receive.

Q. What changes are being considered for class size?

A. The immediate proposal is to raise K-3 and ninth grade up to 28:1. This is higher than we want, but at this time we must plan for this larger number hoping that we will not have to go this high. It is also possible that middle schools and high schools could have larger class sizes as well.

Q. What happens next?

A. While bargaining continues with our employee organizations, the Board will begin to identify possible program cuts and class size adjustments. We have little choice but to begin the process of preparing for layoff notices, which must go out to certificated staff (teachers, counselors, librarians, nurses, administrators, etc.) no later than March 15.

Q. What if the budget picture changes?

A. The Governor's budget is just a proposal. Once a final budget is approved we would anticipate meeting with the Board and with our employee groups to reassess the situation. If the State financial picture improves, we could back away from some of the anticipated actions, and of course, if the picture is worse, we might have to consider even more severe modifications

Comments

 +   Like this comment
Posted by Andrew Gardner
a resident of San Ramon Valley High School
on Jan 27, 2010 at 5:43 pm

Unfortunately, the day of reckoning is upon us and the reality of this is that if the money isn't there, the money isn't there. It won't appear out of nowhere and it sure doesn't grow on trees. As a teacher in this district, I accept this simple truth and the results of years of bad fiscal management in Sacramento. But then, I can only spend so much time pointing fingers.

So what can I do as a member of this great district to offset these drastic cuts? I think this is the question we should all ask ourselves.
-As teachers, what could we give up? Could we give up a couple of days pay? Could we handle a few more kids in our class?
-Parents, Could you handle not having school provided lunch services? Could you handle paying a little more to support athletic programs, counseling services, or fine arts classes?
-Administrators, Could you give up some of the administrative assistants? Could you take a pay cut?

But even more importantly than our own sacrifices is what we can collectively do as a community. Once again, as we contemplate the lay offs of hard working teachers and educational programs, nowhere is a dialogue happening about reducing energy costs. No, we just choose to carry on with our daily habits of excessive energy use with very inefficient facilities. $950,000, that is the average energy cost for our district per month. Surely we can find a way to become more energy efficient to help our district reduce costs and perhaps save one or two programs or teachers.


 +   Like this comment
Posted by Gunslinger
a resident of Danville
on Jan 28, 2010 at 6:13 am

Thank you for listening. We're gonna keep holding your feet to the fire, but believe me, to those I represent this is very heartening, that the government actually might listen to it's constituents if they voice their opinions loudly enough.

So thank you for considering raising class sizes. Now actually do it

And don't let go of or tempt into retirement the good older teachers just for the sake of new ones. Let the standard be who is good at their job or not, regardless of age. Some of my best teachers were older. And they didn't whimper at the thought of teaching 35 kids, since they were used to even more


 +   Like this comment
Posted by Duffy
a resident of Danville
on Jan 28, 2010 at 8:26 am

The SRVUSD might try a little "Zero based budgeting." Reduce the budget to the basic 3R's (Reading, Riting, Rythmatic) and then start adding back in the social engineering frills until you run out of funding..... and then stop!


 +   Like this comment
Posted by Frank
a resident of Danville
on Jan 28, 2010 at 9:30 am

Zero-Based Budgeting (ZBB) is an excellent concept, but little used. The 2nd worst President (Carter) in my lifetime brought ZBB to the Fed Gov't; concept good --- he never implemented it fully.

Concept provides that each governmental unit must justify its existence annually.

Government employees found this approach terrifying! Guess who won?


 +   Like this comment
Posted by Lisa Taylor
a resident of Danville
on Jan 28, 2010 at 9:46 am

How about our Superintendent and Principals take a pay cut!!!!!


 +   Like this comment
Posted by Gunslinger
a resident of Danville
on Jan 28, 2010 at 1:28 pm

And by the way, for the most part, I represent the majority


 +   Like this comment
Posted by danville mom
a resident of Charlotte Wood Middle School
on Jan 28, 2010 at 1:35 pm

With all the cuts in our school budget it amazes me that the district just held a meeting that proposed spending 30 million dollars for schools to have solar panels added to their roofs!!!!!!


 +   Like this comment
Posted by Tax Payer
a resident of Danville
on Jan 28, 2010 at 2:02 pm

School District needs to take a hard look at the huge revenues spent on "special education" issues. For example, I heard a student in the district was yelling inappropriate racial comments on the school bus, which offended the school bus driver and led to the student not being allowed on the bus. His parents "lawyered up", claimed a "disability", and now the district pays a private chauffeur to drive the kid to and from school.


