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School board ponders health benefits for its own members

Original post made on Apr 25, 2014

The Palo Alto school board is weighing the pros and cons of offering health benefits to its own members following a subcommittee's recommendation that such benefits be instituted.

Read the full story here Web Link posted Friday, April 25, 2014, 12:48 PM

Comments (33)

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Posted by Jim H.
a resident of Duveneck/St. Francis
on Apr 25, 2014 at 3:43 pm

How many people are deciding NOT to run for PAUSD board because they do not offer health benefits? Is this really necessary?
Let's put the money into the students and the teachers.


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Posted by Alphonso
a resident of Los Altos Hills
on Apr 25, 2014 at 6:04 pm

The job is significant and very important, but it is a part time position Perhaps benefits similar to any other part time PAUSD employee and no lifetime benefits. I agree with Mitchell - this smacks of conflict of interest so it would be best to not offer the benefits.


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Posted by Tamara Logan
a resident of Los Altos
on Apr 25, 2014 at 6:05 pm

As member of the Los Altos School District Board of Trustees, I can attest to the fact that the LASD board does not receive a stipend of anything near $24,000. We receive $20 per meeting attended. Board members may purchase district health insurance by paying 100% of the cost.


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Posted by A Parent
a resident of Another Palo Alto neighborhood
on Apr 25, 2014 at 7:32 pm

I think it's really unseemly to even be considering this when we have district employees, such as the health techs at our middle schools, who are working just under the number of hours that would require the district to provide them health coverage, and called health techs instead of nurses in order to justify paying them less.

Instead of expanding the incentive to staying on the board, we should instead be putting in term limits. I don't see that we need to be offering perks for staying on the board.


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Posted by No, No, No
a resident of Adobe-Meadows
on Apr 25, 2014 at 11:34 pm

I agree with Dana Tom, Barb Mitchell, and "A Parent." Health benefits should not be provided to PAUSD board members - it should be a volunteer position, or barely compensated such as "Tamara Logan" says is the case in LASD. In the case that someone low-income wants to run I would support "scholarship" health benefits, but only based on proven need (i.e. assets are considered as well as income).

School board members should be volunteering their time because they are passionate about our schools and want to work toward the best possible educational environment, not because the pay and benefits are attractive.

With ObamaCare, everybody has access to affordable health care, right?


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Posted by Bob
a resident of Another Palo Alto neighborhood
on Apr 26, 2014 at 10:59 am

> "I've had those conversations with people in other districts
> who could not afford to run but for that, and I do want people
> to run who do not have great personal wealth, so I think this
> is appropriate," Townsend said.

Interesting. Wonder how many of these conversation three-term Trustee Townsend has actually had? One can also wonder how someone who can not afford to run for office is likely to make a good Board of Education member? Every school district in the US now has budgets that run in the tens, hundreds and billions of dollars. How in the world does Camille Townsend believe that someone who can not afford the modest amount to run for office will be able to understand, and manage, the budgets of the Districts to which they might be elected?

Townsend, who now has been dispensing her craziness for over eight long years—demonstrates why there should be term limits for Trustees. She clearly has lost whatever perspective she might have ever had when first elected.


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Posted by Peter Carpenter
a resident of Atherton
on Apr 26, 2014 at 12:40 pm

Peter Carpenter is a registered user.

What part of the term "Public Service" do these Board members not understand?


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Posted by Astonished
a resident of Greenmeadow
on Apr 26, 2014 at 1:09 pm

Bob,

I personally agree that the board should not extend healthcare benefits to themselves, but I'm disturbed by your conclusion that someone with few assets can not manage a large budget. An individual's personal financial situation isn't necessarily a reflection of their education level or understanding of financial matters. There are plenty of people who have chosen public service/nonprofit work who manage large budgets and are well educated but don't have assets or high incomes.


