News

Palo Alto school board asks for multiyear, ongoing impact of tax shortfall

District plans to reopen contract negotiations with labor unions

All five Palo Alto school board members agreed during a special meeting Wednesday afternoon that finding the most fiscally and educationally sound path forward from a sudden $3.7 million budget shortfall, due to lower-than-anticipated property-tax revenue, must include careful consideration of the ongoing impact of the revenue drop beyond just this year.

Multiyear budget projections were absent, however, at Wednesday's study sesssion, though several board members said they had made such calculations on their own based on the district's 2016-17 budget, which was adopted in late June.

Chief Budget Officer Cathy Mak said that a multiyear forecast would not be provided until the board's next discussion of the budget in August.

"I'm looking forward to getting closer to what we think the projections are," said board member Camille Townsend. "What are the real numbers? What is the structural, ongoing debt? We really do have to see what the nature of the ongoing problem is."

Echoed board member Melissa Baten Caswell, "We need to figure out if this is a structural problem or a one-time problem."

Wednesday's meeting was billed by district leadership as a time to more fully understand how the Santa Clara County Assessor's Office's property-tax projection came in this month far lower than the district had budgeted for and an opportunity for board members to suggest how to address the resulting budget deficit. The actual revenue shortfall was $5.2 million, but with the elimination of a planned $1.5 million one-time bonus to employees, the result is the $3.7 budget gap.

Wednesday's discussion, however, centered more around process than ideas for where budget cuts can be made.

Given that a driving factor for the decrease in property-tax revenue was $1.1 billion in exempt property from ongoing construction of the Stanford University Medical Center Project, several board members suggested closer collaboration and better communication with Stanford. The project represents the second largest exemption in the state, according to Santa Clara County Assessor Larry Stone.

Trustees also suggested closer collaboration with the City of Palo Alto, which Baten Caswell noted was able to anticipate the billion-dollar exemption.

Board members directed Mak to find out how many more years the district should expect large exemptions due to the Stanford project, which first broke ground in 2012 and is expected to be completed by 2018. They also asked her to produce different scenarios for future years of property-tax growth, weighed against salary increases promised in the district's new multiyear teachers contract.

Leslie Braun, a former longtime college adviser at Palo Alto High School, called for more "tempered" revenue projections given the inevitable size of Stanford exemptions and the timing of when the district receives concrete information about property taxes on July 1, after the district's June deadline for adopting the budget.

"I believe that a more conservative approach to any business analysis by both our staff and our superintendent is imperative," she told the board. "I would rather read about the need to re-budget because of an unexpected windfall rather than an unexpected shortfall."

Mak said the district had historically been "very conservative" in its property-tax projections, but the board's adoption of the three-year teachers contract this spring led to higher-than-usual assumptions about the rate of increase in secured-property tax revenues, which provide about 75 percent of the district's revenue, in order to achieve balanced budget projections.

The district first projected an increase of 11.5 percent for the current year, followed by 9.4 percent and in 2017-18 an increase of 8.4 percent. The adopted budget relied on an adjusted estimate of 8.67 percent growth for the 2016-17 year and 7.83 percent for the 2017-18 year. The district intended to use the City of Palo Alto's estimates "in the 5 percent range per year" for 2018-19 through 2021-22 on secured property only, a staff report states.

"Bear in mind, 2016-17 is the first year that we have a multiyear contract," Mak said. "In past years, we have used very conservative numbers in our adopted budget because we know we don't have the raises in the budget."

In response to a question from board member Ken Dauber, Mak said the 2017-18 estimate would need to be revised to the 5 percent to 5.5 percent range.

Superintendent Max McGee, who participated in the meeting remotely via Skype, said that the district will reopen negotiations with its teachers and classified unions to discuss a 3 percent raise promised in the third year of their contracts (2017-18). The change in property-tax revenue also automatically triggered a safety-net condition in the contract that eliminates a 1 percent bonus for teachers when property-tax revenue is less than the district budgeted by 1.5 percent or more.

While some board members defended the multiyear contracts, others repeated concerns they had previously voiced about the budget implications. Dauber, the only member to vote against the contracts, again lamented that using most of a $8 million surplus in the 2015-16 budget to give teachers a 5 percent retroactive salary increase left the district "without the flexibility we might need to handle whatever surprises we might have."

Townsend reiterated that although she voted for the contracts, she had felt "uncomfortable" agreeing to three years of raises. (She said, however, that she had voted against the contracts in closed-session discussions.) It was an unwise decision for a tax-reliant Basic Aid district that receives property-tax estimates and other financial information late in the school year, she said.

Mak and McGee have preliminarily suggested that the district not transfer $919,000 to the district's Basic Aid Reserve Fund as one means to make up for the lost revenue. Several board members questioned that proposal, given a board policy that requires the district to maintain a reserve equal to at least 10 percent of its general fund.

"It's important for us to know if this (deficit) is recurring or not recurring," Vice President Terry Godfrey said.

Baten Caswell, too, asked for Mak to return with multiyear projections that show the impact of the tax shortfall without the district dipping into reserves.

Dauber criticized the idea outright.

"Reserves are for a rainy day," Dauber said. "It's not raining. It's sunny."

Given this year's 5.5 percent property-tax increase, he said, "We should not be in position where we are going to be using reserves because at some point we're going to need those reserves for an actual downturn."

He urged the district to look at cost savings, such as rescinding a recently approved 4 percent raise for managers and administrators, which kicked in on July 1.

Board members did not discuss in detail Mak's and McGee's other proposals for how to backfill the deficit, which include pulling $1.2 million from unrestricted, undesignated funds in the budget; $1.2 million from bond funds designated for computer updates; $375,000 unused dollars in the budget that had been allocated for the hiring of teachers to accommodate enrollment growth; dipping into the reserves; and putting a temporary freeze on hiring non-teaching personnel (with the exception of special-education personnel whom the district needs to replace, according to a staff report).

The district does not intend to cut funding that has already been approved to lower class sizes or support full-day kindergarten, according to a staff report.

Wednesday was the first of several meetings the district plans to hold regarding the budget. The next will be at a previously scheduled board retreat on Aug. 11.

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Comments

54 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Jul 28, 2016 at 5:48 am

Here is a very, very simple method for future PAUSD budget planning procedures:

Assume that tax revenues for the next year will not exceed the current year's level of funds (less any windfall income). Surplus funds from the previous year can either be saved or applied towards any one-time expenses or projects.

This is not rocket science.


51 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jul 28, 2016 at 9:05 am

It seems to me that there is no drop in tax Palo Altans pay. This is not a tax shortfall, it is fiscal mismanagement.

This makes it sound as if we are the problem because we are paying less tax. What is really happening with our money? If it isn't going where it should be going then it is not our problem.

Please call this a fiscal mismanagement problem, not a tax shortfall. I refuse to accept that I am not paying my fair share of taxes to finance our schools.


24 people like this
Posted by Marie
a resident of Midtown
on Jul 28, 2016 at 9:45 am

Marie is a registered user.

