Palo Alto school board eyes more conservative budget projections

Disagreement persists over urgency of tax shortfall

Palo Alto school board members supported a much more conservative budget outlook for the next five years during a discussion Tuesday on how to plan for a $3.3 million budget shortfall -- the result of overly ambitious estimates of property-tax revenues -- with at least two trustees pressing for a more comprehensive list of potential areas to cut now rather than put off hard decisions.

At the board's first regular meeting of the school year, trustees agreed that district staff's newest and most conservative five-year budget forecast, which plans for property-tax growth rates of about 4 percent for the next two years and 3 percent in the outyears, is the best scenario to use moving forward. These rates are in stark contrast with the projections the adopted 2015-16 budget relied on: 8.67 percent growth for this 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, for 2018-19 through 2021-22 on secured property only, according to a staff report.)

Board Vice President Terry Godfrey did express some concern about unanswered financial questions that could affect this scenario, such as the outcome of an initiative on this November’s ballot to extend a personal-income-tax increase through Proposition 30. (If this doesn’t pass, it could result in million-dollar deficits in future years for the district, according to Chief Budget Officer Cathy Mak).

Godfrey said she prefers to "take action" in alignment with another presented forecast, which uses growth rates slightly below the city's 5 percent range, but be prepared for the third, most conservative scenario.

While he supported the third scenario, Trustee Ken Dauber said what is more important than picking the right multi-year scenario is understanding -- and taking action on -- the budget implications before the district now.

"I think the real payoff of choosing a scenario is that it tells you what you need to do right now -- and they all tell us that we need to make some adjustments to our expenses in order to deal with the uncertainty that's in front of us," Dauber said. "I'm less interested in which scenario we pick than being committed to making the most serious and urgent as possible response we can make now."

Both Dauber and Melissa Baten Caswell pressed staff to look where cuts can be made to save money this year, rather than spreading out the pace of decisions in staff's recommended two-year plan for addressing the shortfall. Both also expressed opposition to staff's proposal to borrow money by using $1.2 million from the general fund that in previous years has been spent on technology updates (bond funds would be used instead for the technology upgrades).

Superintendent Max McGee said staff will present at the board's Sept. 13 meeting a full list of potential areas to cut, in advance of the board's scheduled adoption of the 2016-17 budget at its Sept. 27 meeting. (Dauber requested such a list when the board discussed the budget deficit in July, and lamented that it will take until mid-September to get it.)

On Tuesday, there continued to be disagreement between board members, staff and community members over just how urgent a problem the budget shortfall is.

Dauber, for his part, compared the staff's two-year plan to a somewhat toothless commitment to quit smoking: "'I'm going to smoke this year and next year I’m going to quit smoking,'" he said.

"Until we make a serious commitment to actual spending cuts, talking about cutting spending a year from now isn't really a plan," he added.

McGee, a marathon runner, disagreed, countering with a personally relatable analogy: "The only way you complete a marathon is by telling people you’re going to run it ... but you don’t run it tomorrow. You take a year to train for it, and then you run it."

Trustee Camille Townsend and President Heidi Emberling similarly emphasized being "thoughtful," "deliberative" and "inclusive" rather than urgent.

Parent Ritz Tetzlaff urged the board to incorporate the cost of teacher compensation -- which accounts for 85 percent of the school district's expenditures -- into its multi-year budget scenarios, which staff has not yet done beyond the 2017-18 year.

Mak said Tuesday that this is because raises are subject to negotiations, which the district will have to reopen in January with its teachers and classified staff unions given the budget shortfall.

"By not forecasting any raises you're delaying the inevitable hard cuts that need to be made today," Tetzlaff told the board.

Tetzlaff, whose guest opinion piece in this newspaper on class size propelled the topic to the forefront of board and community conversations during the last school year, was worried that, when faced with hard decisions down the line, commitments like hiring teachers to reduce large classes will fall by the wayside.

Parent and school-board candidate Todd Collins similarly cautioned against assuming no raises in the outyears of the budget, which "amounts to balancing the budget on the backs of the teachers," adding that it "seems like a strategy for a district that is in danger of losing its edge."

"A more sensible approach would be to plan for prudent raises, and then re-size non-teacher expenses to fit what we can afford to spend," Collins said.

There remained no support on the board Tuesday for a proposal Dauber made at a previous meeting to rescind "me too" raises for senior administrators and managers, which would save the district an estimated $648,000.

