District Administration Opposes Self-Qualifying Option for Budget

Yesterday, the Vanguard published excerpts from the Vanguard Radio interview with DTA President Cathy Haskell and incoming President Ingrid Salim. One of the recommendations the teachers made during this interview, was support for self-qualifying.

Ingrid Salim: “one of the ways that we would advocate that we would make the budget balanced now is what is called a self-qualification. On paper we acknowledge that that third year out we don’t make ends meet. We will deal with that over time. If we self-qualify that way and make a couple of other cuts, there are no cuts necessary right now in order to balance the budget right now. We say that we haven’t balanced it, we acknowledge that…”

“We’re looking at something like 70 percent of districts in the state of California who might be doing that. That’s just a reflection of not having a budget now, not having assumptions, and seeing that there’s no way to make it balance in three years unless you cut your staff.”

As Cathy Haskell put it, the problem this year is the state’s revenue stream to local districts, not our fiscal management.

“Last year we chose to show that we had a positive certification. And to be positive it means you have to show that all three years you will be in a positive cash flow.

This year the trouble isn’t how we’re organized as a school district, it’s the funding from the state. With the Governor’s projection of what the budget for the state will be, I don’t know a district in the state that won’t be in trouble the second year out. Most of them will be trouble next year. We now have some of that cushion of Q and W, but nobody has a cushion for a 16% cut.”

Today in the second part of our series, we have the response from the district Chief Budget Officer, Associate Superintendent Bruce Colby, who opposes self-qualification.

Associate Superintendent Bruce Colby’s response

It is the responsibility of the DJUSD Board and district administration to ensure a healthy district protecting kids, programs, and teaching. Maintaining fiscal solvency is part of maintaining a healthy district. It is the statutory responsibility of the Board to submit a multi-year projection to the County Office of Education at interim reporting periods. This report is used to assess the fiscal health of the district. If the district is unable to show fiscal solvency over the three year reporting period, the County Office of Education is required by law to put together a fiscal intervention plan to get the district back on a healthy fiscal track. A district can voluntarily go into this intervention status or it can be assessed by the County Office of Education.

This obviously becomes a challenge during tough economic times when the State funding levels are being reduced. In order to maintain our fiscal solvency, the district must develop and approve actions to reduce expenditures if needed to close our budget gap created by the State budget. Our district is responding to this challenge and our Board and Administration are developing plans to maintain a “positive” status, thus showing ability to maintain fiscal solvency without outside intervention. This is being fiscally responsible.

Unfortunately, the budget assumptions by the State are not clear and the district must review and discuss multiple scenarios based upon different levels of assumptions. The impacts of these scenarios have been discussed including the use of operating savings, “categorical flexibility”, staff reductions and employee salary reductions. In the end, balancing the budget will most likely require the use of all these options.

The DTA leadership has opined on their preference, which is to maintain current staffing levels, spend down cash reserves and “self-qualify”. The Board and the Administration does not believe this is in the best interest to the long term health of the district. It does nothing to solve our fiscal challenges and puts the district at greater risk in the future. DTA leadership is only looking at the problem from a high level. Fiscal solvency means adequate cash to pay the bills. Due to the drop in State funding, use of district reserves, and slowdown of State apportionments, cash levels for the district will be much lower than in the past, requiring higher levels of short term borrowing (TRANS). This borrowing will be a at risk if the district does not respond with a realistic reduction plan. The financial markets are very much aware of the State budget and the impact on school districts. The debt rating agencies will be asking very detailed questions regarding our financials. If we have no answers, we risk getting a loan. Without a loan, we are out of cash. The district can not take this risk.

The Board and Administration are in agreement with DTA in developing solutions to maintain staff in these challenging times. The district is trying to use staff attrition when possible to develop savings, reduce operating expenses and use “categorical flexibility”. This however is not enough to close the gap, and the Board is asking all employees to agree to a possible 2.5% salary reduction to save staff cuts. In order to save staff cuts prior to the March 15th notice period, employee associations must agree to a salary reduction by the end of this month.

These options will be discussed an all employee meeting schedule for this week. I have attached a report from School Services of California that describes the process for fiscal status and interventions.

{Click on the top right to enlarge and read the full document}

SSC Fiscal Report Budget Reports

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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  1. wdf

    From yesterday:My View said… What is the great fear if we self-qualify? So what if the county takes over? Why is that such a horrible thing? I need to know what the fearmongering is all about.Bruce Colby outlined some good points today. Last year the May revise on the state budget turned out better than the original January budget. In hindsight, the original January budget was closer to reality given the proposed mid-year cuts. Also, DSF was fortunate to raise $1.7M in a better economy last year; it's hard to imagine a full duplication of last year's effort, given the current worsening state of the economy. This time last year, I think everyone expected this year's budget process would be about as gloomy as it is. It seems that the whole state budget scenario will not improve this time next year, either.Seeking a positive qualification on the budget would seem to better acknowledge the current uncertainties and challenging economic times. Seeking self-qualification at this point in the process would be giving up prematurely on making hard choices that appear inevitable.In summary, we have seen what happened to a state budget based on faulty assumptions. Seeking a positive qualification builds future budgets on the most conservative assumptions. Not a bad thing for now, it seems.

