The Palo Alto school district has moved closer to providing concrete proposals for budget cuts that will help make up a budget deficit now estimated at $4.2 million, but some board and community members remain concerned that more specificity and recurring rather than one-time cuts are needed.
Two months after learning that property-tax growth came in far lower than the district budgeted for, resulting in the multi-million dollar shortfall, district leadership presented to the board Tuesday night a list of 14 possible areas for savings for the current school year and a more general list of suggestions for the 2017-18 school year.
The 14 proposals are a mix of one-time and some years-long savings. The largest amount, $1.2 million, comes from general funds that in previous years have been spent on technology updates (bond funds would be used instead for the technology upgrades). New proposals include rescinding staff additions and finding operational savings at the district office, cutting back on professional-development funding, placing a hiring freeze on certificated positions that the district has not been able to fill this year and using a 2015-16 budget surplus of about $800,000, which would otherwise go into the district's reserves.
However, Superintendent Max McGee said the district is no longer proposing to dip into reserves to address the shortfall.
"Reserves are for a rainy day and it's cloudy at the moment, so I think we’re best off leaving those untouched because there may be a rainy day in the future," he said.
Trustees continued to disagree over the urgency of the shortfall. Ken Dauber reiterated that the budget deficit is structural and ongoing, and said he doesn’t agree with staff's characterization that the district will be able to make up the shortfall in two years given the district's own projections now show deficits beyond that, though other board members said they're comfortable with that timeline.
Dauber continued to insist on more specific spending cuts for this year and next that will allow the board to more fully assess and then prioritize its budget decisions.
"I'm going to continue to press for faster, (for) more detail and (for) the board to be able to make a decision about whether we should be cutting spending now rather than later, which is my perspective," he said.
Camille Townsend, however, cautioned, "you can't do things too fast that you throw your world into chaos."
"I'm not interested in that," she added. "I’m into thoughtful, deliberate, over-time, intentional work."
Parent and school-board candidate Todd Collins again made a plea to the board to "increase the urgency with which you pursue expense cuts that impact this year and going forward."
"Please insist on getting options, so you can weigh against one-time accounting moves, borrowing, and use of reserves," he said. "It is wisely said, 'Good options make good choices.'"
Several board members were worried that some of staff's proposals for this year, including placing a hiring freeze on instructional coach and math-specialist positions that the district has not been able to fill or capping popular electives, stray from the district’s oft-cited value of "cutting away from the classroom." They suggested looking for other operational savings instead, from re-examining the human resources department to even cutting back on landscaping services.
For the 2017-18 year, McGee offered six suggestions for savings that total about $4 million. They are: changing budget projections that will likely yield more money throughout the year, he said; further operational and personnel cuts at the district office; alternative funding sources such as increase in rental income; identifying programs and positions that have been added in recent years that may no longer be necessary and can be rolled back; capping electives and consolidating small classes; and likely adjustments for raises promised to both teachers and administrators for the 2017-18 year.
While McGee and the majority of the board have not supported a proposal from Trustee Ken Dauber to roll back a 4 percent raise for administrators this year to save money, McGee said Tuesday that the district will be looking to revise its longtime "me too" system that automatically provides senior administrators the same compensation rate negotiated for teachers.
Chief Budget Officer Cathy Mak also provided on Tuesday adjusted five-year budget projections that use an even lower property-tax growth estimate that came in just last month. According to a new estimate the district received in late August from the Santa Clara County Controller-Treasurer Department, estimated property-tax growth for the 2016-17 year is now at 4.61 percent, slightly below the July projection of 5.34 percent. Mak said this drop is typical and she expects actual revenue growth to be higher by the end of the fiscal year.
For the first time, Mak's budget projections also included the cost of providing 1 percent raises for teachers for the next five years.
Collins worried, however, that this compensation level isn't realistic given that over the last 15 years, the district has provided an average raise of 2.9 percent, he said.
The board is scheduled to vote on the 2016-17 budget at its next meeting on Sept. 27. McGee said he will provide more detail about his 2017-18 recommendations a month later, at a planned Oct. 18 budget workshop.
Over the next month, district staff plans to meet with various stakeholder groups in the district -- the teachers and classified unions, Parent Teacher Associations and Partners in Education (PiE) -- to review these proposals.
The district is also holding a second town hall meeting on the budget shortfall to solicit further community input on Thursday, Sept. 15, 7-8:30 p.m. It will take place at the district office, 25 Churchill Ave., but also be streamed online. For more information and to register for the live-streaming, go to pausd.org.
On Tuesday, McGee also vowed to protect class sizes despite the budget deficit, and said the secondary schools have average class sizes that are less than or equal to last year’s.
In a separate agenda item focused on enrollment and class size, he asked trustees if they were interested in developing a more specific class-size policy that would go beyond the district's current metric -- average student-teacher ratios in the teacher's union contract -- and/or to reopen negotiations on class size with the teacher's union. The board did not express support for either suggestion, worrying about the unintended consequences more rigid limits could have on students.
Board members asked for more detailed data around class size than was provided Tuesday, such as how many sections fall above or below a certain level rather than providing just the minimum and maximum numbers and averages.
A more nuanced understanding of what teachers and students experience, such as the effect of class size on different subject areas, is needed, board members said, urging staff to solicit further feedback.