Would it really be that hard to change the date for adopting a budget to July 15? I suppose it makes too much sense to tie your budget approval to when you have the actual numbers.

It might interfere with some vacations but I think that would be a small price to pay to avoid the many many problems caused by using estimates. Closing down from July 15 to Aug. 15 still provides more vacation time than most people have.


63 people like this
Posted by Gobsmacked
a resident of Evergreen Park
on Jul 28, 2016 at 10:14 am

"Multiyear budget projections were absent, however, at Wednesday's study sesssion, though several board members said they had made such calculations on their own based on the district's 2016-17 budget, which was adopted in late June.
Chief Budget Officer Cathy Mak said that a multiyear forecast would not be provided until the board's next discussion of the budget in August."

It has been weeks since McGee and Mak found out that they overestimated PAUSD's revenues and they haven't provided the board with an estimate of the impact in the future? What was the point of this board meeting then?

School board members are making these calculations "on their own"? What is the staff for, then? It takes real gall for McGee and Mak to screw up these estimates, and then refuse to tell the board and the public how big the hole is.

My prediction: McGee and Mak are well aware of the long term impact, and they are trying to dribble out the information over time so that the public loses interest and the outrage is less. According to the Weekly's story the other day, the real shortfall over the next several years is many millions of dollars.

Amazing and outrageous. In any functional organization, these two would be on their way out the door. What kind of boss would tolerate their subordinates hiding facts?


48 people like this
Posted by Apple
a resident of another community
on Jul 28, 2016 at 10:18 am

"Mak said the district had historically been "very conservative" in its property-tax projections, but the board's adoption of the three-year teachers contract this spring required higher-than-usual assumptions about the rate of increase in secured-property tax revenues, which provide about 75 percent of the district's revenue, in order to achieve balanced budget projections."


What?!?! The district had to increase REVENUE assumptions because the board adopted a higher SPENDING plan when it approved the teacher's contract. It was all for the purposes of showing a balanced budget.

That's the wrong way to budget, especially because it clearly misled the public and is why the district finds itself with a large deficit so early into the fiscal year.

It would be interesting to know who changed the budgeting previous "very conservative" projection standards and why.


41 people like this
Posted by Parent of 3
a resident of Charleston Gardens
on Jul 28, 2016 at 10:34 am

"It would be interesting to know who changed the budgeting previous "very conservative" projection standards and why."

McGee owns the budget and Mak reports to him. Forever until this year, the budget forecast had 2% revenue growth - about as low as it ever actually goes. This year McGee decided to introduce a 3 year wage agreement, and voila, a 7% growth forecast supports it. The board all knew this and went along. Blaming Cathy Mak for that is inappropriate; she did what McGee told her to do.


22 people like this
Posted by Midtown
a resident of Midtown
on Jul 28, 2016 at 11:00 am

Hey, just put it on the credit card! That way we can spend money we don't have. And do it quick before the real numbers come in.


51 people like this
Posted by Barron Park dad
a resident of Barron Park
on Jul 28, 2016 at 11:51 am

I am very upset by the fact that this deficit means we might not be able to implement smaller class sizes, hiring more teachers, develop innovative secondary school programs, etc.

I am also upset that the budget surplus we had just a few months ago went COMPLETELY to the teacher union. Can we get out of the multi-year contract and go back to annual contracts, and in the future sign them in July rather than June AFTER we get more complete information from the Assessors's office?

Our good teachers deserve a raise, for sure, but the recent contract just seems to have gone hard over to their side, without taking into balance the needs of our kids.

Who is looking out for the best interests of our kids?


56 people like this
Posted by Voter in PA
a resident of Duveneck/St. Francis
on Jul 28, 2016 at 12:01 pm

Dauber voted against the contract. Is he up for reelection this year? If so he has my vote. Any other incumbents have to be skipped. Time for new blood.


54 people like this
Posted by Sicken
a resident of Barron Park
on Jul 28, 2016 at 12:17 pm

I feel sick that the needs of our schools and our kids are compromised because of the salary increase across the board for the teacher's union.

We paid the parcel tax, on top of the property tax, to help the schools and our kids. And now with a blink of the eye, we have a deficit. This is robbery right in front of us.


27 people like this
Posted by Sicken
a resident of Barron Park
on Jul 28, 2016 at 12:26 pm


I am trying to rationalize this parcel tax-> wage increase->budget shortfall scenario and try to understand the thought process behind.

I had heard on several occasions that "money is not an issue" in school discussions. Do the school/district people from out of town feel that since this is a relatively affluent neighborhood compared to other neighboring towns, or some district far into the midwest, it is then ok to use the school budget more freely and carelessly, since people simply won't care much, and we have plenty around here anyway?

I am totally not making sense of this short history...


19 people like this
Posted by LAHscot
a resident of Los Altos Hills
on Jul 28, 2016 at 12:36 pm

The City of Palo Alto apparently cranked the Stanford construction impact into their numbers; PAUSD didn't. Hmmm - only $1.1 billion in exempt property from ongoing construction AND the 2nd largest exemption in the State. "Collaborate more with CPA," sure. But how about some basic fiscal blocking and tackling, like multi-year projections. Does someone at PAUSD actually talk to the County in advance of receiving something in the mail?


55 people like this
Posted by lower salary for McGee
a resident of Midtown
on Jul 28, 2016 at 12:43 pm

It seems to me that the Superintendent and Board Members need to be up front and take responsibility for this budget shortfall. If budget forecasts are basically 2% a year, that is a good ballmark figure. When the 7% number came forth, there should have been intense questioning and delving into what assumptions were made for such a ROSY picture. McGee is ultimately responsible, he should take a lower salary, as well as other Mgmt. Personnel. I have less and less confidence in our Board and Superintendent to run this District in a fiscally responsible way. Also, who is looking out for the children, that they get their equitable share of any new monies to the District.......not our Board, not our Superintendent.............


33 people like this
Posted by Sicken
a resident of Barron Park
on Jul 28, 2016 at 12:48 pm

McGee is a math major.

I doubt he overlooked all those numbers, projections or probabilities of shortfalls. Like someone commented above, I think this unexpected shortfall story is just an excuse to balance the books back in June, in order to make the case for the salary increase.

I am also losing confidence.


62 people like this
Posted by Board Disrespect Toward Others
a resident of Jordan Middle School
on Jul 28, 2016 at 1:19 pm

Board Attacks
What was disturbing through this year's budget process, and the whole last 4 years, was the disrespect of the Board displayed to those who disagreed. In the contract discussion, Board Members tried to paint policy and budget disagreements as not supporting the teachers. The Union President attacked a Board Member, trying to reframe a budget policy concern as one Board member as unfair not raised in the negotiations. The teacher's contract is the District's largest expense. Everything in the budget relates to it.

Incidents
The Board attack attitude started when the OCR scandal broke. Board members publicly accused both Federal government employees and families of disabled children of committing perjury. This sent a clear message to all families of disabled children in this District the Board was not to be trusted. It is not a safe place. The Board will publicly attack and accuse you in public meetings for raising a true issue about a child's disability which you cannot control.

