Palo Alto school board discusses budget projections, planning

Chief budget officer presents two less conservative scenarios for property tax growth

In a departure for a school district with usually conservative budget projections, Chief Budget Officer Cathy Mak presented to the Palo Alto school board Tuesday night two forecasts of district finances, using slightly higher 3 percent and 5 percent property-tax increases.

Mak typically uses a more conservative 2 percent property-tax increase as her base, though the actual percentage of revenues often turns out to be higher. She presented Tuesday night two scenarios for district revenue and expenditures over the next five years: 3 percent growth for all five years and 5.24 percent to 5.46 percent for each year, with the latter being the rate the City of Palo Alto uses in its projections, she said.

Property taxes also make up the majority of district revenue – at this point in 2014-15, it accounts for 71.5 percent of revenue, Mak reported.

Board Vice President Heidi Emberling, noting that this was the first time that Mak presented the board with two property tax scenarios, asked if she intended for the board to adopt one or the other or what discussion she was hoping the board would have around the change.

"We're providing this range so you can get a feel," Mak said, adding that she won't use the minimal 3 percent increase for the 2015-16 budget because it's not enough to cover increased costs.

"I feel comfortable using a growth number that's higher than 3 percent for next year," she said. "As for the out years, in our projection, we will continue to provide the two scenarios."

Board member Terry Godfrey said she appreciated having multiple projections so the board can have more informed discussions about different budget scenarios.

"I really like the scenarios very much," Godfrey said. "I hope that when we come to the spring and we're doing this again we do still have multiple scenarios – one of these, the worst-case scenario, whatever that is, and one a little more realistic, optimistic scenario so that we can have some discussion around if the worst-case happens, what has to go."

Board President Melissa Baten Caswell warned that the board should stay conservative – even the lower 3 percent is not the worst-case scenario, she said.

"Worst-case scenario is that we either have no property-tax growth or we go backward. ... That's not going to happen in the next year, but a lot of economists are saying that we're in the top of the cycle right now and you can only expect an up-cycle to last for so long," she said. "I think it's just really important that every year we re-check in. We don't want to be in a situation where we projected we're going to have 5 percent growth and we have -1 percent."

Baten Caswell also said despite the rosy-looking financial picture for California education – the district is slated to receive additional funding from the state's proposed 2015-16 budget for Common Core State Standards implementation, adult education and the Local Control Funding Formula (LCFF) – there's not much cause to celebrate in Palo Alto Unified, where per-student funding has failed to keep up with inflation as enrollment continues to rise.

Though total revenue is up 20 percent since 2008, funding per student has only increased by 10 percent, according to district figures.

As federal and state funding decreases and stays flat, the district continues to lean on local sources of funding, primarily property tax revenues, the existing parcel tax, which voters will be asked in May to renew and increase, Partners in Education (PiE) fundraising and money from the district's leases.

Mak also reported Tuesday that a projected $4.9 million surplus this year has been reserved for employee compensation and new or enhanced programming for school sites. Several board members expressed concern about the timeline for allocating this money, as the employee compensation chunk of this surplus is for this year and retroactive once a union contract is ratified, while program additions are for next year.

The surplus also comes at a time when the district has many moving pieces on the horizon, from recommendations coming this May from the superintendent's minority achievement and talent development committee to a new enrollment committee who could suggest the board look at opening a 13th elementary school or fourth middle school.

"I just don't want to be in a position where I'm making decisions to spend money when we don't have all the options on the table because I don't want to spend money on 'X,' 'Y,' 'Z,' thing when (the committee's) recommendations might be so great that we need to take all of them," Godfrey said.

Board member Ken Dauber suggested that the board hold a study session to design a more thoughtful, conscious budgeting process to avoid being in a position where "big-ticket" items that the board is interested in investing in don't lose out on funding due to timing.

Mak will return to the board in May with updates on the state budget and property tax, and the board is set to vote on the 2015-16 budget in June.

In other business Tuesday, the board unanimously approved a pilot Mandarin-immersion program for Jordan Middle School, an incremental victory for district families hoping to fill the gap in Chinese language instruction between elementary and high schools.

The program is slated to begin this fall with one section for sixth-graders. Director of Secondary Education Katherine Baker clarified that the program will only launch if there are enough students to create a class. The standard number is 24 students, though the class could start with 20 students – or even fewer, Baker said. She will return to the board in June with exact figures on enrollment, curriculum, teachers and textbooks.