Dauber maintained that doing so wouldn't harm the district's quality of services nor its competitive position in the labor market for such positions, but his colleagues argued that it would deal a costly blow to morale throughout the district.

Mak has made several proposals so far for how to make up for the budget shortfall this year and next, including tapping reserves, reallocating professional-development funding and unused dollars left over from not needing to hire elementary teachers due to lower-than-anticipated enrollment growth. Some board and community members have voiced concern in previous discussions about dipping into the district's reserves to address what they say is a structural budget problem.

After the board packet was published last week, Mak said her office identified further potential savings for the current year, including about $100,000 that would come from rolling back staffing additions to the district office that the board approved in May.

McGee said the district's leadership team has already "developed a rough idea" of adjustments that can be made in the 2017-18 budget and will be sharing them with site administrators at a meeting next week.

The district also plans to solicit community input at a town hall meeting on the budget on Sept. 7, which will be live streamed online. There will also be a board workshop on the 2017-18 budget on Oct. 18.

Also on Tuesday, the board unanimously adopted a set of goals for the 2016-17 year, which all fall under three categories: high-quality teaching and learning; equity and access; and wellness and safety.

The board also unanimously voted to release $60.3 million in reserve funds set aside for elementary facilities upgrades to support current projects or, potentially, the opening of a new elementary school, staff said Tuesday. The board is scheduled to hear a report on an additional elementary or middle school this year.


How would the candidates vote?

As part of the Palo Alto Weekly's election coverage, we will be asking the school-board candidates how they would vote -- and why -- on significant issues that the board takes action on before November.

This week, the Weekly asked the four non-incumbent candidates how they would vote on the release of elementary reserve funds. See their responses below.

Jay Cabrera, yes: First of all, I would do a public citizens poll and get our local communities engaged and voting on the issue. I would want to vote the way the people tell me to, as I am a populist candidate who utilized technology for direct and participatory decision making with the electorate.

For me, I would vote yes, because overall the voters mandated that these funds be used to support our children and students, and it seems time that they are allocated to get the ball rolling and improve facilities and projects for the students.

Todd Collins, yes: I would definitely support the release of the funds. The EMAC's work made it very clear that elementary enrollment is and has been shrinking, and these funds should definitely be put to work. There's a number of projects in elementary schools across the district that need to be done -- MP (multipurpose) rooms, libraries, classroom remodeling -- and we need to get going on them.

Jennifer DiBrienza, yes: I would have voted yes to release the funds. I think if those funds are needed at elementary schools for capital improvements, better to start planning on how best to use them and to prioritize those needs sooner rather than later.

Srinivasan Subramanian, abstain: I think the right thing to do on the $60 million release should be to postpone the vote as there appears to be discussion that still has not happened. It's not clear why $60 million release is needed to start a discussion about whether or not a new elementary school is needed. One option would have been to have amended the transfer to a partial amount, say $10 million, to fund the facilities upgrade of existing elementary schools -- emphasize existing elementary schools.

I'd have abstained as the information presented was not clear or sufficient to make an informed vote.


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42 people like this
Posted by Barron Park dad
a resident of Barron Park
on Aug 24, 2016 at 10:13 am

Why isn't there more urgency to resolving this budget shortfall? If people knew about this back in July, why does it take until mid-September to take action?

It feels like the Board members (and District staff) are avoiding tough decisions, and kicking the can down the road, because of the 3 open seats up for election in November.

I would like to hear from the non-incumbent candidates their ideas for tackling the budget gap.

58 people like this
Posted by resident
a resident of Midtown
on Aug 24, 2016 at 10:43 am

If the budget issue is not resolved by the time I get my ballot in October, I will NOT be voting for either incumbent (Emberling or Baten-Caswell). In my opinion, a basic qualification to be a board member is to be able to budget without deficits, and without any financial tricks (like using bond money, or dipping into reserve funds).

Please tell all your neighbors to do the same, and like this post, so that we can send a message to the board.

39 people like this
Posted by Voter
a resident of Crescent Park
on Aug 24, 2016 at 10:59 am

Daubers blog: Web Link

Collins blog (says it is his board comments): Web Link

Seem to be saying the same thing - management should cough up a list of options and how fast they can be done, and start cutting right now, for impact this year.

It is ridiculous - Caswell, Emberling, etc. all pounded the table for large, multi-year raises, and now are pounding the table for "super conservative" forecasts. They seem to have no independent judgment - just sticking their fingers in the wind, reacting to the latest "crisis."

