The Oakland Unified School District may need to make $2 million in additional budget cuts or raise more money if it wants to give all district employees the same raise won by teachers after a seven-day strike.
That’s the conclusion of the Alameda County Office of Education after reviewing the district’s budget and its tentative agreement with the teachers, which is estimated to cost $36 million over three years. The school board is expected to vote on the teachers’ agreement at Wednesday night’s meeting.
The county office has determined that the district can’t afford to give the same raises to the rest of the staff it is giving teachers, as is customary, without cutting about $2 million more from next year’s budget or raising additional revenues. The additional cuts would be on top of the $20.2 million the board agreed in March to cut in 2019-20 to help balance its budget and pay for the teachers’ raises.
As part of the March cuts the district expects to lay off about 148 employees on June 30. The district is continuing to seek additional outside funding to help restore the cuts it has made for next year.
The district’s budget includes projections for raises for staff in addition to teachers. Since the district is still in negotiations with most of its other unions, it has not yet disclosed the anticipated costs for those agreements which will cover hundreds of staffers, including administrators and clerical workers.
However, an analysis of the district’s budget released Wednesday by the Fiscal Crisis Management and Assistance Team, or FCMAT, a public agency that advises districts in fiscal distress, shows that the district has reached a tentative agreement with its SEIU union that gives “me too” raises including a one-time bonus this year and 5 percent over the next two years, but does not include the additional 6 percent promised to teachers in 2021-22. FCMAT estimates that giving similar raises to all employees next year would bring the district’s deficit to $686,464 in 2019-20, which could adversely impact its ability to meet its minimum reserve levels. The district has not yet submitted its projected costs for the SEIU agreement to the county.
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According to the county, the additional $2 million in cuts are necessary because district officials overestimated their future enrollment numbers in their budget calculations and failed to include the vacation costs Oakland Unified will have to pay employees who are being laid off on June 30. The district has $6.6 million less than it needs, which drops its reserve below the required level of 2 percent of its budget, according to a letter from the Alameda County Office of Education to the Oakland school board president.
“ACOE believes OUSD’s fiscal position is uncertain and that additional revenue enhancements and/or expenditure reductions will be required in future years,” wrote L. Karen Monroe, Alameda County Superintendent of Schools, in a letter analyzing the district’s three-year budget projections, which included “me too” raises for all employees. In a separate letter reviewing the teachers’ agreement, Monroe said the contract “does not ‘endanger the well-being of the school district,’” but that if the board approves it, additional cuts or revenues “may be required for additional employee compensation and other costs.”
Despite these warnings, the district’s staff report to the board says that the agreement “is within the district’s financial ability to cover” and claims that it “has been approved by the Alameda County Office of Education.” However, Michelle Smith McDonald, spokeswoman for the county office of education, said “it is inaccurate to say that the county ‘approved it.’ The language in the letter speaks for itself.”
The district’s report, which is expected to go before the full board Wednesday, is available on the district’s website, along with the county letter regarding the agreement.
The district did not include the county letter on its three-year budget in the board’s agenda report for the Wednesday meeting even though it comments on the district’s inability to give the same raises to all employees.
Because fiscal problems required the district to get a $100 million state loan in 2003, Oakland Unified has been under the review of a state appointed trustee. Chris Learned, the current trustee who oversees the district’s budget, said the district has money to cover the teachers’ agreement, but said raises for other employees “may require the need for additional cuts or revenue enhancements.” He also said he recommends that the board continue its practice of maintaining a 3 percent budget reserve, which could require additional cuts.
Keith Brown, president of the teachers’ union, said Tuesday that each union negotiates separately and that most other district unions are still in negotiations. However, he said it is “a customary practice” for each bargaining unit to get the same salary increase as teachers in terms of percentages.
“During our negotiations, our bargaining team did some costing out of how much it would cost the district to give the other unions comparable packages in salary increases and our bargain team was confident that the district had enough money to provide similar packages for the other unions,” he said.
In response to questions from EdSource about the county’s letters, district spokeswoman Valerie Goode said the board “already has, and is considering” the budget letter from the county, which was sent directly to all board members on April 15.