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4 people like this
Posted by 800 LBS Guerrilla
a resident of Gunn High School
on Feb 25, 2015 at 10:46 am

Hopefully the heavy burden of Teachers and Administrators pensions will be on the table as it relates to the "Budget" . What % goes to that vs to the classroom and paying current teachers ? Maybe the Board could think of a new compensation program, higher current pay now, and retirement is up to the teachers --- isn't that what almost anyone in the private sector has to deal with ? Will we just watch that huge future payment obligation grow and grow ?
Probably, as it takes courage and leadership to tackle the tough problems.

5 people like this
Posted by hard to believe
a resident of Another Palo Alto neighborhood
on Feb 25, 2015 at 10:49 am

Our special ed resource classrooms were demolished during the Skelly administration. One excuse was that they were too small. Now the Mandarin classes will be allowed to go with under 20 students. Way to show compassion and comply with the law Baker, McGee and PAUSD!

Where are you Ken Dauber? Melissa?

Like this comment
Posted by Together We Move Mountains
a resident of Another Palo Alto neighborhood
on Feb 25, 2015 at 12:49 pm

@hard to believe,

There are many grievances left over from the Skelly years, and unfortunately also the Asst Superintendent and Head of Student Svcs. Parents of kids with special ed and 504 needs are often overwhelmed but need to take these issues up again with the new Superintendent because no one else will. That means each person needs to take it on themselves to do so because unless everyone does, no one will. However, expect McGee to listen to The Leftovers, sad as that is. Form coalitions, though, I see a lot of parents fighting these battles on their own and being marginalized (especially by The Leftovers). We don't even have a parent advocacy group for kids with 504s anywhere like the advocacy group for IEP's in this district, and it's no wonder the latter usually have better experiences (though far from perfect).

2 people like this
Posted by did you know
a resident of another community
on Feb 25, 2015 at 1:27 pm

Teachers in California do not pay into social security due to a decision made at the federal level. Their pension is their only source of retirement, something that they pay into as well. Teachers portions of what they will pay into STRS will increase to almost 10%. Teachers who worked in the private sector prior to coming into teaching are not able to draw on their social security benefits at the same level as those who work private sector. It is reduced substantially as is any benefit that they might receive from their spouse through their social security. Look into social security offsets if you don't believe what I'm saying.

When decisions are made about salary increases, part of the discussion includes the amount the district pays into STRS or PERS (for classified) as well as benefits and decisions are made about how much of an increase teachers and other employees should reasonably expect. This means that over the years, raises are generally less because we know that we are deferring some of that because of our pension costs.

Finally, staff costs are always going to be the majority of the budget when it comes to education. Of course, those costs can be reduced if you want class sizes of 40 or 50 or more and reduction of other programs that enhance the learning of students.

4 people like this
Posted by Marc Vincenti
a resident of Gunn High School
on Feb 25, 2015 at 1:40 pm

Dear Palo Alto Onliners,

The usual excellent, focused reporting by Ms. Kadvany and her paper. My thanks to both.

Though less central to last night's meeting, three adults who came to the microphone during Open Forum spoke about the current bleak and even desperate feelings of Gunn's teachers, who, in the wake of our most recent suicide and the Superintendent's edict on homework, feel exhausted, abandoned by the community, and frightened.

Many, many of Gunn's teachers are talking about leaving the school as soon as possible.

This would be another and even more grievous loss to our city, since all of the current freshmen and sophomores and juniors who've formed attachments to such teachers would have those ties severed.

This might put these children at even greater risk—more of their "social and emotional support network" shredded.

The staff, too, would lose attachments to colleagues who have been through the worst with them this year (three more deaths), and might have otherwise been sources of support.

I believe this a serious situation for our community.


Marc Vincenti
Gunn English Dept. (1995-2010)

6 people like this
Posted by Cpm
a resident of Crescent Park
on Feb 25, 2015 at 2:26 pm

Hi Mr. Vincenti - I was not at the meeting last night. Can you please explain how the suicides and homework edict are making the teachers feel alone and frightened?

Thank you!

4 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 25, 2015 at 2:31 pm

Dreadful situation, on the one hand they are looking for more money and on the other hand they are voting yes on extending a program into middle school for lucky lottery winners.

I at least would have liked to have some indication on how much this program was going to cost us. I want to know if they will be hiring a new teacher specifically for these 20 students. I want to know how much the text books and other materials are going to cost us. I want to know how this expense can be justified to voters expected to vote yes for the parcel tax.

1 person likes this
Posted by R Wray
a resident of Palo Verde
on Feb 25, 2015 at 3:06 pm

Why don't they just cash it in; enough of government schools. We need some innovation. Let the private sector take over.