  2. Mike Adams

    First I want to thank Associate Superintendent Bruce Colby for taking the time to engage the community in this forum. I also want to acknowledge his sensitivity to the current situation by foregoing a raise – a very real reflection of his commitment to the solvency of the district.I will be the first to admit that I do not understand the nuances of the fiscal operations of the district. I cannot accurately assess the risk of losing our ability as a district to borrow money. I do want to point out that there are other critical criteria for the district in addition to fiscal solvency. It is essential to maintain and improve the quality and morale of the teaching and teachers.The problem is not of our making – we do not have a state budget on which to base our projections. At what point is it reasonable to say that the damage done by overly conservative assumptions forced on us by uncertainty regarding state funding exceeds the damage caused by self qualification?My point is that there are more ways to …bankrupt… a district than merely fiscal ones. Moving forward must balance the costs, both financial and less quantifiable issues of quality and excellence, of the different approaches.I don't want you to think that this has no grounding in experience. In the midst of last year's pink slips my son, a senior at Davis HS at the time, lost his excellent math teacher, who decided that he could not risk waiting to find out if the pink slips were …real…. This had a profound impact on his interest in math.Again, thanks for participating.

  3. My View

    So, what it boils down to is this:1) Teachers want the School District to self-qualify. This would ensure no teacher has to take a pay cut for the moment, until the actual state budget is passed, and the School District knows exactly what figures it is working with.2) Bruce Colby/School District wants to avoid self-qualification and the loss of some of his autonomy in the decision making process, and make the teachers agree to take a 2.5% paycut, so that the School District can balance its budget. He is willing to forgo his 5% raise as well (big deal!).It sounds to me what we have is a failure to communicate – on what it feels like to take a 2.5% pay cut on $50K, as opposed to forgoing a 5% raise on $150K. There is a stark difference in perspective, don't you think? Would Bruce Colby be so eager to avoid self-qualification if it meant him taking a 20% pay cut? Or heck, even a 2.5% pay cut? How about an unpaid 2 day a month furlough for him, like the state workers are faced with?Let's face it, if the teachers agree to a 2.5% pay cut, it makes Bruce Colby's job easier. He doesn't have to make tough choices – like cutting some of the pork. How about getting rid of his 5% raise first? How about not borrowing $4 million to renovate DHS stadium? How about we don't pay a Davis author to give lessons to cafeteria staff for the crunch lunch program?You know, I have repeatedly heard there is no pork in our schools. And in fact, that is what was told to us prior to the School District somehow finding $1 million in fat to cut last year. I don't blame the teachers for not wanting to balance the school's budget on the backs of their meager salaries.Yes, these are tough budgetary times. But it would seem more fiscally prudent to see what the budget figures are, before demanding that teachers take a pay cut. They still may have to, in order for the School District to attain a balanced budget. But if they are going to take such a hit, I certainly would like to hear their ideas on where the School District can cut costs. So far, I haven't been impressed w Bruce Colby's ideas, nor the School District's or School Boards. They don't see any expenditure as anything other than a necessity – except maybe keeping Valley Oak and Emerson open. Their solution has been to close entire schools. Ugh, ugh, ugh.

  4. Davis parent

    DJUSD teacher,Thanks for what you do.What are some equivalent alternatives to the currently proposed cuts? To what degree do you think the district should avoid laying people off?The discussion of …pork… seems to be a bit mythical. Or what seems to be one person's pork is another's top priority. Some proposed …pork… that has been mentioned before is spending that is locked in through parcel taxes. Is there enough identifiable …pork… to make up for other cuts?

  5. DJUSD Teacher

    Thank you Davis Parent and this blog for all of the exposure and for making the general Davis population understand what is going on with the District.To answer your question, true one man

  6. Lexicon Artist

    …What are some equivalent alternatives to the currently proposed cuts? To what degree do you think the district should avoid laying people off?…According to this graphic, which David Greenwald posted recently, teachers (and other certified employees) account for 67% of the labor costs; classified employees 23%; and top administration 10%.In terms of cutting the cost of individuals, it seems to me easiest (if salaries must be reduced) to trim some of those big 6-figure contracts paid to administrators, who've won their pay under the theory that their talents are extraordinarily unique, a theory worth doubting. Were the skills David Murphy brought to the table extraordinarily unique?As far as cutting teacher pay goes, I think that is preferable to firing teachers. Yet I'm sympathetic to any very good teacher who deserves more than he's making now and is thus reticent to accept a reduction in salary.What I wonder is how much …waste… can be found in that classified category?* The district is spending $2.9 million on salaries (not including benefits) for secretaries and technicians, for example. Is that necessary? Are there cheaper alternatives? The district expends $2.4 million on the salaries (not including the benefits) for custodians, delivery, maintenance, etc., plus the cost of buying and servicing a large fleet of vehicles and equipment they use. Could outsourcing save money in that area?* There is a big values question at play when it comes to classified employees. In most cases, these are the least paid, least skilled district employees. If the district outsources their jobs — for example, instead of having a district employee cut the grass and drive a district-owned mowever, contract with a private maintenance company (which pays lower wages and probably no benefits) to have these jobs done — the losers will be the employees least able to recover. So the values question is: Does the district prefer to keep as much money as possible in the classroom? Or does it prefer to make sure that its lowest paid workers earn a decent living? If it is the latter, that (to some extent) takes money out of the classroom.

