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By Tim Hunt

Superintendent's new contract may portend difficult employee negotiations

Uploaded: Aug 16, 2018

Pleasanton school district trustees clearly value the leadership of Superintendent David Haglund.

When they re-wrote his contract on July 1, they extended it to four years and have the option of renewing it every June after his annual review.

The challenge for trustees and management will come when they sit down with their employee unions. For his first year in Pleasanton, Haglund received the same 2 percent raise and 1 percent bonus that went to the teachers’ and classified employees’ unions.

The new contract for the superintendent built in 4 percent raises each year. That’s good for Haglund personally, but likely will become the starting point for the employee unions when they sit down to negotiate. As former trustee Kathleen Ruesegger pointed out, giving that level of raises to both employee unions as well as management, will be a major challenge going forward, even with the growth in state funding. School funding is up 46 percent per student since 2012.

Gov. Jerry Brown has warned in his budget message for several years that the state is overdue for a recession (the nine-year expansion is one of the longest on record) and once that happens, revenues will plunge. Even with the rainy day fund that the governor will hand off to his successor, a modest downtown will cost the state billions.

Even with continued economic growth, the issue for Pleasanton and districts across the state will be the soaring cost of employer contributions to the State Teachers Retirement System. The systems investments have performed well in the last two years with 8 percent returns that exceeded the assumed 7 percent. That said, it still has not overcome the Great Recession. The fund is worth $223.8 billion with an unfunded liability of $107 billion.

Four years ago, the Legislature and the governor passed a plan to deal with the problem. Employee pension contributions increased from 8 percent to 10 ¼ percent. For school districts, the number climbs from 8 percent in 2013 to 19 percent in 2020. Studies by the state Dept. of Finance and the Legislative Analyst show that about one-third of the increased funding in the last three years went to pension costs and they expect that to be half in the next three years.

Those increasing fixed costs will squeeze the budget for raises for people. Given that salaries take more than 80 percent of school district budgets, bringing budgets into balance will be a huge challenge. There’s only so much program that can be cut from the remaining 20 percent of the budget (and some cannot, for instance utility costs) before it will take personnel cuts.

A story in CalMatters quoted a state school boards official saying they need more revenue to close the gap. Urban districts such as Los Angeles and Oakland, with declining enrollment, face particularly vexing challenges.

Cities also face similar increases in pension contributions because the Public Employees Retirement System has a similar unfunded liability. The difference is that schools have no ability to raise additional revenue without going to the voters, while cities can tap several different revenue streams.

Incidentally, despite criticism about principal turnover online, that didn’t prompt anyone to toss their hat in the ring for the school board. Incumbents Joan Laursen and Mike Miller filed for re-election and did not draw a single challenger.

Presumably, their fellow trustees will save everyone some money and re-seat them without having them run unopposed.

The Tri-Valley’s Congressman Eric Swalwell is running for re-election to the House, but he’s also certainly working hard to build a national profile.

Casey Tolan, in an East Bay Times article Aug. 12, noted how much time Swalwell has spent on TV and in Iowa. He was born there where his dad was a police chief and moved to California when he was five. Matier and Ross reported in the Chronicle that Swalwell was interested in running.

One of his primary opponents, Brendan St. John, pointed out Swalwell’s Iowa activity when we chatted before the June election and his November opponent, Rudy Peters, was quoted criticizing it. Given the Democrat registration in the district, Swalwell has little to worry about come November.

That frees him up to be a talking head on cable tv channels. Given the endless Mueller investigation into Russian involvement in the 2016 election and his role on the House Intelligence Committee, Swalwell has done more than one TV appearance daily this year. In 2016, Tolan reported he did 28—it was 282 in 2017 and 233 this year.

He’s also spent more time in Iowa and does not deny his interest in running for president. His campaign staff has purchased Swalwell2020 and SwalwellforAmerica domains, just in case.