5 people like this
Posted by Moses
a resident of Palo Alto High School
on Feb 25, 2015 at 4:49 pm

@vincenti laments the direction set by " the Superintendent's edict on homework, feel exhausted, abandoned by the community, and frightened."

If they feel abandoned and frightened by the homework edict it is because they have discordant views on homework. The community has spoken clearly. The homework committee has spoken. The Board and the Super.

They can resolve the discord by joining the community and making this edict a success. That will resolve their fear and abandonment. Please join us to make this a success.

OR ...

Let the unhappy people go.

We need teachers who are in agreement with the community, board and superintendent. The sooner they resolve this discord, the sooner we get teachers aligned with our goals, and the sooner we have happy teachers in the classroom.

Some may be new happy teachers. That's okay too.

4 people like this
Posted by Is that PAEA on TV?
a resident of Juana Briones School
on Feb 25, 2015 at 6:26 pm

We saw the PAEA reps for our school at the earlier board meeting when the female teacher droned on about her daughter, and the male teacher seemed to fixate on homework, but only at the high school. Now we are seeing Gunn teachers basically threatening us with leaving because they feel bad. Well, you know what? We all feel bad because too many of our high school students have committed suicide. We are all in this together and we are all to blame, if we are truly a community, so save the pity-party, perhaps for a new district. It is unseemly to have these teachers come up and act this way, all of them. I welcome a counterpoint, provided the bulk of this comment doesn't become post removed.

8 people like this
Posted by fail
a resident of Adobe-Meadow
on Feb 25, 2015 at 6:58 pm

Since the last election, there has been:
- 2 suicides
- A switch by the board/staff to link homework to the suicides
- By proxy, a link to blame teachers for the suicides via the homework policy
- Teachers going to the board to point this out (and above posters saying they should just leave)
- A decision to start MI in middleschool even if the class attracts less than 20 students when other electives are cancelled if less than 24
- No progress on FLES even with this MI extension
- A brown act violation

I feel really let down by the progress since the last election. This has got to be the worst start ever by a new PAUSD board. Where is the leadership we were hoping for?

5 people like this
Posted by There Once Was a Union Maid
a resident of Adobe-Meadow
on Feb 25, 2015 at 7:29 pm

"By proxy, a link to blame teachers for the suicides via the homework policy"

No one associated with the board or the district -- indeed, no one responsible has blamed teachers. That is a complete concoction. No one blamed teachers last time either -- some people wanted to hold Skelly responsible for his own failure to act energetically enough, and wanted to hold Charles Young responsible for doing too little and doing it badly. Sounds about right to me.

Teachers, however, have cynically manipulated these suicides to try to stuff their hands into the till. The real point of last night's theatrics was blasted across the front page of the Post today: teachers want more money! That was also the point of the dramatic and tearful speech by the teacher at Briones: pay teachers more, they are suffering so give them more money.

Not coincidentally of course, the district is in contract negotiations with the teachers union right now, and all this is just a cynical misuse of the suicides to bolster their bargaining position. It is likely that VIncenti is an unknowing dupe of his Gunn friends, who are using his willingness to be out front to get him to manipulate him into helping their bargaining unit. Not coincidentally, it is the Gunn teachers who filed a grievance against the district for asking them to use Schoology. In other words, don't ask us to do anything, just fill our cups. If you want anything like compliance with district policy for your money? We'll howl that you are "blaming us." Why not? It worked in 2012.

The teachers at Gunn are definitely stressed. So am I. So are our kids. Tell you what, if you give them all an A and don't ask them to do any work for the rest of the year, I think the board should pay you without requiring you to do your job too. Deal?

2 people like this
Posted by disingeneous, what?
a resident of Crescent Park
on Feb 25, 2015 at 7:53 pm

"No one associated with the board or the district -- indeed, no one responsible has blamed teachers. "

Of course they're not. Well, not directly anyway. That would be, you know, the meaning of the word "proxy".

7 people like this
Posted by There Once Was ...
a resident of Adobe-Meadow
on Feb 25, 2015 at 7:59 pm

First, that's not what "proxy" means. I think you mean "by implication." But that also didn't happen.

Instructing teachers to implement a district policy that was adopted in 2012 that they are required to carry out isn't blaming them for anything. It's informing them that they have to follow district policy (which, to be honest, they already know).