Unfairness
Board members complained the government, press, and families were unfair to them.

For 4 years, Board members attacked each other, interrupting each other, talking while another Board member is trying to speak, cutting off families of the disabled who approach the Board. Board members get upset at the person trying to speak, not the rude Board member interrupting.

Administrator Complaints About Board
Board members worried District Administrators said it was unfair Board members raised questions Administrators could not answer during their Board presentations. Actually, this meant the employee was not ready to present to a Board. Board members said it was unfair when items on the agenda raised issues and concerns in the press. We often heard the public and press were all wrong, had wrong information and was unfair. What it actually meant was the Board did not do its job of getting accurate information to the public.

Administrator Actions at Board Meetings
PAUSD senior administrators became angry and defensive over Board questions on the Math textbook selection process, arguing with a Board member about what information the Board member held in her hands. One administrator made faces and used a "I can't believe you are all so dumb" tone of voice, saying their representative did not them anything about it. It was painful to watch this. The Special Education review contract, now over a year old with no completion date, had some useful information, but the Administrator controlling it clearly did not want to provide solid answers to Board questions about the huge number of disabled children falling behind in the District, after years of telling us they were all 100% supported and successful, preferring to deflect with "YES AND, the good news is...".

The Results
When Board members were called on their behaviors, they said they did not did not attack or accuse. But it is all recorded in the meetings. Hit rewind.

Here is the trend to note: The party opposed was actually right.

Disabled children really were bullied. The District allowed it with no system to stop it. The revenue really was inadequate. There isn't enough money to pay for the teacher's contract.

Please Reflect
Board Members, please reflect on who this behavior really helped. Not the teachers will not get a 1% payment promised just 2 weeks earlier. Not the low paid Classified staff such as aides who depended on it. Not the Disabled children who were bullied and hurt. Not the families who no longer trust the District.

Now
Board members are the most senior policy official in the District. They ran for election, took campaign contributions, and all said they wanted and can handle this job.
The sit in positions of sacred trust. They were supposed to be the last protection children had.

Everything said and done in the District is the responsibility of these elected Board members.

You can be wrong. You can disagree. Now please, it is time to grow up and be polite and respectful to others.


30 people like this
Posted by Voter in PA
a resident of Duveneck/St. Francis
on Jul 28, 2016 at 3:53 pm

Time for a change. Anybody know new people who are running? I looked up Dauber he is in until 2018 so that is good. Don't know about Townsend, Caldwell and Emberling, whether they are running again.


62 people like this
Posted by Vote them out
a resident of Terman Middle School
on Jul 28, 2016 at 5:01 pm

I remember a few years back when no one could post vote them out without being ridiculed, but now it is pretty obvious that the Heidi Emberling, Camille Townsend, and Melissa Baten-Caswell should not have been re-elected four years ago, and definitely should not return in 2017. Fellow Palo Altans, don't forget that last parcel tax vote that the board and Glenn McGee basically said demonstrated our support of everything they do. Emberling, Townsend, and Baten-Caswell have shown repeatedly that they don't know how to manage a superintendent or a school district. Stop voting for them, and do not give to PTA or PiE when they guilt you and put you under duress in August to make up for the mismanaged budgeting. It's not your fault. Well, actually it is.


19 people like this
Posted by mighty neighborly
a resident of College Terrace
on Jul 28, 2016 at 6:37 pm

"The City of Palo Alto apparently cranked the Stanford construction impact into their numbers; PAUSD didn't. Hmmm - only $1.1 billion in exempt property from ongoing construction AND the 2nd largest exemption in the State. "

Does this include all those new houses they are building for families that are going to impact the district? I can understand the exemption for educational buildings but it seems too much of an exemption if it applies to non-dorm accommodation as well.


49 people like this
Posted by Top Heavy
a resident of Another Palo Alto neighborhood
on Jul 28, 2016 at 6:44 pm

PAUSD could save a lot of money by cutting in half the number of administrators it has>. They certainly don't earn their keep, and are way overpaid.

The ones that stay should get salary cuts, just as in the real world when there is a shortfall! In 2008, I took a 25% paycut, in order that my employees would only have to take a 10% cut, since they couldn't afford as much of a loss.

McGee and Mak should resign, but, failing that, be fired.

Most of the school board should be voted out--most of them are ineffectual anyway.


44 people like this
Posted by Midtown Dad
a resident of Midtown
on Jul 28, 2016 at 7:56 pm

Heidi Emberling is kind of embarrassing - she is still babbling about how this was all unforeseeable and shocking, like we were hit by an asteroid rather than making financial mistakes. She has no meaningful impact on the Board.

It was interesting to see Terry Godfry so defensive, calling other people Monday morning quarterbacks and pointing out how "smart" the board was in negotiating the contract. If this is smart, then I'd hate to see dumb. She never misses a chance to point out "I'm a finance person!" - no wonder she is defensive.

Melissa Baten Caswell is the biggest let down. Eight years on the board, and she signs off on a 3 year wage agreement and a crazy forecast at the same time. Maybe she is checked out, who knows? And don't forget, she hired McGee.

Disappointing to say the least. Let's do at least the basic well.


39 people like this
Posted by Dauber Told You so
a resident of Barron Park
on Jul 28, 2016 at 9:23 pm

The four members who voted for the raise were trying to be nice to the teachers so when they run for school board again, the teachers who live in PA will vote for them. They were just trying to buy their vote. I thought that Max was an expert on Math, I guess he is not, he cannot use data to predict the future. I am wonder if he is like Skelly, he came in saying that he spoke Spanish too, and then at our first community meeting, spanish speaking parents were so happy to finally have someone who can listen to them directly in Spanish so they started to pour their sad experiences with the district and some parents started to cry, and then he asked: What is going on, then Christina the secretary of an elementary school said: You do not understand? Do you need translation? and from that day on he always had a translator. My point is how good can Max be at Math when he made such a big mistake; maybe he just knows as much Math as Skelly knew Spanish. The other four members must not be good at Math either. I guess the only one who is good at advance Math is Mr. Dauber.
Sometimes I wonder if 3 member (Camile, Heidi, and Melisa voted yes, just to give hard time to Dauber, and then Godfrey just follow them so they would not be mad at her too. It is really difficult to have different opinions, but I am glad that Dauber did not budge even though he was being bully by the 3 board members. I have watch the meetings and have seen how sarcastic they can be. This has been going on since the moment Dauber sat on that chair what he legally won because we the people wanted him there. They have the raise but too bad,now they have to say, Oopsy, Daisy we are not that good at Math and we have to undo the raise.
Now Max should give up his raise, since he is the one who will be getting the bigger raise because of his already high salary. Other administrators at the district should do the same. The four members who attacked Dauber who voted yes, should get some money out of their pockets to pay for the deficit. My message to these four members is Dauber told you so! Now get some cash to cover for the deficit to pay off for your mistake. You did not want to listen to Dauber. I think is time for a new superintended and new four board member, se need someone who can predict the future. No, it was not Ms. Mac mistake, she only did what she was asked to do so people could be convince that the salary raise was not putting our students at risk of not having funds in the future. I pay my partial tax and it shall not be used for this. I will vote no to a hight tax to cover your mistake. Dauber told you so, and you did not wanted to listen, now pay back for this mistake, nor parents or students shall pay for you mistakes. .