40 people like this
Posted by another resident
a resident of Barron Park
on Aug 24, 2016 at 11:13 am

Whether or not this budget issue is resolved by October, I will NOT be voting for either incumbent. They got us into this mess and are dragging their feet getting us out. They refuse to make non-popular decisions with the staff and refuse to listen to parent’s (and teacher’s) pleas for smaller class sizes. Time for new blood and new ideas.

24 people like this
Posted by Greenmeadow mom
a resident of Greenmeadow
on Aug 24, 2016 at 1:57 pm

These articles about the budget seem to never change. Has it really been 2 months and there is no list of budget cuts?

30 people like this
Posted by So sad
a resident of Another Palo Alto neighborhood
on Aug 24, 2016 at 2:05 pm

The overpaid administrators at the top already got like a 20% raise in recent years. If pulling back on ridiculous increases is going to hurt morale, they should just leave, further saving us money, and helping the morale of families whose children have suffered fom the backbiting, personal retaliatory politics, and ineptitude. Any useless CYA positions should be first, like the PR person.

We should further stop comparing ourselves to other districts, although we are pretty expensive on that score, and get a grip. The budget of the school district rivals the City's with far less complex of a mandate.

I agree, I will not be voting for either incumbent. I only wish I could take back all my past votes and support, I made them based on personal relationships and credentials. Now I know that was not enough. I hope the people who are not associated with the district because your kids are out will do more than a superficial look at the candidates.

16 people like this
Posted by Barron Ave
a resident of Terman Middle School
on Aug 24, 2016 at 5:09 pm

Collins's blog post linked from above is well worth reading. Clear and sensible. I hope we can have an election that is focused on issues and not just mudslinging. God knows there is enough to talk about.

25 people like this
Posted by Board watcher
a resident of Community Center
on Aug 24, 2016 at 5:25 pm

The big development yesterday was Caswell taking a big step towards Dauber's position that cuts need to be made this year rather than next year. Opposing the use of bond funds for the tech refresh means that she is asking for $1.2 million in cuts to replace them. That change is probably because of the election. It's pretty obvious what the politically smart position is on this.

Three things to watch for in the next few weeks:
Will Caswell soften on the admin raises? If Caswell isn't going to look like a paper tiger, she is going to have to bite the bullet on some actual cuts, not just call for them in general.
Will Emberling join Dauber and Caswell? She's up for re-election, but unlike Caswell she seems to lack a basic understanding of the politics of this situation.
Will other non-incumbent candidates join Collins in criticizing the teacher raise in May and calling for cuts to get the budget back in balance? Srinivasan was the only other candidate who spoke at the board meeting. He talked about the goals and didn't make a whole lot of sense. DiBrienza didn't speak, don't know if she was in the audience or not. Not talking about the elephant in the room isn't going to inspire much interest or confidence in voters.

1 person likes this
Posted by reality check
a resident of Adobe-Meadow
on Aug 24, 2016 at 7:08 pm

Caswell's already won re-election. You're kidding yourself if you're expecting any other outcome.

20 people like this
Posted by Board watcher
a resident of Community Center
on Aug 24, 2016 at 7:17 pm

@reality check

I tend to agree, but on the other hand, Caswell voted for the teacher raise over Dauber's objections, and it turned out to be a budget-buster. That gives challengers an opening. On top of that, the Weekly already signaled in the spring that Caswell won't be getting an endorsement. All that makes this less of a walk than you might think. At least Caswell seems to think so, on the evidence of this switch. Moving closer to Dauber on this gives her some insurance.

13 people like this
Posted by A Resident
a resident of Midtown
on Aug 24, 2016 at 9:58 pm

The Weekly is out to get her. They didn't endorse Townsend in 2012, and Townsend got only 1000 more votes than Emberling, a not-so-strong rookie candidate. And that was without a budget blow-up.

That said, Emberling seems more vulnerable. I doubt the Weekly will endorse - she is too clueless, plus she voted for the OCR resolution. And she is looking like a deer in the headlights on the budget snafu - she literally does not know what to do or say. She only got in by beating Dauber the first time he ran, when he had no endorsements and half the town hating him and there were 4 candidates for 3 spots, and even then she won by 900 votes.

23 people like this
Posted by BadManagement
a resident of Old Palo Alto
on Aug 25, 2016 at 4:49 am

Is McGee a moron?

Is he incompetent?

I don't think so. So why does the board treat him as such?