It's a nasty bit of work to attack Max McGee for trying to do his job and get district policy to be followed by the teachers and admins who are getting paid good money to follow it. I am sure that if you look at the contract what you will see (in addition to the salary schedule and the step increases and the benefits and the pensions and the seniority and the job security and the tenure after 2 years) is the fact that you have to follow district policy.

This policy was adopted 2 years ago. Just follow it and stop complaining. No one is blaming you for suicides. We are blaming you for our kids having too much homework, which is actually your responsibility to address.

9 people like this
Posted by neighbor
a resident of Another Palo Alto neighborhood
on Feb 25, 2015 at 8:05 pm

I find it very hard to believe that highly paid tenured teachers in the prestigious Palo Alto Unified School District will leave if they are not paid extra, at one particular school. I seriously doubt it. And what's more, I am tired of people forgetting that PALY went through a sad period of student suicides also. Challenges are district wide here at the high school level.

3 people like this
Posted by symptoms
a resident of Fairmeadow
on Feb 25, 2015 at 8:06 pm

Nothing wrong with telling teachers to adopt board policy. Plenty wrong with linking that lack of adoption to suicides. Not great work by the board.

Not surprising really. It's a lot easier to attack something they understand and ignore the repercussions of who they end up blaming than deal with actual causes they can't see.

Mental health is a lot harder to deal with. Homework is easy and makes them feel like they are doing something. Depression is more likely to be caused by mold than homework.

4 people like this
Posted by Focus, please
a resident of Another Palo Alto neighborhood
on Feb 25, 2015 at 8:12 pm

Step up, Palo Alto teachers, step up for our students, don't whine because it's not always about you.

Like this comment
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Feb 25, 2015 at 11:12 pm

One can imagine many things that the teachers might ask for that would help the students.

More money for the teachers ("combat pay" some might say) would not seem to help.

I believe our teachers are more compassionate and more sensible than to believe that getting more money would better enable them to deal with these sad situations.

4 people like this
Posted by Focus, please
a resident of Another Palo Alto neighborhood
on Feb 26, 2015 at 6:02 am

I viewed the archive of last night's meeting and the Open Forum was disturbing. I saw Marc Vicenti say what he basically wrote above, then I saw Kara Stoneburner speak while apparently in some form of tears. This was a change from when she spoke two weeks ago when she seemed in better spirits. And she did say the teachers, just at Gunn I believe, deserve hazard or battle pay. I won't comment on that. A few speakers later, the union president, Teri Baldwin came up for a shout out, in her words, for the teachers who attended Edcamp, which she noted was on a Saturday, which she said showed that teachers give up Saturdays. She also mentioned a photograph of Edcamp and that it was shown for only a little bit so Max McGee interrupted her and directed his staff to find the photograph on the slideshow and display it. Baldwin then said that teachers were feeling attacked, to which Melissa Caswell interrupted and responded to this non-agenda item at length to tell Baldwin how much she appreciated teachers. You can check the recording for yourself.

6 people like this
Posted by There Once Was a Union Maid
a resident of Adobe-Meadow
on Feb 26, 2015 at 7:16 am

Yeah that's because the board is about to give away the store to the union once again. Didn't you see the slide when the CFO put up that there is $5 million for salary increases? Nice bargaining strategy, Dr. McGee to announce to the union president how much money has been budgeted for their pay increase. Why even have collective bargaining? The "district" bargainer is married to a teacher who will receive the increase. All the admins, including the bargainer will get the same increase by tradition, also. So they are effectively rewarded for how much of our money they give to themselves and each other. How cozy.

I have no problem with paying teachers more. But I have a huge problem with hearing from them about how it's unfair and blaming them and picking on them to want them to follow district policy, use Schoology, post assignments online, and do their part to de-stress our kids. All this stuff about "hazard pay" would be a lot more convincing if the Gunn teachers were not teaching advanced and AP math at 7:00am. Zero period is proof that you do not care about following district policy. [Portion removed.]

Like this comment
Posted by proxy war
a resident of Downtown North
on Feb 26, 2015 at 8:04 am

"to which Melissa Caswell interrupted and responded to this non-agenda item at length "

The open forum is to address non-agenda items. Hence the name. Shocking, I know, for a board member to support teachers.

I like "maid's" comments, "no one responsible has blamed teachers" they are only "implicated" in the suicides!

Posted by Name hidden
a resident of another community

on Feb 26, 2015 at 8:35 am

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?

1 person likes this
Posted by proxy war
a resident of Downtown North
on Feb 26, 2015 at 9:30 am

Actually, I now see "Focus's point: Web Link

"If you wish to address the Board on an item that is not on the agenda, you may speak during the Open Forum which is scheduled to occur immediately following approval of the Consent Calendar (approximately 6:45 p.m.). Board members are legally prohibited from discussing non-agenda items and, therefore, cannot respond to items presented in this venue."