11 people like this
Posted by Serious & Somber
a resident of Palo Alto High School
on Jul 29, 2016 at 7:27 am

I just listened to the video of the board study session and heard ALL 5 PAUSD board members engaged in a serious and somber discussion demonstrating the fiscal stewardship they were elected for. Web Link

Caswell probed for details. Concerned that staff did not have its arms around all the essential numbers, she shared that Stanford Hospital is in the midst of $3 billion worth of improvements. This year it claimed $1 billion in exemptions. Is $2 billion out there waiting to hit our bottom line too she asked. She suggested ways that staff could try to find exemption information for their projections.

Dauber agreed that the critical question is the one Melissa Caswell raised - are we facing a multi-year issue? He studied the district's financial charts and concluded from that that this year's aberration is not that unusual. He did not want to give district staff advice on how to do their job better but reminded them that the board expects staff to give it "an accurate sense about what level of confidence" the board should have in their revenue predictions.

Townsend addressed the ill-advisability of committing to prospective raises given how late in the year financial information firms up. She pushed staff to fully address community concerns and rumors including those expressed in this forum.

Emberling pushed to better understand what information the county shares and doesn't share with the district. She noted that staff thought it was projecting conservatively by using a property tax assumption that was well below what the county had shared with it and yet, even that low-estimate, turned out to be too high this year.

Godfrey, waiting until she got revised long-term revenue projections to probe further, focused on the information that the board will need to help it decide how to make-up the short-fall.

That's just what they said in the first hour.

There is another hour of probing in the link above.



22 people like this
Posted by Board watcher
a resident of Community Center
on Jul 29, 2016 at 7:29 am

I attended most of the meeting (missed most of Mak's presentation). Biggest surprise to me was Godfrey beginning her remarks by continuing to attack Dauber for wanting a smaller raise! It did make me wonder about the finance background she keeps claiming. And she did claim it again in Wednesday.
The $64 million question (maybe literally) is whether the board will double down on irresponsible budgeting by following the staff recommendation to spend the reserves or instead make real cuts, starting with the admin raise. Dauber put a stake in the ground on those but he wasn't the only one. Will be interesting.


65 people like this
Posted by reality check
a resident of Crescent Park
on Jul 29, 2016 at 1:49 pm

Hopefully, now they have an opportunity to re-negotiate the contract, they will make class-size reductions part of their initial position instead of the fanciful thinking that they'll be money left over in the budget for it.


35 people like this
Posted by Fooled Again
a resident of Jordan Middle School
on Jul 29, 2016 at 2:00 pm

So PAUSD used the same headhunter to find McGee that they had used to find Skelly!

Fool me once, shame on you; fool me twice, shame on me. Or so the adage goes.

Looks like the Board used the same buyer to purchase another Skelly. So now the song remains the same!

Time for many, if not most, of the Board members to go.

Time for McGee and Mak to resign.

Time for PAUSD to vet a new headhunter!


18 people like this
Posted by Board watcher
a resident of Community Center
on Jul 29, 2016 at 2:28 pm

"Serious and Somber" has made a very interesting post!

I wonder if PAUSD's PR officer's duties include anonymous posting to Palo Alto Online?

My take is that board members who tried to help Mak figure out how to get the information she needed to do her job were falling into the trap she set. It's her job to figure out how to do her job, as Dauber pointed out. Her failure was a performance problem not an information problem.

Emberling's desire to get mitigation from Stanford showed a complete misunderstanding of what's happening. She took the same bait. Staff were happy to have board members nattering on about exemptions and mitigation rather than management failures and budget cuts.


23 people like this
Posted by Resident
a resident of Evergreen Park
on Jul 29, 2016 at 5:33 pm

@Board Watcher - both excellent points.

I'm sure you are right about S&S. Jorge, if that is you, I hope you stop doing that; it would be embarrassing for the District if it became known (I imagine some PRA request could find something).

And yes, "ask for their help and advice" is part of the standard board-management playbook. It's the old "if you're so smart, you tell me how to do it!" play - the right answer is, "I don't know, but that's why we pay you a high salary, to go figure it out!" It's the board not understanding their governance role.

And Max of course was literally off to the side, when in fact the buck stops at his desk. This mess (the shortfall and the contract) is his mistake, his problem, and his job to fix it. This whole meeting was literally just a diversion from understanding and dealing with the issue, and addressing the performance issues that led to the problem.

Finally, typical of this group, I am still waiting to hear anyone say "I'm sorry, we made a real mistake here, and we should have done better." Not Max, not Cathy, not the Board, no one. Recovery starts with admitting you have a problem.


13 people like this
Posted by Board Attacks
a resident of Jordan Middle School
on Jul 29, 2016 at 9:46 pm

@Serious and Sober - This poster just obtained that from watching the first hour of the recording on the Web Link posted, but a large portion of it was inaudible and a blank screen. Palo Alto Online - Can you post a transcript or obtain the complete video with the entire meeting?

Ms. Townsend's insisted she really opposed the 3 year contract which at earlier Board meetings she both spoke and voted in favor of. She implied she really opposed it in closed session, and only spoke in favor of it because her colleagues favored it. Next time, it would be better to have more backbone and consistency. At the time, she said one of her reasons was for a 3 year contract was the District switched to a different type of negotiation that was interest based. Just wish she hadn't felt the need to be sarcastic and condescending to Mr. Dauber about it.

Ms. Townsend now "...pushed staff to fully address community concerns and rumors including those expressed in this forum." This is ironic, considering she attacked the views expressed in this forum at the meeting where she voted in favor of the contract which she now says she opposed. She also personally attacked the posters. She accused the posters of having wrong information, while she took zero action to present the correct information. This was information that she, the senior directly elected policy maker in the District, had access to. In future, it would be better to provide her information publicly or not attack and insult people. Actually no. Let's not attack or insult people at all.

Let's also note the ridicule and derision expressed for postings in this forum by both Superintendent Max McGee and by Board Member Emberling, the strongest proponent of the contract. They said in previous retreats they never read these posts. Given Ms. Townsend's expression of the need to respond to concerns expressed in this forum, this may be a good time to start reading them. Posts here do seem to often lead to useful information and revelations.

I don't mind Board members disagreeing, with me or anybody else. But their snide, sarcastic, rude remarks and attacks on families, Board Members, the press and any members of the public who dare to question, disagree, ask for information or provide information they do not like: these need to stop. Let's end it now.


34 people like this
Posted by No raise for Max
a resident of Palo Verde
on Jul 29, 2016 at 10:53 pm

We cannot possibly give a raise to Dr. McGee or any of the other Churchill staff who were involved in creating these budgets. Sorry the money isn't there. No automatic raise for admins.