Why does the board ask for a list of things to cut, and micromanage him? At work, I only do this to low performing idiots on their way out the door.

Don't ask for a list of cuts; TELL him the budget. Done.

Here's a lesson in boardology:

"Max - here is your budget: xx million dollars. Don't use reserves, don't play hide-the-pickle with finances. You figure it out. You screwed it up, you fix it. You have two years."

Don't bother bringing a list of cuts - that allows Max to move decision accountability to the board. Make Max figure out the cuts to perform. Make him do his job.

I don't think he is incompetent, why would the board do his job for him?

2 people like this
Posted by history lesson
a resident of Embarcadero Oaks/Leland
on Aug 25, 2016 at 8:02 am

" They didn't endorse Townsend in 2012, and Townsend got only 1000 more votes than Emberling, a not-so-strong rookie candidate. And that was without a budget blow-up."

Yeah, Townsend had a whisper campaign against her in the last election. However, even with that, she beat both Emberling and wiped the floor with Dauber (you neglected to mention any of that).
Townsend also won the previous election with the Weekly not endorsing her. Seems the Weekly's endorsement matters very little in election results. So Caswell's a shoe-in.

8 people like this
Posted by A Resident
a resident of Midtown
on Aug 25, 2016 at 9:35 am

@history lesson - You might want to check in with Catherine Crystal Foster on the importance of the Weekly endorsement. Her failure to give a straight answer to the OCR resolution question cost her the endorsement, which cost her the election.

I agree, with incumbents the endorsement matters less, since their names are already known to the community (and they were likely endorsed in the past).

Townsend didn't receive the Weekly endorsement in 2007 or 2012, and in each case polled below other incumbents. In 2007, she polled 5000 votes behind newcomer Barbara Klausner, and 1300 votes behind Caswell, squeaking by challenger Wynn Hauser by <200 votes (who said he had to stop campaigning due to illness, I believe, but who knows).

Why are you so focused on Dauber? A two-term incumbent beats a controversial newcomer - film at 11? Two years later, he was the top vote-getter. He's on the board; you can let it go now.

21 people like this
Posted by Private Parent
a resident of Fairmeadow
on Aug 25, 2016 at 10:27 am

The phrasing, "On the backs of the teachers" seems a little extreme given the fact that we just gave them a massive, retroactive, raise. I'm generally glad that we did (but I would have chosen to give them the smaller one proposed by Dauber). But when you've just been handed an outsized and that the district can't afford and clearly shouldn't have been given, saying that fixing that mistake is penalizing you is a little over the top.

Of course, long before we do that, we should undo the "me-too" raises. Absurd.

8 people like this
Posted by Melissa voter
a resident of Duveneck/St. Francis
on Aug 25, 2016 at 12:58 pm

Melissa has obviously figured out that she doesn't have to be the top vote getter to be reelected. She just has to outrun Heidi. Allying with Dauber against Heidi puts her in the right side of the budget issue, and makes it a little more likely that the Weekly will swallow hard and endorse her.

Like this comment
Posted by Heidi voter
a resident of Embarcadero Oaks/Leland
on Aug 25, 2016 at 6:31 pm

"You might want to check in with Catherine Crystal Foster on the importance of the Weekly endorsement. "

So you're saying the Weekly endorsement is worth a dozen votes? Hardly worth the effort!

"A two-term incumbent beats a controversial newcomer "

Emberling was a newcomer not a two term incumbent. And polled significantly ahead of a Weekly endorsement.

6 people like this
Posted by A Resident
a resident of Midtown
on Aug 25, 2016 at 8:43 pm

@Heidi - I think you missed the other poster's earlier comment about Townsend defeating Dauber in 2012.

I imagine Heidi won't be getting the Weekly endorsement this time, due to her lack of meaningful contribution. That should give us another data point on what that endorsement is worth.

9 people like this
Posted by Board watcher
a resident of Community Center
on Aug 25, 2016 at 9:22 pm

Townsend is a lame duck and now irrelevant. When she defended the teacher raise on Thursday, none of her fellow board members chimed in to agree, even after Dauber made the point again that the raise is the reason for the budget mess.

Watch in the next few weeks for Max to come up with some real cuts for this year, as he realizes that he's losing his board's support for no cuts this year. He already came up with $100k in cancelled HR hiring.

I heard that Max and Dauber attended a PTA presidents meeting today, and Dauber contradicted Max's sunny view of the situation. If PTA presidents start to doubt the staff's management, Max is going to need to quickly make Caswell and Dauber happier with the plan.