 +   Like this comment
Posted by L.C.
a resident of Alamo
on Jan 28, 2010 at 3:44 pm

Regarding the comment about the solar panels: it is expected that the district will save money on their energy bills from day one if they use the qualified school construction bonds for solar. It is exactly the kind of innovative thinking that the district needs to use in this budget crisis. Because of the low interest rate bonds, generous PG%E rebates, and low construction costs due the recession, it is an ideal time install solar.
By law, the bonds cannot be used for programs or teachers, and they must be repaid in 16 years. Therefore it only makes sense to use the bonds for something that will generate revenue or at least be revenue neutral, i.e.solar. The district is currently doing its due diligence and will only go ahead with the solar project if all indications point to the district making money from the project. Many other school districts in CA have gone solar, including San Diego, San Mateo, San Jose, Irvine, Los Angeles, and Fremont.


 +   Like this comment
Posted by Karl
a resident of Danville
on Jan 29, 2010 at 8:06 am

Solar Panels --- If it was such a great idea, why wasn't it implemented 20 years ago. People act like it's "free money". This is another 'green boondoggle' in which the payback only looks good when the sales presents the proposal.

We need local financial analysts to step up and SHOOT DOWN this lousy idea. It's like a clueless person finally getting a credit card and immediately running it up to its limit. They think it's free money and they don't ever realize that they (OR SOMEONE ELSE) will have to pay it back.

Does anybody really believe that it will "...pay for itself..." in the year 2028?


 +   Like this comment
Posted by spcwt
a resident of Danville
on Jan 29, 2010 at 8:28 am

Get more aggressive at fundraising! Hold more fundraising parties, auctions and other events. Get parents involved in organizing it. Ask for more volunteers to orgainze these events.

Don't be afraid to ask us parents for more money. Clearly outline how much you need from each parent in order to avoid the most drastic cuts.

Don't be afraid to prominently list donors' names in emails, newsletters, bulletins, on signs where parents pick up their kids at school, in the office, etc. People respond to ego. Use that to your advantage.

Do whatever it takes to help these kids! Keep SRVSD at the top!


 +   Like this comment
Posted by Dawn
a resident of Alamo
on Jan 29, 2010 at 11:17 am

Never fear! The state is looking to spend ever more money when we're already broke.

Did this hit your radar? It was voted on this morning (1/29/10):

CA SENATE VOTES TO PASS BILL 810, CA UNIVERSAL HEALTH CARE

Full text of bill: Web Link

It now goes to the State Assembly.

Sorry for the off-school-topic post, but money is money.


 +   Like this comment
Posted by Parent
a resident of Alamo
on Jan 29, 2010 at 6:34 pm

In response to Karl's comment, financing for solar is different now than it was 20 years ago, and that is why so many other school districts around CA are now going solar. Irvine USD announced on Dec 8, 2009, that they will be installing solar at 21 sites which will decrease their electricity costs by more than $17 million over 20 years based on conservative estimates. Certainly during our fiscal crisis we must carefully consider the solar project as a way of saving money on our electricity bills that we can use to help save programs and teachers.

Local financial analysts are indeed looking at the numbers. The savings on the district's PG&E bills, along with the cash rebates will be enough to pay off the bonds, with an immediate net benefit to the general fund. The solar companies will guarantee the solar output and will reimburse the district should the output fall short. Local solar companies need work, and the project will generate jobs--a real win-win for our community.


 +   Like this comment
Posted by Valerie Jo
a resident of Green Valley Elementary School
on Jan 31, 2010 at 4:10 pm

The best thing we can do long-term is to vote out of office the financially irresponsible legislators who perpetuate this school funding crisis. The school funding formula must be fundamentally changed in Sacramento so that SRVUSD receives it's fair share of funding. Then, the funds must be spent responsibly. That requires that we elect local officials to operate our SRVUSD in a fiscally responsible manner (which is frankly nigh near impossible when what they receive from Sacramento changes so drastically from year to year). A stable funding source, rather than a variable one, and fiscally conservative elected officials to administer it are the answer. Get involved and support candidates who will take these necessary actions.


 +   Like this comment
Posted by Ron
a resident of Danville
on Feb 2, 2010 at 8:46 am

These hard decisions should have been made last year. The problem is personnel expenditures at 85%. No wonder they dont have any money. They have avoided making the hard decisions until the pot goes empty then they will look to parents to help out even more. Most everyone has had to make some cuts and what company has not trimed their work force, cut in pay, days off etc. to lower cost? Those are the companies that will survive and saw the writting on the wall last year and for some, two yeras ago. I have not seen this S.R.V.U.S.D. being proactive but reactive. They talk alot but thats it. The solar panel idea is good but you just dont throw those up and start saving money. You have to look at light fixtures, heating systems, energy leakage, insulation and make life style changes to get the most out of it. If they do all of that and really get the most out of it then I would say thats a great idea. If I see an effort to make the hard cuts that need to be done, then I will be ready to write an extra check or two every year but not without seeing an effort to save themselves.