She did not specifically address the budget concerns outlined in the county’s letter and did not explain why the district did not include the budget letter in its public agenda packet.
“Oakland Unified School District is focused on ensuring that all finances are in order,” Goode said. “We believe that the numbers in our second interim (budget) report are correct, that it’s all about the timing of revenues and liabilities. Based on the work of our staff, we believe that our reserve will remain above 2 percent.”
Angelica Jongco, an attorney for Public Advocates who is also a district resident, said the district should have included the county’s letter in its agenda report to help the public better understand the district’s financial outlook.
“This letter from the county raises specific concerns about the district’s finances that could lead to further budget cuts,” she said. “It’s the type of information that would be helpful for community members to understand. Hopefully, its omission in the board packet was an oversight.”
The district’s tentative agreement with the teachers’ union, reached on March 1, calls for a one-time 3 percent bonus to teachers, nurses, psychologists, counselors, speech therapists and resource specialists, along with an 11 percent pay increase to be paid out as follows: 3 percent retroactive to Jan. 1; 2 percent on Jan. 1, 2020; 3.5 percent on Jan. 1, 2021 and 2.5 percent on June 30, 2021, which would go into effect in the 2021-22 fiscal year. The agreement also calls for decreased caseloads for some employees, as well as class-size reductions.
Editor’s Note: As a special project, EdSource is tracking developments this year in the Oakland Unified and West Contra Costa Unified School Districts as a way to illustrate some of the most urgent challenges facing many urban districts in California. West Contra Costa Unified includes Richmond, El Cerrito and several other East Bay communities.
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Bay Area Citizen 4 years ago4 years ago
Deborah Green, please stop blaming charter schools. These are public schools that parents have chosen because they believe they will best serve their sons and daughters. It's not our place to tell these parents that they are wrong or have to only go to their local district school. We can have thoughtful discourse about the pros and cons of parents having choices to send their students to non-profit run charter schools, but … Read More
Deborah Green, please stop blaming charter schools. These are public schools that parents have chosen because they believe they will best serve their sons and daughters. It’s not our place to tell these parents that they are wrong or have to only go to their local district school. We can have thoughtful discourse about the pros and cons of parents having choices to send their students to non-profit run charter schools, but let’s not fall prey to the national epidemic of scapegoating and vilifying people who make choices for their families. Just my opinion, but hope we can be more civil, less knee-jerk and respect parents who have chosen the public school they think is best for their family. Thanks for considering.
Deborah Green firstname.lastname@example.org 4 years ago4 years ago
Well, if they stop funding charter schools, they’ll have $57,000,000 to spend on public schools. Charter Schools have become the money pit for private investors.
Todd Maddison 4 years ago4 years ago
So, using Transparent California data and state DOE data, by any measure it seems on average Oakland Unified dramatically underpays it's employees. If we look at "all full-time employees excluding teachers", from the latest TransCal data (2017) we see that average pay is $62,135. Meanwhile the average for Alameda County (per US BLS numbers) is $73,214 for the same year. If we look at the J90 data for teachers, the average pay in 2017 … Read More
So, using Transparent California data and state DOE data, by any measure it seems on average Oakland Unified dramatically underpays it’s employees.
If we look at “all full-time employees excluding teachers”, from the latest TransCal data (2017) we see that average pay is $62,135. Meanwhile the average for Alameda County (per US BLS numbers) is $73,214 for the same year.
If we look at the J90 data for teachers, the average pay in 2017 was $62,742. Meanwhile the US Census Bureau’s “Educational Attainment” numbers for 2017 show an average comparably-educated Alameda County resident makes $86,390.
In a somewhat rare case, in Oakland even if we include the inflated value of benefits that OUSD employees get, they’re still underpaid relative to the local population.
So… WHY are they in such deep doo-doo from a budget perspective? In other CA districts I’ve looked at the answer is obvious – they’ve given their people raises at rates that greatly exceed the average for “everyone else” in their area, and are paying wages that are above the prevailing wage for either teaching or other staff in their area as well. That does NOT appear to be the case with Oakland.