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Posted by anonymous
a resident of Duveneck/St. Francis
on Apr 26, 2014 at 5:02 pm

I oppose this idea. But there is an angle to consider:
OK, either this is a volunteer or near-volunteer position (with commensurate level of public expectations) OR it is a professional, paid position with expectations for performance. Transparency of review of performance of each member must be then mandatory.
It is time for turnover on this Board of Education. I don't think the stale situation of members on this board is due to not being able to afford health insurance.
It is correct the position takes time.
Government gobbles up ever more of our monies from the private sector...


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Posted by Peter Carpenter
a resident of Atherton
on Apr 26, 2014 at 5:06 pm

Peter Carpenter is a registered user.

Regardless of compensation every elected person is accountable for their performance. The problem is that their employers, the citizens, often fail to hold them accountable.


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Posted by Bob
a resident of Another Palo Alto neighborhood
on Apr 26, 2014 at 5:59 pm

> There are plenty of people who have chosen public
> service/nonprofit work who manage large budgets
> and are well educated but don't have assets or high incomes.

Are you sure about this, or just believing it to be true because it fits your egalitarian view of how things ought to be?

Let's take a look at the Poway School District in SoCal:
Web Link

This is an example of people with no finance experience agreeing to something that wasted hundreds of millions of dollars of the public's money—so much so that they should have been jailed for their criminal ignorance. The issue here, it would seem, is how can someone who has no knowledge of finance, or wealth management, have the slightest idea of how to evaluate a financial proposal put before an elected board of school officials?

The NPR article reports that the Supt. of the Poway District defended his district's actions, by saying:

"Poway has done nothing different than every other district in the state of California."

Interesting that this highly educated "educator" seems to have no understanding of what went on, and seems to be endorsing the spending of $1B in payback for $100M school loans. Everyone associated with this debacle should have been recalled, and fired. But this is the public school system—where no one seems to ever be held accountable for anything that they do. (Wasn't it just a week ago that we were discussing the Phil Winston Affair?)


Locally, we saw a failure of the School Board to be able to understand the models that the Royal Bank of Canada was presenting a few years ago, when the Board claimed that they could payoff the Measure A bonds using the Measure B bond rates:

Web Link

Well—it didn't take long before their "miscalculation" became evident. As it turned out—there were, and are, no members on the Board with any financial acumen. Just members who, like Camille Townsend, believes that: "this District can spend every dime it gets".

As long as spending every dime that comes down the road is your understanding of what good budget management is all about for a school district—then maybe you are right. I, on the other hand, don't believe that mismanagement can ever be considered good management because the money is spent on schools.


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Posted by A Parent
a resident of Another Palo Alto neighborhood
on Apr 26, 2014 at 7:58 pm

I think we should have full-time City Councilmembers now, and pay for them to be full-time employees of the City. I think their first job should be to fire that many redundant City workers to pay for it, and that opportunity exists in a large City.

However, school board is different. It's a big job, but it's far more manageable as a part-time commitment. Board members have the incentive to become board members for the good of their own children in school, for the good of their property taxes, or for the spring board to future office (which has happened) from a relatively easy elected post.

Since the primary motivation should be intrinsic rather than habit or the exercise of power, there should be no enticements to the position or to remain in the position. Absolutely no such benefits should be offered. Especially not before all district employees who actually care for our children enjoy such benefits.


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Posted by TheRub
a resident of Mountain View
on Apr 27, 2014 at 12:28 am

[Post removed.]


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Posted by OPar
a resident of Duveneck/St. Francis
on Apr 27, 2014 at 12:33 pm

Seriously, who can afford to live in Palo Alto *and* run for the school board, but can't afford health insurance (particularly now that Obamacare's kicked in). I mean, seriously, we're wasting time on this?

More to the point, how come we, yet again, put off opening a 13th elementary?


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Posted by Fred
a resident of Barron Park
on Apr 27, 2014 at 7:46 pm

@Bob - while the Board makes some financial decisions, they do not require special financial expertise, just as they do not require special regulatory or legal expertise. Like many/most boards, they rely on advisers both on staff (the CBO) and outside (like RBC or Keygent). We don't need experts or those with "large assets" (does that make them experts?). Instead, we need thoughtful people who will ask good questions and listen carefully to the answers.