18 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Jul 30, 2016 at 12:10 am

"PAUSD could save a lot of money by cutting in half the number of administrators it has>. They certainly don't earn their keep, and are way overpaid."

@Top Heavy,
You got that right. McGee's problem is not his ability to do math, as some suggest. His trouble is trusting the wrong people. When he came in, he just accepted what his underlings said about controversies that really came down to those same employees' own less than competent, backbiting, untrustworthy behavior.

We saddled the new guy with a group whose capacity for covering their backbiting and CYA is unparalleled. We - and the board - would have had to give him a pass to clean house. Or told him he had to since he seems disinclined to try.

Cathy Mak has never seemed that smart or able to rise above the office muck/mire to me. But she's not nearly the worst one. Too bad nobody told McGee the old saw about lying down with dogs/waking up with fleas... He'll end up like Skelly - never knew what hit him. Tragic. We should fire the lot of them like they did in that elementary school in Cupertino - then re-evaluate each one, if they want to come back. There are ways to reorganize school districts just like companies when they get this bloated and unwieldy.


22 people like this
Posted by Irresponsible to students
a resident of Fairmeadow School
on Jul 30, 2016 at 6:55 am

Serious and Somber?? The teachers union ran the table with board members who didn't want to get criticized and forgot about students. Now they are somber about the mess they made? They are somber because they got found out, just like my 5th grader when she is in trouble. Doesn't make her Abraham Lincoln, or them.


13 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Jul 30, 2016 at 8:00 am

@Resident,
"Recovery starts with admitting you have a problem."

Right there you condensed the heart if the matter with this district. The trouble us that the key employees would have to admit they have done things to families that would make you gasp, and how do those employees admit that when they lie even to themselves?


2 people like this
Posted by Perspecitve please
a resident of Another Palo Alto neighborhood
on Jul 30, 2016 at 11:29 am

Wow.

How is it that a missed budget projection equal to 1% or 2% of revenue prompts name calling and just fire thems?

No one is embezzling funds here or even missed the mark by more than the margin of error.

PAUSD's finance office's projections rarely overstate actual income.

PAUSD passes its financial audits.

Its budgets win awards.

Instead of posting inflammatory comments, consider pressing to figure out how it happened so that it won't happen again, because hurting people's feelings and hiring someone who does not know how Basic Aid district finances work in a town with one of the richest and always changing tax exempt entities in the US are not solutions.


15 people like this
Posted by Accuracy please
a resident of Crescent Park
on Jul 30, 2016 at 12:01 pm

It's actually 3.5% of property tax revenue this year, and then next year is apparently another 2.5% or so of revenue. That's based on Mak's answer to Dauber about 2017 reported in the story. Overestimating revenue by 6% is a huge miss when it was easily checkable. The assessor called it a rookie mistake.

I don't mean to be cruel or hurt feelings but - in my company this would be an automatic firing offense, no questions asked. It just doesn't meet the minimum bar of competence.

What awards are you talking about for the budget, by the way? I haven't heard about that.

Thanks!


4 people like this
Posted by Barron Park Dad
a resident of Barron Park
on Jul 30, 2016 at 12:47 pm

I'm very surprised at the all the positive comments about Ken Dauber. Did nobody else see the letter to the Editor in the Weekly last week? A Paly journalism student pointed out that Dr. Dauber did vote against the teacher contract *but* wanted to spend the money in another way. He wasn't doing conservative budgeting, just wanted not to give the money to the teachers

I haven't seen anyone dispute the account of the student. It's too bad Dr. Dauber hasn't himself pointed out the misleading Weekly story nor has the Weekly pointed this out.

I'd sure like to hear if the Paly student is wrong. Since it remains unchallenged, I have to assume it's correct.


12 people like this
Posted by Board watcher
a resident of Community Center
on Jul 30, 2016 at 1:22 pm

That's an interesting approach. "When I read a letter in the newspaper I agree with the author's point until I read something contradictory"? You must change your mind a lot.

Godfrey cited this very letter on Wednesday to attack Dauber. He responded by pointing out the difference between putting $4.5 million into further increasing compensation for our current staff, versus reserving it for other operating expenses. He said that everyone said that 35 teachers couldn't be hired so quickly, and in any case the district could recoup their cost by not replacing other teachers who left by attrition. I went back and rewatched the meeting last night, so if this isn't an exact quote it's pretty close: "At worst we would have a hole and 35 teachers, instead of just a hole." He's right.

In my opinion, attacking Dauber for not screwing up on the contract is a dumb move that will backfire politically, because it makes board members look like they still don't get basic facts about finance. Especially when Dauber didn't raise the contract issue himself. At least wait until he tries to score points by saying I told you so!


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Posted by Perspective please
a resident of Another Palo Alto neighborhood
on Jul 30, 2016 at 5:22 pm

Accuracy please,

The facts. PAUSD's budget is $230 million. Property tax revenues are $153 million. The short fall last year was $3 million and it's way too soon to tell if there will be a short fall this year. That won't be known for another year. People can do their own math to figure out if that $3 million - 1% or 2% depending on what revenue base you use - is a shocking mis-projection.

Your company. You say that at your company if actual revenues are 3% lower than the CFO's projected revenues they'd be fired "no questions asked."

Other companies. Only 22% of companies come within 5% of their projections and on average financial forecasts are off by 13%. KPMG "Forecasting with Confidence."

Best IMHO to figure out what did and didn't happen before sending out pick slips to PAUSD employees. Did Santa Clara County alert PAUSD after it got Stanford's application asking for $1 billion more in exemptions? Did Stanford tell PAUSD when it sent that application in? Mak said PAUSD meets with both to get updates for this very reason. What did or didn't they share I wonder.

And as for your "I don't mean to be cruel or hurt feelings," saying someone who has ably worked for the district for decades does not pass the "minimum bar of competence" and should be automatically fired based on your companies strict practices and misquoting what was said in the paper will likely hurt feelings.

What the Weekly reported is NOT that the County said that this is a rookie mistake. It said that PAUSD staff aren't rookies and they "know there's a lot of exempt property."

Those two statements - yours (which the assessor did not say) and his - are very different. Your statement places blame on the district. His statement states something that PAUSD has never refuted. There is a lot of exempt property in Palo Alto.

What the assessor added is that there was a "surprise" - that Stanford's improvements on that property would reduce this year's tax bill.

The hospital construction won't be completed for another two years. Sometime in this 7 year project the tax break would pass through but no one other than the assessor and Stanford knew that it would be this year. They didn't tell PAUSD until after its budget was finalized.






11 people like this
Posted by A Parent
a resident of College Terrace
on Jul 30, 2016 at 5:38 pm

@Perspective please - I agree with your point that firing Cathy Mak is probably not an appropriate response, at least based on what I have seen.