4 people like this
Posted by Former PAUSD parent
a resident of Adobe-Meadow
on Feb 26, 2015 at 12:34 pm

Two separate comments:

- If PAUSD parents at large treat teachers the way they are treated by people on these threads, I would not be surprised to see teachers leave in droves from this town. I would not want to be a teacher in Palo Alto schools, given the parents' general attitude towards them.

- Given that the district's financial situation is rosy, as was predictable given real estate prices, I see absolutely NO reason to vote for the proposed parcel tax. Please, vote no.

5 people like this
Posted by Wayne Martin
a resident of Fairmeadow
on Feb 26, 2015 at 2:32 pm

> Teachers in California do not pay into social security due to
> a decision made at the federal level. Their pension is their only source of
> retirement, something that they pay into as well.

This sort of statement comes up time and again, during salary negotiations where employees are represented by Unions. The statement about Social Security turns out to be true, but meaningless, when evaluated by comparing the SSA payouts against CalPERS/CalSTRS payouts.

According to the SS Dept. the average SS Payout is about 1,200 a month. Using data from “Transparent California”, the following is the actual pension payout data for the PAUSD:

Agency Average Pension # People On Pension
PALO ALTO UNIFIED $76,107.90 537

Keep in mind that most people have to work 35-40+ years, 40+hours a week, in order to qualify for SS payouts. CA government workers, on the other hand, can retire at 30 (or fewer) years, and many retire at less than 30 by buying what is called “airtime” (a trick that allows employees to buy five years of pension qualifying service years without not having to actually work those years).

So, the SS payouts are between $14,000 and $20,000 and the PAUSD payouts average $76K. So, why would this teacher want to be in the SS program?

There is also the issue of employee contributions. SS has always required worker contributions. The CalPERS/CalSTRS also require contributions, but many government entities in California have paid these yearly contributions, for their employees. With the lavish salaries that government workers have enjoyed since 1998, we now see a growing number of government employees being paid over $100K, and many now pushing $200K, most government employees are not being asked to contribute to pensions, which has made many government employees at least "cranky"--believing that they have "earned" their pension and should not have to contribute to it.

There are over 400 people on staff at the PAUSD knocking down over $100K a year (before benefits are added in). So, it’s not hard to expect the average yearly pension payout to soon push $100K—which has to be paid by someone.

Of course, how many of these PAUSD employees will go the distance, and actually put in 25-30 years is an open question. The data above suggests that there are about 750 people currently drawing pension payouts claiming the PAUSD as their employer of record. One can only wonder how long it will be before the PAUSD has more people drawing pensions for 30-50 years, having worked 180 days a year for 25-30 years, than it has on staff, actually working?

So—it is very difficult to accept claims that California government employees don’t get Social Security—when they are already getting 5 to 10 times what Social Security would pay under similar circumstances.

> Their pension is their only source of
> retirement, something that they pay into as well.

This statement, of course, seems to suggest that teachers can not invest in stocks/bonds/businesses, like everyone else in the real world. The truth is that teachers are not banned from using their money to increase their wealth just like bricklayers, doctors, and clerks. And then there is the retirement benefits from a two-earner family. Suggesting that teachers will not marry people who work, and accrue retirement benefits, doesn’t make much sense—and is clearly not true.

Oh, and by-the-way, using the $76K average pension payout, a modest 2% COLA, and simple compounding for the COLA, a teacher will likely see over $2M over 30 years of retirement. For most people, who are now going to have to pay increased parcel taxes and work perhaps into their 70s to keep from losing their homes—this largess for teachers is going to become a bigger, and bigger, load to bear for all taxpayers.

Like this comment
Posted by did you know
a resident of another community
on Feb 26, 2015 at 3:07 pm

Mr. Martin,
How many Palo Alto teachers can afford buy a home in the community they teach in making $100,000 a year?

I always hear how great teacher pay & benefits are - yet, California is having a really hard time finding people willing to enter the teaching profession. If working "only" a 180 days a year is so easy, why don't more people want to do it?

Palo Alto "progressives" are starting to sound more and more like Orange County conservatives with their attacks on teachers.

2 people like this
Posted by Moses
a resident of Palo Alto High School
on Feb 26, 2015 at 10:13 pm

... That's an odd statement. There are three teachers living within 3 blocks of my house.

Sorry, but further commenting on this topic has been closed.

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