Has anyone done a comparative analysis of the OUSD budget vs. any district that is in reasonably good financial condition? Is it excessive headcount, too many inefficiently-used facilities, high spending in other categories, etc?
What is it?
Theresa Harrington 4 years ago4 years ago
These are good questions, which the board and district are grappling with. I don't know of an analysis like the one you are asking for, but during last night's board discussion about the superintendent's efforts to redesign the central office to make it leaner and more efficient, board members commented that the central office staff is still larger than those in most comparable districts. Some of this is because OUSD has a lot of initiatives … Read More
These are good questions, which the board and district are grappling with. I don’t know of an analysis like the one you are asking for, but during last night’s board discussion about the superintendent’s efforts to redesign the central office to make it leaner and more efficient, board members commented that the central office staff is still larger than those in most comparable districts. Some of this is because OUSD has a lot of initiatives other districts don’t have, such as “full community schools,” an Office of Equity and other programs that some districts don’t offer. It also has a very decentralized budgeting system that gives a lot of autonomy to principals, which the superintendent said is not maximizing its ability to get discounts on contracts that it could get if several schools were to purchase the same services together. Also, the county is coming in to help the district implement “best practices” in its fiscal and budgeting departments, to avoid the district’s past history of getting hit with “big surprises” every year after the closing of the books. Here is a link to the superintendent’s work so far on the central office redesign, which is expected to result in a new org chart to be unveiled in June: https://assets.documentcloud.org/documents/5978061/19-0727-District-s-Central-Office-Redesign.pdf
Todd Maddison 4 years ago4 years ago
Thanks for the link. Assuming that CO bloat is indeed a factor, then perhaps this might be at least a partial solution. It surprises me, however, given the focus and attention that OUSD has had on it's finances for many, many years that there is no analysis readily available of how OUSD's cost structure benchmarks against comparably-sized districts that are NOT in financial distress.. I know the universe of "comparably-sized' is small, and the mix of student groups … Read More
Thanks for the link.
Assuming that CO bloat is indeed a factor, then perhaps this might be at least a partial solution.
It surprises me, however, given the focus and attention that OUSD has had on it’s finances for many, many years that there is no analysis readily available of how OUSD’s cost structure benchmarks against comparably-sized districts that are NOT in financial distress..
I know the universe of “comparably-sized’ is small, and the mix of student groups is likely different to some degree, but with an enrollment of about 50K kids, a quick look at DOE enrollment data for FY18 shows 18 districts statewide with “close or larger” enrollments (16 if we throw out LA and SD, who are much larger…)
Of those, although many are also in financial distress, I can say I haven’t seen, for instance, Capistrano Unified “making the news” for having severe fiscal issues.
And, according to the latest J90, their average teacher pay is $89K/year – WAY higher than OUSD.
So, one would THINK that an analysis using the SACS data would quickly identify budget categories where OUSD is seriously out of whack with Capistrano, which then begs the question “if Capistrano can provide adequate educational support for it’s kids with lower levels of spending in those areas, why can’t OUSD?”
Certainly there may be some regional differences, but I don’t know if one can make a strong case that various operational expenses MUST somehow be significantly higher in the Oakland area than they would be in Capistrano -which is not exactly a “low cost area” to live or work in.
Perhaps a project for Edsource’s data analysts someday? It would be great to see how the spending breakdown – and variations – look between “districts that are having problems” vs. districts of similar size that are not….
Theresa Harrington 4 years ago4 years ago
The student population is Capistrano is far different from that in OUSD, with far fewer low-income children, students of color, English learners, etc: https://dq.cde.ca.gov/dataquest/dqcensus/EnrCharterSub.aspx?cds=3066464&agglevel=district&year=2018-19. So, it would be important to find school districts of a similar size that also face similar challenges.
However, I believe the EdData website has comparison capabilities that could be used to check on some of the issues you raise: https://www.ed-data.org
Todd Maddison 4 years ago4 years ago
Sure, I just threw them out because the enrollment size was similar.
Although one would think that extra spending on categories for things like, say, English Learners, could be identified in their spending.
It’s a somewhat complex analysis, for sure, but not something that is un-doable. One would think that FCMAT would be doing this.