I disagree with the part at the end that make is sound like this was a "surprise" or somebody else's fault. If the District knew that, as you put it, "Sometime in this 7 year project the tax break would pass through" - they should have sunshined that fact and planned for it. But no one was told, because presumably no one at the District knew or thought to tell.

And please, keep in mind, the point is that, based on this projection, we handed out unprecedented guaranteed wage increases (9 percent over 2 years). That's part of the reason I can't just blame Mak - everybody knew we were betting a lot (too much) on one number from one source, but nobody thought the triple check with the assessor and say "what could go wrong here?" In my mind, that's the biggest managerial mistake, which the board should share in.


17 people like this
Posted by Board watcher
a resident of Community Center
on Jul 30, 2016 at 6:43 pm

This discussion about tax breaks and timing and predictions is a beautiful example of the distraction that McGee and Mak are relying on. Here's a trick question: How much of the Stanford Hospital property value is subject to exemption? Answer: all of it. Once the assessor knows how much Stanford Hospital has increased in value, he knows how much the exemption for Stanford Hospital will increase. It's the same number. Mak knew that she was dealing with gross property values, not net. Had she picked up the phone and called the assessor, she would have had the right number. Not doing that qualifies as a rookie mistake in my book. Should she be fired? I have no idea. She will probably be more careful in the future. So would her successor, I bet.

The "bolt of lightning" story serves the needs of staff and some board members who are up for reelection -- so expect to keep hearing it. Just don't believe it.


20 people like this
Posted by common sense
a resident of Midtown
on Jul 30, 2016 at 8:05 pm

The administration and Board went with the wildly optimistic projection of increase in property taxes because they wanted to get the pay increases approved. Remember, the Superintendent wanted to pass the contract without the usual process. They keep talking about the teacher pay raises, but what McGee was really after was the pay raises for the admin staff.

Notice that the proposal for dealing with the shortfall never brings up the administrator pay increases? It's about $600,000. Instead they propose taking money from the budget reserves, using 30 year bond money to pay for computers with a life of 5 years.

Watching the meeting, Heidi appears to be clueless; Camille is saying she never supported the raises even though she voted for them and spoke highly about them in previous meetings. Godfrey showed a lack of character in trying to attack Dauber, and I really question her finance background.

The budget has a structural deficit, and the administration is slow rolling the process to fix it.


14 people like this
Posted by Edwin
a resident of Downtown North
on Jul 30, 2016 at 8:34 pm

Wow! The board screwed up big time, well, most of the board, and as predicted, the 'solution' is to study it. Really?!

Question, how many board members can demonstrate how to balance a check book? Most of the board, Max, and assorted hangers on, seems to dismiss the concern by residents/tax payers, that that very basic budgeting skill may be the root of the problem.


12 people like this
Posted by Administrator Increases
a resident of Jordan Middle School
on Jul 30, 2016 at 9:42 pm

Board Member Townsend criticized posters in this forum for saying Administrators received the same salary increases as in teacher's contract. The Board asked in a Board Meeting if Mr. Young receives the increases negotiated for teachers, and District Administrators replied NO, that senior employees are on a separate contract. However, Mr. Young's 2014-2017 contract posted on Palo Alto Online states he will receive the same salary increase as given management employees:

"Based upon a satisfactory or better performance evaluation, the Associate
Superintendent shall be granted a step increase and the same percentage increases to the salary schedule as are granted on the management salary schedule."

Mr. Young also receives the pay increase on extra "stipends", extra pay he receives for having Master(s) degree(s) and PH.D's:

"b. Stipends. In addition to the Base Salary above, the Employee shall be entitled to receive an annual stipend of $2,123 for each Masters Degree he has obtained for a maximum of two such stipends and an annual stipend of $2,123 for a doctorate degree he has obtained.Based upon a satisfactory or better performance evaluation, the Employee shall be granted thesame increase to this stipend as granted on the management salary schedule"
Web Link

Ms. Mak's contract:
"Based upon a satisfactory or better performance evaluation, the Employee shall be granted the same percentage salary increases as are granted on the management salary schedule."
Web Link

Ms. Mak's contract requires her to be given 6 months after a negative performance evaluation to improve before she can be removed from her job.

Both Mr. Young and Ms. Mak's contracts grant them increases after working a specified amount of time worded at the top of the salary step scale, along with the same increases in these steps as management receives.

This information in Palo Alto Online puts in a different light the completeness of Administrator's responses at the previous Board meeting when the contract was approved, as well as Ms. Townsend's attacks on people who she said had the wrong information.


25 people like this
Posted by Not rookies
a resident of Atherton
on Jul 30, 2016 at 10:18 pm

'What the Weekly reported is NOT that the County said that this is a rookie mistake. It said that PAUSD staff aren't rookies and they "know there's a lot of exempt property."'

Your quotation is accurate, but not the context. The county was pointing out that the PAUSD staff should have known, since they "aren't rookies". Yet, like rookies, they did not know.

'The facts. PAUSD's budget is $230 million. Property tax revenues are $153 million.'

Again, context. The reason people are upset is that not only are property taxes going up, but residents voted to increase the parcel tax on top of it. And of course add in the increases from reassessments from sales, yet there's still a budget shortfall.

Residents have every right and every reason to be upset by the budget shortfall. Like you pointed out, they're 'not rookies', but they certainly acted like it.


19 people like this
Posted by Administrator Increases
a resident of Jordan Middle School
on Jul 30, 2016 at 11:10 pm

PAUSD's practice of internal promotions of senior administrators with pay raises, then giving them another pay increase retroactive to that pay raise received at the time of the promotion. This makes the effective pay increase not 4-5%, but more in a range of 8%-30%. To prevent this, many organizations have rules requiring an employee work a minimum amount of time in a new job before receiving a second salary increase, anywhere from 12 to 16 months.

Because the promotions were, by definition, only open to current PAUSD employees and contractors (as was the case in a number of promotions this year and last year), only existing employees are were allowed to apply for these jobs. In last year's reorganization, a job was only posted for one week, but these positions had to have been Board approved and discussed before that, possibly in closed sessions. (One Administrator in last year's reorganization was chosen for promotion before the Board even approved the reorganization allowing their promotion.) This gives the appearance that the job postings were only written so only one employee would get them. The Superintendent, Board, and promoted employees all knew about the promotions before hand, and the double salary increases anticipated. (They had to know in advance. New Job Postings don't come out of no where).

Here is a sample calculation. (Not a real case, just a scenario.) Let's say an Administrator is promoted and pay raised from $150,000 to $180,000 a year. The teacher contract is negotiated over the year, and in July the Administrator receives a SECOND $7,2000 pay increase retroactive to the previous July for time already worked in the past year. In this sample, the true salary increase is $37,200, not $30,000 as taxpayers were told at the time of the promotion. It will be even higher if the Administrator receives pay premiums for additional units or for having a Master's Degree, Ph.D., or both.