  7. David M. Greenwald

    …teachers (and other certified employees) account for 67% of the labor costs; classified employees 23%; and top administration 10%….Rich:Just for clarification purposes, the 10% category includes not only what we might consider …top administration… but also principles (site administration), some consultants and a few secretaries. Principles account for about half of that 10% and I would say that top administration accounts for about 2.76%.Just want to be clear about what that 10% category includes.

  8. wdf

    What I wonder is how much …waste… can be found in that classified category?*Rich,You may want to revisit the 2004 DJUSD budget season, perhaps as described in the Enterprise for ~Feb.-May. There was more budget cutting going on then (not as bad as now), and classified in particular took big hits. Many classified employees feel that they never recovered from those cuts. I was not paying close attention during those years, but apparently the budget was balanced on the backs of classified staff that time.

  9. David M. Greenwald

    WDF:Interesting point, in fact that was one angle I didn't have time to fully explore with regards to Tahir Ahad. Some of the employees I spoke with however indicated there were some interesting shady dealings going on with that.

  10. Lexicon Artist

    Let me make clear that I am not advocating cutting the salaries or benefits of classified employees. I am simply asking, if the goal is to keep as much money as possible in the classrooms, could the district save money by (for example) firing all of its custudians and groundskeepers and maintenance staff and outsource all of those jobs to the lowest bidding private contractors? Again, even if they could save money doing that, I'm not saying I think it is what they should do. It seems to me it comes down to a values question.This question reminds me of a passage in a book that I read a number of years ago about Japan. The author, T.R. Reid, who was the Washington Post correspondent in Tokyo, noted that in the school his children attended, they did not have any custodians. Instead, each child was expected one day a week to come to school two hours early and clean the bathrooms and wash the floors and dust where needed and so on. That wouldn't fly in our culture, but it worked without a hitch in Japan….There was more budget cutting going on then (not as bad as now), and classified in particular took big hits….I recall that. Yet I would not be surprised to find that an outside contractor — who hires custodians for the minimum wage and gives no benefits — would be much cheaper than what we are paying now. The question is do we really want to harm the interests of the least powerful workers for the district in that manner? (My guess is that most people in Davis don't want to do that, even if it means less money for in-class expenses.)The City of Davis, it's worth noting, outsources about half of the parks' maintenance to two private contractors (the rest is done by City employees). However, because of the expressed values of the City Council, the City does not save one cent from outsourcing. The City does not award these contracts to the lowest bidder. Instead, it requires that the contractors (GP Landscape and Coast Landscape) pay high wages and benefits and so on.

  11. Lexicon Artist

    I just found my copy of that T.R. Reid book in my office. It's called …Confucius Lives Next Door: What Living in the East Teaches Us About Living in the West…. A good read, though maybe a little dated, now.

  12. My View

    …My View said… So, what it boils down to is this:etc….Our loyal contrarian pessimist.So glad it's sunny today….Funny how most of the posts after mine are in absolute agreement with me. My comment to you is if you have nothing constructive to say, then don't say anthing at all!!! If you have something to say, then say it!!! Sounds like you really didn't have anything to add to this discussion – much like the School District/Administration.

  13. X-ray

    I appreciate most of the teachers my kids have had, but I seriously have to wonder if the DTA really has the best long term perspective and interests.Teachers took a total 3% raise in their compensation last year (1% on salary, 2% on benefits). That is what is now eating into the ongoing structural deficit. If clearer heads had prevailed last year, we could have avoided a significant amount of this mess.The DTA is throwing out all kinds of smoke out there, but offering no other constructive alternative other than pink slipping more teachers.The union shows more concern with protecting senior members than in valuing its newest blood. In the process, they end up …eating their young…. Which group has more career years to spend with DTA, the newbies or the grayheads?There is no Superman who is coming to save the day this time.

  14. wdf

    Mike Adams said:I will be the first to admit that I do not understand the nuances of the fiscal operations of the district. I cannot accurately assess the risk of losing our ability as a district to borrow money.If cash flow from the state or county (two sources of the district’s funds) are delayed at any point during the year, for whatever reason, then the district may need a short-term loan in order to make payroll.If the district can’t pay its employees because of a delay in funds transfer (from state or county), and it can’t get a loan to cover the delay, imagine the damage to our local economy and morale. That would just be a start.The state has already proposed delays in transfering funds to its dependent agencies, and it is already starting to issue IOU’s.

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