12 people like this
Posted by Voter
a resident of Crescent Park
on Aug 25, 2016 at 9:35 pm

Lots of doubt at the PTA level already. One of the high school PTA presidents allegedly sent a scathing email to McGee and the Board expressing no confidence in the way the budget is being handled. If PTA presidents aren't being boosters, nobody is.

Agree, Max is getting hammered by Dauber and Collins, with Caswell now jumping on too. Max hates the board telling him what to do, and probably hates making cuts, so will resist and stonewall as long as he can. The winner is Elena at the Weekly - the stories just write themselves!

12 people like this
Posted by Board watcher
a resident of Community Center
on Aug 25, 2016 at 9:50 pm

The other winner is Todd Collins, who gets to highlight his financial background and his opposition to the size of the teacher raise and to the staff desire to spend reserves and bond funds rather than cut spending.

Like this comment
Posted by GraceBrown
a resident of Duveneck/St. Francis
on Aug 26, 2016 at 7:18 pm

GraceBrown is a registered user.


If it is the PTA/PTSA president from Paly, I would be leery of throwing in my support. Witnessing the way this individual interacts with staff is telling, and is not be representative of the parent community in my experience.

Having said that, it is critical that we understand how budget projections are interpreted and presented to the lay community. Students, their teachers, and families deserve better.



10 people like this
Posted by GoodManagement
a resident of College Terrace
on Aug 27, 2016 at 9:37 am


The fundamental flaw in your premise: We are not talking about a private corporation where all that matters is the bottom line. School board members are public trustees whose overarching obligation is to ensure the best education possible for the district's students. That means wrestling with hard trade-offs, not ducking then. Board trustees cannot simply defer to McGee's choices, especially given his evident desire to put the financial interests of his well-compensated management staff -- whose incompetence got us into this mess in this first place -- ahead of other pressing educational needs.

For way too long, the PAUSD board has miserably failed to fulfill its trustee duty to oversee staff, rubber-stamping one bad superintendent recommendation after the next. If board members don't like the heat, they should get out of the kitchen.

So no, not "done."

7 people like this
Posted by BadManagement
a resident of Old Palo Alto
on Aug 27, 2016 at 6:25 pm

If what you say is true, then McGee is not doing his job.

In such a case, the board should hire a replacement rather than do his job.

Public sector has no inherent right to be poorly managed. I see no reason to do his job for him OR let him off the hook to make the hard decision. No board should be a rubber stamp.
Certainly when our children and our money are at stake.

At best you could say Max has to go if he cannot fix this.

8 people like this
Posted by Reality check
a resident of Barron Park
on Aug 28, 2016 at 7:55 am

The idea that this board is going to figure out how to manage McGee is laughable. To paraphrase Trump, he could stand in the middle of El Camino and shoot someone and they would still do his bidding in the next board meeting.

11 people like this
Posted by Annette
a resident of College Terrace
on Aug 29, 2016 at 11:09 am

Annette is a registered user.

I have lived here since 1981 and for most of those years there were few concerning headlines about the PAUSD School Board. In recent years it seems one crisis is followed by another. One has to look at management when this happens. We are quick to point out that people seek to move here because of the schools. Reads to me like we'd best get our act back together if we want that to be a reality and not a myth.

Like this comment
Posted by Marc Vincenti (Save the 2,008)
a resident of Barron Park
on Sep 6, 2016 at 7:17 pm

Marc Vincenti (Save the 2,008) is a registered user.

Save the 2,008 applauds parent Rita Tetzlaff for her stellar work toward reducing class sizes.

Thank you, Rita, not only for your excellent "Weekly" editorial, but for speaking to the board.

I share the concern that, with our budgeting being done as it is, "commitments like hiring teachers to reduce large classes will fall by the wayside."

Readers can find out more about the Save the 2,008 commitment to shrinking our largest high-school classes to a friendlier size, more conducive to learning, at:

I hope you'll join us!

Like this comment
Posted by UdyRegan
a resident of Addison School
on Sep 14, 2016 at 8:43 pm

UdyRegan is a registered user.

I find that when it comes to the education sector, they are almost always talking about budget cuts and how difficult it is to fund schools for this and that. Surely there are better investment and money storage solutions that are available to help the school ensure that they have the funds when they need it? As it is, like they said - there're enough hard decisions and tough calls to make so why shouldn't they try to do something else to improve the situation.

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

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