The current Board's treatment of the bond financing is a good example. While you are right that the Great Recession wrecked havoc to the 2007/08 bond forecasts, the Board responded by changing course, rejecting the planned "tax continuation" approach (with high-priced, pay-later bonds) and instead temporarily raising taxes to minimize the cost of borrowing. They examined the problem, listened to input, and made clear decision.

I don't see much merit in paying for health insurance for Board members. But I see even less merit in using wealth as a qualification.


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Posted by ThoughtPolice
a resident of Mountain View
on Apr 27, 2014 at 8:22 pm

[Post removed due to same poster using multiple names]


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Posted by ThoughtPolice
a resident of Mountain View
on Apr 27, 2014 at 9:45 pm

[Post removed due to same poster using multiple names]


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Posted by Bob
a resident of Another Palo Alto neighborhood
on Apr 28, 2014 at 9:03 am

> while the Board makes some financial decisions,
> they do not require special financial expertise,

Where financial acumen is concerned, there is "special" and there is "basic". The general premise of this discussion is that people elected to positions of power do not need any knowledge of finance at all has led us to a state where much of our government (at every level) has failed in its basic role of a fiduciary of the public's money, and trust.

> While you are right that the Great Recession wrecked havoc to the
> 2007/08 bond forecasts,

The recession did not wreck their Measure A forecasts—which were actually RBC (Royal Bank of Canada's) forecasts. The Board sat like bobble-headed dolls on the dashboard of a pickup truck, and simply rubber-stamped everyone one of RBC's claims—which predicted that the aggregate value of the PAUSD's real estate would double in value every ten years for the next forty years. RBC provided no realistic forecasting tools, other than a projection of the aggregate value of the PAUSD's residential and commercial property values back a couple of decades, and a straight-line projection forward into the future far enough to meet their claims about bond repayment.
No one on the Board had any questions at all—because it was clear at the time that none of these people had the slightest idea what the RBC front-men were saying.

Even if the recession had not come along, this issue of raising the tax rate in order to pay down the bonds would have had to have happened anyway, because the reality is that at some point the property values are not going to double every ten years. (Remember, Recessions using last about eighteen months; these Bonds have a forty+ year lifetime.)

> They examined the problem, listened to input, and made clear decision.

A group of residents came to this conclusion based on doing some realistic modeling. The Board showed no more understanding of their work than they did when they approved the RBC pitch.

> But I see even less merit in using wealth as a qualification.

This has been a uniquely American point-of-view, based on our being so committed to "democracy". But is it true that people with no access to wealth, or experience with managing money, make better, or at least equally good, decisions than those who have such access? You have stated your opinion (based on factually inaccurate data, in my opinion), and I have stated mine. Let's look at a couple of other well-known, local, examples of how elected officials have failed in their oversight/fiduciary duties:

Financial Abuse, Mismanagement Leave Richmond Housing Agency Near Takeover:
Web Link

Mt. Diablo School District facing state takeover:
Web Link

Web Link

This article reports that a deepening fiscal crisis confronting the school system in Richmond, California is leading to the first direct state takeover of a district in California history. In response to the budget problems faced by Richmond district, local lawmakers are drafting legislation to provide at least $25 million in state loans needed by the district to avoid bankruptcy by the end of this school year. Richmond's current budget woes started even before School Superintendent Walter Marks arrived in 1987 with his school-choice plan, which he promised would bring dramatic improvements.
---

And of course, we are looking at municipal bankruptcies (City of Richmond, Stockton, etc.) and massive fraud (City of Bell). Whatever local control via elected officials was supposed to mean in terms of insuring well-run government clearly failed in all of these situations.

It might not be prudent to claim that all of these glaring failures (and others not listed) would not have occurred if a "wealthy" group of men and women had been sitting on the various Boards and Councils—but it would be very interesting to review the backgrounds of those that were sitting when these failures occurred. Best guess would be that they didn't know what was happening then, and still don't know what happened after the State takeovers and bailouts.


