Palo Alto Unified School District administrators' salaries are competitive and in many cases above what surrounding districts pay, according to new data the school board will discuss Tuesday night as part of an ongoing discussion on how to manage an unexpected $3.3 million budget shortfall.
At its first regular meeting of the new school year, the board will look at how to manage this budget gap with some, but not all information trustees have requested in previous meetings on this topic, including comparing Palo Alto's administrator pay to other local school districts and several multi-year budget scenarios.
Tuesday's meeting will be the board's third meeting on the budget shortfall since discovering in July that property-tax revenue estimates came in about 3 percent lower than the district planned for, resulting in an initial $5.2 million shortfall. (The automatic elimination of a 1 percent bonus for teachers this year and a surplus of $418,000 results in the latest estimate of a $3.3 million deficit.)
Management-salary comparisons compiled by the district's Human Resources department show that today, Palo Alto Unified pays its administrators more than most districts.
For example, in 2016-17, a new elementary principal in Palo Alto would make $127,864 and one at the top of the district's salary schedule would earn $167,215. Saratoga Union School District paid its elementary principals almost the same amounts, but the only other two districts with salary information provided for 2016-17, Cupertino Union School District and Santa Clara Unified, pay less. In Cupertino this year, elementary principal pay starts at $119,923 and tops out at $150,046; in Santa Clara, it starts at $122,296 and tops out at $143,189.
Palo Alto Unified's assistant superintendent position also out-earns other comparable districts this year, except for a veteran person in that position in Cupertino, where he or she would top out this year at $213,139 (compared to Palo Alto's $205,989).
In 2015-16, too, Palo Alto administrators' pay was either in pace or ahead of the pack compared to other districts.
During a discussion of the budget at an Aug. 11 retreat, Trustee Ken Dauber made a proposal to rescind 4 percent salary hikes given this year to one of its two groups of non-represented employees, senior administrators and managers, as "me too" raises attached to those negotiated with the district's teachers and classified unions. Doing so would result in about $648,000 in cost savings, according to the district. None of Dauber's colleagues supported this proposal.
Dauber and board Vice President Terry Godfrey had requested these comparisons in May, but the other board members did not support their request and ultimately approved the compensation increases.
At the retreat, board members also requested that staff provide at this Tuesday's meeting multi-year budget forecasts that also include 1 percent raises to better assess the impact compensation will have given the district's new budget restrictions. This information was not included in Tuesday's board packet, but rather only an estimate of the cost of a 1 percent raise for the 2017-18 school year (about $1.6 million) and a history of teacher compensation since 2001.
In January, the district plans to reopen negotiations with its teacher and classified unions for the 2017-18 year to discuss a 3 percent raise promised in the third year of new multi-year contracts.
Board members will also discuss Tuesday a new five-year budget scenario with much more conservative property-tax growth projections, starting with 3.72 percent in 2017-18 and declining to 2.82 percent in 2021-22. This is compared to two alternative scenarios with five-year growth rates closer to 5 percent and 4 percent. Staff is seeking board consensus on which scenario to use moving forward.
Staff has preliminarily suggested that the district address the shortfall over two years by tapping reserves, bond funds set aside for technology updates, professional development funding and unused dollars left over from not needing to hire elementary teachers due to lower-than-anticipated enrollment growth, among other proposals.
There will be at least three more meetings on the budget: at the board's two regular meetings in September, and again in October at a special workshop that will focus on the 2017-18 budget.
In other business Tuesday, the board will hear a presentation from the Santa Clara County Public Health Department on a recent report from the Center for Disease Control and Prevention (CDC) on youth suicide; discuss 2016-17 goals; and vote on a staff recommendation to release about $60.3 million set aside in the district's Strong Schools Bond reserve for future elementary facilities improvements to fund current projects. If approved, a sub-group of elementary principals will be convened to develop recommendations regarding use of the funds, to be presented to the board for review this fall, according to a staff report.
Tuesday's meeting will begin at 6:30 p.m. at the district office, 25 Churchill Ave. Read the full agenda here.