 +   Like this comment
Posted by Andrew Gardner
a resident of San Ramon Valley High School
on Feb 3, 2010 at 8:00 am

I believe we need to view this time of uncertainty as a time of opportunity and use it to our advantage. Lets start looking a little more long term and figure out a way to avoid this situation again. Energy Efficiency, Solar Panel Installation, Learning New Habits as District Employees. If we can invest the time, money and energy into these types of changes now, then we will propel this district in the 21st century by becoming less dependent on Sacramento and PGE. We would be a model for many other institutions in California.


 +   Like this comment
Posted by Karl
a resident of Danville
on Feb 3, 2010 at 9:10 am

Steve Enoch's Folly?

In response to my concern expressed earlier about the SRVUSD shelling out millions for "Solar Panels", 'Parent' from the 'Alamo Neighborhood' commented:

"Local financial analysts are indeed looking at the numbers. The savings on the district's PG&E bills, along with the cash rebates will be enough to pay off the bonds, with an immediate net benefit to the general fund. The solar companies will guarantee the solar output and will reimburse the district should the output fall short."

The SRVUSD is non-profit and is not subject to paying state or federal income taxes. So, the "cash rebates" are a pipe dream. Even if that were the case, it is still taxpayers' money for another venture into SRVUSD financial mismanagement.

One commenter sometime back pointed out that the only financial analysis that shows this program would work would be that brought forth by the salesmen. We need qualified members of the community to step forward to objectively & indepedently make an assessment of whether such a large investment makes ECONOMIC sense.

Some SRVUSD staff may feel they are slighted by such an assertion; this only goes to the many disappointments local taxpayers have experenced when the board constantly comes to the community 'hat in hand' for additional funds / parcel taxes.

I guess it gets back to: Trust .... but verify.

If it makes sense economically and is supported by transparent disclosure on their website, the product may not be known at Steve Enoch's Folly.


 +   Like this comment
Posted by Dawn
a resident of Alamo
on Feb 5, 2010 at 6:23 pm

Until we address the real elephant in the room - union wages, benefits, pensions and the union as a voting bloc - nothing else matters.

The state of CA cannot afford to carry these unfunded pensions forward. It's as simple as that.

The union has has a heckuva ride, but it's well past time to close the carnival. Every single private enterprise is cutting back, experiencing a severe drop in orders and revenue, and subsequently will be sending LESS tax revenue to the State.

Can't get blood from a stone. The money just is not there.

The union is going to have to cut back as well, or the state will have no choice but to enter receivership to break the cycle.

Our state lost hundreds of thousands of high-income residents last year to more business-friendly states (think Texas, Washington, Florida...). That will mean even less tax revenue. California's continued reliance on income (revenue) from the top 2% will be its downfall.

Wake up, parents and teachers.


 +   Like this comment
Posted by American
a resident of Danville
on Feb 6, 2010 at 5:44 pm

Dawn: I agree 100% with you! There are many school districts that have had to file bankruptcy due to giving in to teacher union demands, particularly relating to pensions. In this day and age of shrinking revenue, no private business, much less a public entity, can afford to fund pensions. Lets hope our school board realizes this before it is too late.


 +   Like this comment
Posted by Andrew Gardner
a resident of San Ramon Valley High School
on Feb 8, 2010 at 7:40 pm

Dawn, I have never been more awake in my life. To insinuate that we are asleep because we don't necessarily agree with your political/economic paradigm is non-productive. The argument could be made the other way as well.

Nevertheless, I do believe that our district, with a history of providing excellent education and resources to its students on an unfair budget equation, will require a comprehensive financial overhaul in which all parties (teachers, parents, administration, and unions) will need to make concessions.

But I refuse to make a concession to my modest salary and excellent benefits if the district is unwilling to save money by pursuing energy efficiency and administrative cuts. We as a district should not and can not continue using inefficient facilities and wasting tons of money using energy irresponsibly. According to PGE and other energy consultants, our district could save millions over the next five years and save critical programs and jobs that enhance student achievement.

Pensions and salaries should be the last cutting board item after a comprehensive review of all other areas that could be chopped without disrupting the education of our students.