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Posted by JQPublic
a resident of Crescent Park
on Apr 28, 2014 at 9:35 am

Baloney. Shame!

Any school board member/prospective member can go to the ACA (Obama-care) exchange if they don't have health insurance from another source.


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Posted by David
a resident of Midtown
on Apr 28, 2014 at 11:01 am

Board members should be allowed to purchase coverage, not have it be an additional benefit.


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Posted by jerry00
a resident of Barron Park
on Apr 28, 2014 at 11:07 am

No more of these endless benefits for city employees or school boards. The city has a tax surplus now and the money is just burning a hole in their pockets trying to find new things to spend money on.
Wherever the money may come from, ultimately it comes from the taxpayers. Stop spending money on anything new.


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Posted by Chris Kenrick, Palo Alto Weekly Staff Writer
a resident of Old Palo Alto
on Apr 28, 2014 at 11:38 am

I've received a clarification from a school board member about information on school board stipends that was published in the above article. The new information differs from what was published in the 2009 grand jury report: The Palo Alto school board receives, collectively, about $22,000 in stipend money each year. Each board members gets a stipend of $400 per month in which they meet, amounting to $4,400 per member per year. The board does not meet during the month of July.


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Posted by Parent
a resident of Professorville
on Apr 28, 2014 at 11:45 am

Part time employees at the Palo Alto School District barely get health benefits and anyone who works under 20 hours a week get none. I see no reason whatsover that Board Members should get health benefits. All our board members live in Palo Alto. If you can afford that you can afford to sign up with Obamacare for health benefits.


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Posted by John B
a resident of Barron Park
on Apr 28, 2014 at 11:52 am

It seems these board members must be wealthy in order to serve. Why not provide health care which will allow people from other economic levels to participate?


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Posted by Fred
a resident of Barron Park
on Apr 28, 2014 at 12:36 pm

@Bob - I agree that "basic" financial literacy is a fair criteria, just as basic financial, educational, etc., literacy, and general intelligence, should be. I'm not aware of any board members that do not possess a basic level of understanding.

You wrote:

"A group of residents came to this conclusion based on doing some realistic modeling. The Board showed no more understanding of their work than they did when they approved the RBC pitch."

This statement not quite correct in my view. Yes, a group of residents (working with district staff and advisers) did bring forward a different view and recommendation. I would say the Board understood it quite fully, which caused them to change course and raise the tax rate, which was not anyone's initial desire. Why do you think they did not understand the issue?

I'm sure we can find examples where wealthy, middle-income, and low-income elected officials make good and poor governing decisions, in terms of financial management and anything else. I'm not sure that a small sample set actually tells us much. In any case, I don't see lack of financial literacy as a big problem for the PAUSD board.


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Posted by Peter Carpenter
a resident of Atherton
on Apr 28, 2014 at 2:30 pm

Peter Carpenter is a registered user.

"Why not provide health care which will allow people from other economic levels to participate?"

1 - Because the very part time work of board members does not justify that benefit,

2 - And the absence of such a benefit precludes no one from running for this office.

3 - IF someone ran for this office in order to get this benefit hopefully they will not be elected - that is not a worthy qualification for a public office seeker.


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Posted by Bob
a resident of Another Palo Alto neighborhood
on Apr 28, 2014 at 2:50 pm

@Fred wrote:

> I'm not aware of any board members that do not possess a basic
> level of understanding.

How in the world can you, or anyone, make that sort of claim without having actually quizzed each of the Board members with a standardize test probing Board Members financial knowledge?

> This statement not quite correct in my view

Perhaps. The information that was developed was from the so-called Board Oversight Committee. Apparently, one member is a Professor of Finance at Stanford, and it is likely that all of the calculations (if such calculations actualy exist) came from him. There is little in the public record as to how the details of the decision actually were formulated--but no doubt someone on that Committee could fill in the details. There was little in the public record about the contributions of PAUSD employees, or elected officials.

> I would say the Board understood it quite fully ..