Then the next year, the sample Administrator receives a promise of a larger increase starting from July 1 calculated on the new base higher salary $187,200 ($180,000 plus $7,200). If that increase is 3%, the Administrator receives an increase of $5,616 for a new salary of $192,816, and more if there is extra pay for Degrees and if the pay increase for Degrees also rises. Possibly the amount the District contributes to retirement also increases by a corresponding amount.

In this sample scenario, the salary increased in two years would come to $42,816 (from $150,000 to $192,816), which is a 28.5% increase in two years, more depending on extra pay for Degrees and one time off schedule increases.



14 people like this
Posted by Board watcher
a resident of Community Center
on Jul 31, 2016 at 12:02 am

@common sense, you put your finger on it when you mentioned the 4% raise for administrators. That's the canary in the coal mine for whether Max is going to be serious about cuts and whether the board is going to hold his feet to the fire. Dauber proposed rescinding the raise, Townsend followed up with some cautious praise for the idea. Even Godfrey mentioned it, I think.

My prediction: if there's a way that Max loses his job over this, it's through trying to hold on to that raise for admins in an election year. Voters may like teachers but they don't have the same affection for bureaucrats.


8 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Jul 31, 2016 at 4:44 am

@Perspective,
I don't know how we got from waste and abuse to embezzkement, but your point that no one could be embezzling anything because PAUSD passes its audits is just wrong.

Web Link
Read this from the National Council on Nonprofits Myth: Audits Uncover Fraud

"Myth: Audits Uncover Fraud
While independent audits serve an important purpose and may prevent potential fraud, audits rarely detect fraud. Even when an organization conducts an independent audit or review of its financial statements, the auditors do not guarantee that the organization is free from fraud. Independent audits only provide reasonable assurances that the financial statements are free of misrepresentations. To detect fraud, one would have to recognize the deception or misstatement of truth in the nonprofit’s financial statements. Because the auditor has to rely on the nonprofit’s representations about its own financial position, it is actually quite difficult for the independent auditor to detect fraud while conducting an audit. Instead, when you consider ways to reduce the risk of fraud at your nonprofit, think about governance, as explained in this article: Nonprofit Fraud: It's a People Problem so Combat it with Governance (Nonprofit Quarterly)"

- See more at: Web Link

There is no real oversight of our district, hundreds of millions annually, an attitude that the community will pony up whatever they want whenever they ask, scorn for the parents of the families they supposedly serve, absolutely no ethical oversight - even a culture that protects lying/dishonesty/subterfuge - Look at the complete falsehoods told the community around the last tax measure A, with absolutely no accountability for it. Let's not even get into the facilities bond and the gap between the promises and what we got.

The trouble is that the ONLY mechanism the community has to hold the district accoubtable is the board, i.e., we have nothing. There is no real oversight of our district, hundreds of millions annually, an attitude that the community will pony up whatever they want whenever they ask, scorn for the parents of the families they supposedly serve, absolutely no ethical oversight - even a culture that protects lying/dishonesty/subterfuge. Well, sometimes the the Dept of Education, but as we know, potential embarrassment of overpaid bureaucrats trumps protecting children especially for board members like Emberling.

Budgeting for a school district is not that unpredictable. The district just got a tax measure through, so they would have triple checked the numbers, wouldn't they. $3 million us a hefty fraction of that tax amount annually, not some negligible error bar. (Anyone in the district management who thinks $3 million is a negligible error should be summarily dismissed.

People complaining on Town Square - nothing will ever get better unless you change the ground rules and introduce some real accountability. For example, many Cities have offices of management and budget that could serve as independent oversight of the City AND school district. Set up such an office and make the school district directly accountable to community members under the school district section. All you have to do is introduce a good city charter amendment. There may even be time before the next election. Don't expect someone else to do it. I'm frankly about to start taking my exemption and based on our experience, will never give money to the district again unless I see restoration of honesty and good stewardship. Given how older our parent population skews, there may be other tax misprojections in the future. The current crop of oblivious seniors will eventually be those whose kids suffered under this administration. (Student "Services" indeed)


23 people like this
Posted by The Greater Fool
a resident of Barron Park
on Jul 31, 2016 at 2:54 pm

The Calif Association of Realtors is reporting that Palo Alto housing prices have been effectively flat since August 2015 and are now dropping below Aug 2015 estimates (data also born out by Zillow and Trulia). The world economy is in a contraction, currency devaluation in China, and the US Fed unable to effect the US economy with Free money any more. Palo Alto roads are congested, citizens and students are miserably unhappy. The word is out that Palo Alto schools really ain't that good after all, and the quality of life and Property values in Palo Alto are now in decline.

I'd say that the PAUSD now has a much bigger problem on their hands than just a few exempt properties. A three year contract was stupid. Only a Fool (and the PA School Board) counts their chickens before they hatch. Can't wait to see what the budget shortfall is in a year or two. Thanks McGee !


Like this comment
Posted by Mom
a resident of Another Palo Alto neighborhood
on Jul 31, 2016 at 8:54 pm

Why are we taking the County assessor's word for all of this? The County is blaming the school district. Could the assessor's office be at least partially to blamed for this? Of course they would try to deflect blame. I don't know who should know what, but when I had to deal with the assessor's office (note, it was a horrid experience), they were totally unclear. I wouldn't be surprised if they weren't clear to the school district and are at least a part of the problem.


22 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Jul 31, 2016 at 9:38 pm

@Mom,
The difference is, you aren't getting paid hundreds of thousands of dollars to make it your day job to be clear on information like that. Other diatricts figured it out. Mak is not a novice. No, this is just the tip of the iceberg in this district.


64 people like this
Posted by City had no issues
a resident of another community
on Aug 1, 2016 at 9:51 am

"Why are we taking the County assessor's word for all of this?"

Because PAUSD was the only government agency that appears to have run into this problem. The City of Palo Alto was aware of the change in exemptions, for example, and budgeted accordingly.

Is it possible that the assessor's office gave correct info to the city, and incorrect info to PAUSD? It's possible. Is it likely? No, it is not likely.


8 people like this
Posted by Taxes
a resident of Jordan Middle School
on Aug 1, 2016 at 10:34 am

For the first time when the Board voted their budget in June, 2016 I felt frightened about their management of our tax money. I began to worry that, after the multiple special property taxes votes for the District, the tax increases would never end.

Ms. Emberling portrayed a sense of entitlement to an unlimited amount of property tax money. Board members attacked all who disagreed with normal fiscal management decisions, conveying their feeling that those who disagree do not support the teachers or care about "our kids". I have kids too, and struggle with rising property taxes and high costs. I don't know if we can afford to remain in our home into retirement, or if our disabled family members can afford to live here when we are gone.

I felt a real sense of greed. Resolutions to increase property taxes only on businesses were not comforting. Local businesses have to recoup their costs in increased rent and through products they sell. Overall, it felt like a tax and spend District.


16 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Aug 1, 2016 at 11:22 am

@Taxes,
Very well said, but do not make this an ideological argument. (Tax and Spend conjures a slam against Democratic Party which isn't really reflective of reality - the most fiscally sound government we've had at the state level in memory has been Jerry Brown's all-Democrat administration.)

