Palo Alto school board members opened the floor on Wednesday, Sept. 7, to the community to answer questions and receive feedback regarding this year's multimillion-dollar budget shortfall, which caught the district off-guard in July and launched an effort to find cuts and revenue enhancements to close the gap.
The actual shortfall, previously reported as $3.3 million, is subject to change based on property-tax revenue growth by the end of the fiscal year, on June 30, 2017. In the past, actual tax-revenue growth has been higher than the Santa Clara County Controller's conservative estimate, meaning what is currently a $4.2 million shortfall is likely to decrease by the end of next June. The board's recommended budget reduction is $3.4 million, according to Superintendent Max McGee.
McGee led the meeting, which was also live-streamed, allowing community members to participate remotely by submitting questions and comments, which were largely addressed by McGee as well as Chief Business Officer Cathy Mak.
Part of the board's plan to immediately address the budget gap includes not going forward with filling three elementary-school teaching positions, especially given the current and unexpected underenrollment in elementary schools.
While class sizes are smaller at the elementary level, parents whose kids are in larger classes in middle and high schools raised their concerns Wednesday that more hiring, not less, is needed in the district.
While McGee stated that the board is maintaining its commitment to keep class sizes small, noting that average class sizes remain at or below union-contract requirements, this remained one of the main concerns during the question-and-answer portion of the meeting.
Chris Boyd, a parent whose daughter attends Jordan Middle School, expressed concern over what he called the school board's "serious lax in planning" in addressing overcrowding. In an effort to help solve this issue, he, along with other parents and Stanford University researchers, have put together a written plan for the board's consideration.
"We are hoping that the board extends a hand that comes out to work with us," he said.
Boyd stated that with 22, 25 and even 30 students in a portable, there is "no reason to have an expectation of learning," adding that he didn't think parents will back down from this issue.
McGee, who said he is receptive to Boyd's concern and proposed plan, suggested that Boyd attend an upcoming budget workshop on Oct. 13.
In answer to another question concerning class size, McGee noted that one way to address the issue would be to cap enrollment in Advanced Placement (AP) classes, which have the largest enrollment. He stressed, however, that this is something the district is not planning to do.
At one point Wednesday, teacher-to-student ratios from Article 9 of the teachers' union's Collective Bargaining Agreement were read aloud for further clarification regarding class sizes.
Parent Todd Collins, a candidate for school board this fall, later noted that these ratios -- widely understood as averages -- are actually staffing ratios. This means that ratios do not correspond to the actual number of students in any given classroom, which is why sometimes there are large discrepancies between classes.
"I don't think there's ever been a board discussion about that," Collins said, adding that board policy is largely silent on class size.
He suggested that it would be fruitful for the board to facilitate a discussion about desired class sizes and standards.
McGee, whose past experience at a private school with smaller classes was alluded to at a couple of points in the meeting, said that one policy that he has seen work involves setting a minimum and maximum class sizes.
"I would love to hear what the community would like -- and how we'll fund it," McGee said.
One online commenter provided an alternative point of view about class size, suggesting that the quality of the teacher is more important than the class size.
McGee qualified this, saying that from his experience, he has been in classes of 30 that feel like 20 and vice versa.
Additionally, the town hall meeting clarified questions concerning any expectations that funding to make up the budget shortfall could come from the PTA and Partners in Education (PiE): McGee stated that there is no such expectation. When asked about how PiE funds are allocated, Mak said that PiE funds are part of long-term budgeting and that principals have control over how funds are used. Funds go toward a variety of needs, from enrichment activities to counselors.
In answer to a question regarding how much money is received from Proposition 30, Mak stated that $2.4 million is received annually and that it expires in 2018 unless it is renewed in November.
Before addressing questions and comments, McGee opened the meeting with a presentation that provided context concerning the budget shortfall and plans to address it in the next two years.
McGee reiterated that the shortfall for the district, whose budget relies largely on property-tax revenues, was largely due to unanticipated tax exemptions -- primarily $1.2 billion in exemptions from the major expansion of Stanford hospitals. Also, this year's property taxes increased at a lower percentage than expected, unlike in the last three years, which saw a large tax increase between June and July.
McGee also pointed out that since the news of the shortfall, the board has met with the Stanford individual in charge of filing exemptions and has been made of aware of the date exemptions are filed, as well as the fact that the district can be in conversation with the County Assessor, even on a weekly basis.
The board has resolved to address the shortfall over the next two years with the goal of not tapping into the district's reserves, which total $53.6 million -- 5 percent above the district's recommended reserve amount and 12 percent above the state's.
"It's kinda cloudy out, but it's not raining yet," McGee said, in reference to the district's current degree of concern.
District staff have proposed various means to compensate for the shortfall, including increasing rental income from district facilities, which was increased in July; district office budget reductions; rollbacks for recent funding additions including the per pupil amount, which right now stands at $75-175 per pupil; eliminating specific non-teaching-related personnel and positions; considering a new model for administrative salary increases that would include retroactive raises and non-compounded compensation; reallocating money for salaries and textbooks; and reinstating the practice of using the Strong Schools Bond Fund, rather than the General Fund, for upgrades to technology.
The 2016-17 budget schedule will be up for the school board's approval on Sept. 27. The next board meeting is Tuesday, Sept. 13, and the next town hall meeting and webinar about the budget is scheduled for Sept. 15.