And I would say the opposite. I would go one step farther, and suggest that if anyone of the Board were asked to provide a detailed explaination of what happened, compelete with the before and after bond paydown schedule--not one of the current, or past Board could provide that information unless prepared by someone else.

> I don't see lack of financial literacy as a big problem for
> the PAUSD board.

You have your opinion on this matter, and I have mine. I will, however, predict that the next time we have a valid school board election that there will be NO discussion of financial matters of the past years, or the future ones. Should that prove true--it's difficult to trust the opinion of someone who likes to believe that little financial expertise at the Board level is sufficient for a school district that will soon have a yearly budget of $200M.


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Posted by weekly reader
a resident of Monroe Park
on Apr 28, 2014 at 3:30 pm

There are definitely people who would run for school board if health benefits were available because they would not need to do other things to get the health care. I don't see the problem with covering ONLY the board member and ONLY while they are in office. NO family or extended coverage. It might enable people from groups who really need representation to run.


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Posted by Fred
a resident of Barron Park
on Apr 28, 2014 at 4:15 pm

@Bob, I have met with the all the current members at one time or another, as well as many previous ones, and have had discussions about financial issues facing the district. So my opinion is a somewhat informed one. Since we won't start testing candidates on financial literacy anytime soon, I think this is the best we can do to determine if people are up for the job. I agree with you, though, that if it seems that someone was totally ignorant of financial concepts, that would be a problem (just as if they were ignorant of legal concepts, for instance).

"I would go one step farther, and suggest that if anyone of the Board were asked to provide a detailed explanation of what happened, compleete with the before and after bond paydown schedule--not one of the current, or past Board could provide that information unless prepared by someone else."

Of course you are correct - but as I thought we agreed, the Board members don't need to be experts, they need to be able to seek expert advice (from staff and outsiders) and make appropriate decisions. Otherwise, only investment bankers and bond underwriters could be board members, and nobody wants that. Am I misunderstanding what you are saying? I do believe based on what was said and how they voted that the board members understood pretty well what was at stake between difference bond types, payback schedules, tax rates, etc.

It is not important, but I think you are mistaken about any professors being on the bond oversight committee - here's a link to the members on the district's web site: Web Link. There's been some turnover of course but I don't believe any previous members were Stanford faculty either. All the calculations that I saw presented to the board on this matter were done by Keygent, the district's adviser, whose data appears to have been available to the oversight committee (which seems appropriate).


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Posted by A Slap in the Face
a resident of Leland Manor/Garland Drive
on Apr 28, 2014 at 6:55 pm

The school board only works part time, and they have other jobs, or their spouses do, that already provide health benefits. With the new tax laws, being in such a situation can cause a family to pay extra taxes on an extra policy such as this. It happened to my sister, who had a health plan through her job while her husband had a plan through his, and they were each on each other's plans.

To make matters worse, there are plenty of part-time city workers who have NO health benefits for the simple fact that they work part-time, thus the city is not required to provide health benefits for them. If the part-time school board receives health benefits, it is a real slap in the face to the other city workers not hired full time so that the city does not have to provide such benefits.

Get a conscience, people!


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Posted by Sunshine
a resident of Barron Park
on Apr 28, 2014 at 10:26 pm

We now have ACA for healthcare. If you are not well enough off to purchase health benefits on your own you can get help from the government exchange to get it.
School board is part time. How many other part time city employees receive health benefits? School board is a part time job. Board members should not receive any benefits that other part time employees do.
In other words--forget about it! Too many city employees are feeding too well on the city coffers. No city employee should receive higher pay or benefits than a comparable non-city employee.


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Posted by Kyle
a resident of Barron Park
on Apr 28, 2014 at 10:43 pm

I think the commenters that complain about part time school staff being under compensated are the sames ones that vote down any school bonds that come their way.

Sorry folks. It's ridiculous how little we fund education. I think if we had less wealthy supervisors, we would have better performance by drawing from a larger pool of candidates.

It's. That. Simple.


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Posted by HUTCH 7.62
a resident of Old Palo Alto
on Apr 29, 2014 at 4:56 pm

Whats wrong with Obamacare?


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