I made those same arguments for being responsible with our district money as a predominantly Democratic voter, and was lambasted by those who said that trying to be wise with our money was somehow antkids, etc. Corruption is not a partisan problem.

Without mechanisms for direct checks and balances, school districts as governmental institutions are more vulnerable to corruption, waste, abuse, and even fraud. They were supposed to allow local control but the mechanisms for that are so weak they are laughable. Unfortunately, control by a handful of ineffectual uninspired greedy people living locally and giving themselves whatever they want (Superintendent making more than twice what the Governor of California makes) is not the same thing as the "local control" intended by those who conceived of school districts in the first place.


8 people like this
Posted by Competence not ideology
a resident of Southgate
on Aug 1, 2016 at 4:02 pm

"Board members attacked all who disagreed with normal fiscal management decisions, conveying their feeling that those who disagree do not support the teachers or care about "our kids"."

This is the crux of it. Melissa Caswell, Heidi Emberling, Camille Townsend, they all heaped scorn on anyone who wanted a smaller raise on the board or in the meetings. I don't think they really even understood the financial issue. Remember the woman who stood up at a board meeting and said that raising teacher salaries would mean more teachers for the district, because "that's how economics works"? And then she was loudly applauded? Even Mrs. Godfrey wanted a smaller raise for the managers and the 3 trustees voted her down.

To be responsible you first have to understand what is going on. Most of them are just going through the motions and glancing at columns of figures.


11 people like this
Posted by 2015_2016 Annual District Highlights
a resident of Palo Alto High School
on Aug 1, 2016 at 5:01 pm

As a PAUSD parent, I received an email addressed to all PAUSD families from Superintendent Max McGee on July 26, 2016 titled: "PAUSD 2015-2016 Annual District Highlights". This report lists "Budget Infrastructure: Sound Financial Stewardship" as one of the highlights of the 2015-2016 school year. It appears Superintended McGee and the School Board patted themselves on the back prematurely; this budget was created in 2016 and a $5m projected shortfall is definitely not what I would call "sound" or "conservative" financial stewardship. Their PR doesn't align with reality.

Web Link

"PAUSD recognizes the responsibility to its stakeholders for the financial health of the school district and is dedicated to professional, prudent, School District Budget and conservative financial planning and management."


16 people like this
Posted by FiResign
a resident of Crescent Park
on Aug 1, 2016 at 9:09 pm

Incredible squandering of public funds, gall to keep asking for more money, and loss of public trust. Except for Ken Dauber, everyone on the Board and most PAUSD administrators need to resign or be fired.

FiResign


13 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Aug 1, 2016 at 9:36 pm

@Highlights,
A great deal about that email doesn't align with reality. McGee still seems oblivious to the dishonesty in the layer of administrators between himself and the public he should be serving.

It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
-Mark Twain


15 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Aug 1, 2016 at 10:20 pm

> using 30 year bond money to pay for computers with a life of 5 years.

The voters approved that use of bond money when the bond as proposed. It's an appallingly bad use of bond money, but Palo Altans don't seem to care much about the frivolous use of money where schools are concerned.


12 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 12:06 am

The basic model for revenue in a Basic Aid District is:

School-Revenue = (Total-Property-Tax-Assessment - Property-Tax- Exemptions) X AB-8-School-Revenue-Factor)

(This AB-8-Revenue-Factor tends to be about 46% of every property tax dollar collected, but is subject to change from time-to-time.)

The tax rolls close on/about 30 June each year, so the actual revenue calculations for a Basic Aid school district can not be reliably determined until after that date.

As to "tax shortfalls", the Assessor makes quarterly projections to each Basic Aid school district, but there are any number of issues that can pop up in the last quarter that could invalidate the Q3 projections. School Districts paying Admins over $200K should know this. Once the year end tax rolls are closed, then the County dispenses the funds to the BA schools on a quarterly basis. If some statewide catastrophy were to occur and property tax revenues confiscated by the State in order to deal with the catastrophy, then this might be a case for saying a tax shortfall ocurred. Otherwise, the school Admins simply did not do their jobs in a professional manner.


9 people like this
Posted by ItIsNotComplicated
a resident of Old Palo Alto
on Aug 2, 2016 at 6:48 am

@Joe - thanks for posting the underlying equation for computing revenue.


Having 3 variables, and simple math should definitely fall within the range of even a low-paid clerk. Whoever screwed this up is overpaid .

My question is a bit higher level: if the real numbers are released in June, why doesn't the Board vote on the budget in June? What possible benefit comes from approving a budget 1 month before the numbers are known?

It really seems foolish, when a 1-month shift in the budget cycle eliminates guesswork. (And apparently it is difficult guesswork at that...)

So I get that we are incompetent. Why not schedule the budget to accommodate our incompetence?


6 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 7:25 am

"School Districts paying Admins over $200K should know this. "

Question: off the top of your head, can you name how many school district employees make more than the Governor of California? More than the top pay of the most experienced federal judges in San Francisco (an equally expensive area)? If you prorated the pay for a whole year and added in cash benefits, how many district administrators make almost as much or more than Members of the US Congress or the President of the United States?

If you do not even have a sense of the order of magnitude to answer that question, please go to the Weekly contact information and ask the editor. In the midst if all of this, we need a clear analysis of what our district administration is costing us and what we get for it. We need it now, before the election.

If the Weekly wants to really be our fourth estate, they should get some professional expertise to analyze our facilities bond and what we got for it versus what we were promised, and what we could reasonably have expected to get with superior management we were paying through the nose for. We need things like that in advance of the election. We especially need analysis of administrative costs.


8 people like this
Posted by Citizen
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 8:12 am

PS What we were promised means not just what's in the bond, but the interpretation in words given by the same people who spent the money. For example, what was provided publicly for Measure A tax recently and what did we get, not just what was in the bond language, which is never intended to obligate those same people to keep their promises (so a good analysis would look also at the verbal and other written promises made to the public that they relied on in good faith to make their decisions.)

Weekly, we need you!


2 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 12:43 pm

> What we were promised means not just what's in the bond,
> but the interpretation in words given by the same people
> who spent the money

That's correct. It always pays to read the fine print.


1 person likes this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 12:54 pm

There is a growing collection of salary and pension data for California public employees at Transperent California: Web Link

It would take a lot of work to extract all of the school districts in California from this data. Unfortunately, not every school district in California is represented.

It's a shame that this sort of data is not readily available.

Some generic data can be found here:

Web Link

Actual Salary and Benefits data can be found here:
Web Link



2 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Aug 2, 2016 at 1:10 pm

> My question is a bit higher level: if the real numbers
> are released in June, why doesn't the Board vote on the
> budget in June? What possible benefit comes from approving
> a budget 1 month before the numbers are known?

This is a question best answered by the PAUSD Finance Department. Putting together a budget book, as well as balancing the budget, is not an easy task. One would think that much of the work would have been transferred to computer performed manually is a question for the finance people.

Budgets can be adjusted at any time, BTW.


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

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