 +   Like this comment
Posted by American
a resident of Danville
on Feb 8, 2010 at 8:55 pm

Andrew: I respectfully disagree with your opinion that cutting teacher's pensions should be the last item cut in the budget, and your opinion that parents will need to make concessions to the teacher's union. This is not the 1950's where most private employers offered pensions to their employees. Essentially no private employers offer their employees pensions anymore, and the school union needs to realize that during their negotiations with our district. Parents in this so-called free, public school system, already contribute so much more than in most school districts, and we are not immune from the recession that has taken over the entire country. Asking parents to make more concessions so that you can have a financial benefit, i.e., a pension, that none of us have, while you have the summer off and we do not, is problematic. We are blessed to have great teachers in our district, but teachers, just like the rest of us, must be realistic in this horrible economy.


 +   Like this comment
Posted by Andrew Gardner
a resident of San Ramon Valley High School
on Feb 9, 2010 at 7:14 am

Just a couple of clarifications:

1. I do not believe that parents should make concessions to the unions, parents like the rest of us will have to give up something just like the rest of us during these times.

2. Secondly, no has ever said that public education is free. We pay for it with taxes and our tax dollars should be spent wisely to insure education like keeping good teachers in the classroom.

3.SRVUSD is a great district because of the socio-economic level of its community. If the community has it to give, which collectively they do, then they should if they want to keep the high achievement levels in our schools. Which in turn keep crime low and property values up.

Lastly, I remain neutral on union motives. My motive and would encourage community members and teachers to support me, is that the district continues day after day to spend excessive money on wasted energy. Energy Efficiency and Responsible Use should be a priority for our district in these fiscally tight times.

Why should parents fork over their money to keep rooms at 85 degrees in the winter and 65 degrees in the summer?

Why should parents have to pay for continuous water leaks? Or 500 computers left on all night long? Or stadium lights that stay on well after the teams have left?

And why should teachers take a cut while all these inefficiencies still exist. Fix the facility and energy problems, then I will negotiate my salary and pension.


 +   Like this comment
Posted by Gunslinger
a resident of Danville
on Feb 9, 2010 at 10:03 am

Your assumption that shools keep crime low and property values low is ass backwards. Good people, culturally homogenous areas like Danville keep crime low. Bring in a bunch of criminals from Richmond to go to our schools and you'll see crime rise, just like it did with the group homes and the murder of Rylan Fuchs. You teachers take credit for the job of good parents. Here's the facts, your opinion, Andrew, represents at most 20% of this area. American represents the majority. That has been long established. We don't buy the teachers unions bullshit anymore. End of story. So, no matter how much you union spin doctors try to convince us that you make our community, we know damn well we make this community what it is, regardless of your specific input. And so, you go ahead and try to spew your lies on these blogs, as if the people are really gonna believe it anymore, as if you guys aren't some minority of special interests. We ain't buying it


 +   Like this comment
Posted by American
a resident of Danville
on Feb 9, 2010 at 10:33 am

Andrew;
(1) I can not believe a teacher believes our district is great because of the "socio-economic" condition of the parents. If your premise is correct, than removing pensions for teachers would not affect the greatness of our district;
(2) Personally, I think the greatness of our district is largely due to parents who value education, who volunteer their time and efforts to get involved in the schools and help their children with their studies at home, and parents who teach their children morals and values, and not the "socio-economic" condition of the parents;
(3) What do you base your assumption on that parents in our district financially still "have it to give, and should give" to the district? Most parents I talk to openly admit cutting back on their expenses, including donations to their churches and charities, and making financial sacrifices at home. Remember, we have to fund our own retirements, as unlike the teacher's union, we do not have a pension waiting for us;
(4) Your comments remind me why it is called the "teachers union", and not the "students union", or "community union", as your primary goal is what is best for the teachers, not what is best for the students or the community. I only hope the school board looks out for what is best for the students and the community, and does not bankrupt our district to pay for teacher pensions that we can no longer afford.


 +   Like this comment
Posted by klat_wols
a resident of Blackhawk
on Feb 10, 2010 at 7:07 am

"Good people, culturally homogenous areas like Danville keep crime low..." uh? How is Danville culturally homogeneous?



 +   Like this comment
Posted by Bob
a resident of Danville
on Feb 10, 2010 at 9:00 am

How much of the district payroll IS ACTUALLY SPENT ON PENSIONS.

I think it is not that much.......

IF you think it is what is breaking the District's budget I think you are not smart.

I WANT TO SEE FACTS.

I get my pension from the State teachers Retirement system........Not the Mt. Diablo Unified school district that I used to work for,


 +   Like this comment
Posted by Mary
a resident of Blackhawk
on Feb 10, 2010 at 11:47 am

Gunslinger learn how to spell! You sound like an idiot and write like too! Please stop saying that you represent Danville because you don't.


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