A majority of the Palo Alto school board backed a series of budget measures -- some ongoing, some short term; some non-instructional and others closer to the classroom -- to make this year to start to mitigate a $4.2 million deficit, despite the continued urging of one trustee to take a more "prudent" approach.
In a 4-1 vote, with Trustee Ken Dauber dissenting, the board approved $3.4 million in budget measures recommended by staff. The list of 13 proposals -- some budget cuts and others, alternative revenue sources -- for the 2016-17 year include trimming $612,000 from the district office, using voter-approved bond funds instead of General Fund dollars to pay for $1.2 million in technology upgrades and redirecting an estimated $773,000 from reserves, among others.
Calling the district’s approach fiscally irresponsible, Dauber proposed several amendments to this list, none of them gaining support from his colleagues.
By Dauber's own analysis, just over half of the measures the board ultimately approved are temporary (about $2.4 million) and the rest (about $1.8 million) are long term. They’re also closely split between non-instructional and instructional cuts, he said -- about $612,000 of the former and about $500,000 of the latter.
"I don’t believe that this recommendation represents a fiscally responsible approach to our budget problem, as I’ve said in the past, in that it relies substantially on spending district reserves, the fund balance and on borrowing to close a gap that I think we should be instead looking to close through cutting spending that isn’t related to our educational mission," Dauber said.
Dauber unsuccessfully advocated for finding more long-term, recurring and non-instructional cuts in this year’s budget. He proposed that the board direct the superintendent to come up with potential ongoing expense cuts instead of borrowing by using the bond funds for technology updates and spending reserves; to rescind the most recent salary increase provided to non-represented senior administrators effective Oct. 1; to further reduce non-instructional spending and redirect savings from unfilled teachers and specialists positions back to the classrooms; and eliminate the district's new full-time communications coordinator position, effective Nov. 1.
Though none of his colleagues seconded these amendments, several did express support for considering some of his proposals for the 2017-18 budget and beyond. Some also said they support revising the district’s longtime practice of automatically providing senior administrators the same compensation increases negotiated with the teachers union.
Dauber also reiterated concerns about the effect the budget shortfall could have on class sizes at the district's two high schools, which are starting to see increased enrollment as a large "bubble" class moves through the middle schools.
While the district has set aside dollars in the budget to hire more teachers to accommodate enrollment growth, “the risk that we’re running in not cutting our non-educational spending now is arriving at that point without the funds to hire those teachers," Dauber said.
His colleagues, by contrast, supported the staff recommendation without much hesitation. They argued that using the bond funds for technology upgrades is appropriate given it’s what voters approved those dollars for; that the district will not dip into reserves to the point that they drop below a required level; and that looking for more savings at the district office, for example, successfully keeps cuts farther away from students in the classroom.
Trustee Camille Townsend, however, was again critical of the district’s decision to enter into its first-ever multi-year contract with the teachers and classified unions. Promising three years of raises when the district receives much critical budget information, such as property-tax revenue, late in the fiscal year, was a "huge mistake," she said.
Vice President Terry Godfrey also recounted a meeting she and President Heidi Emberling had with the Santa Clara County Assessor last week to better understand how the district can avoid being surprised again by lower-than-projected property-tax revenue. District staff have said they are now in more consistent communication with the assessor’s office, as well as with Stanford University officials to monitor property exemptions that come in from the university’s major hospital construction.
Parent Todd Collins, who is running for a seat on the school board in the November election, echoed Dauber’s criticisms, arguing that the approach of using reserves and bond funds is "actually increasing the risk to the things we really care about -- preserving electives and favorite programs, reducing class sizes, funding our special ed and achievement-gap programs.
"We need to stop spending reserves now so we have them when we really need them," Collins said, pointing to projections that show at least five years of multi-million dollar deficits -- deficits that grow substantially depending on the size of compensation increases for teachers. (Employee salaries and benefits account for 85 percent of the district’s overall expenditures).
While Tuesday's discussion was mostly limited to this year’s budget, the largest proposal for savings next year by far is an estimated $2.5 million, which the district attributes to re-negotiating compensation increases with the district’s teachers and classified unions, as well as adjusting raises provided to senior administrators. The district’s current five-year forecasts, though "for projection purposes only," use 1 percent raises from 2018-19 through 2020-21. The new multi-year contracts originally promised a 12 percent base salary increase for teachers over three years.
The board will hear more concrete staff recommendations around measures for the 2017-18 budget at a special meeting on Tuesday, Oct. 18, which Emberling called a "great opportunity" to evaluate $13 million in programs, services and positions the district has added over the last four years.
How would the candidates vote?
As part of the Palo Alto Weekly's election coverage, we will be asking the candidates who are running for Palo Alto Board of Education how they would vote -- and why -- on significant issues that the board takes action on before November.
This week, the Weekly asked the three non-incumbent candidates how they would vote on the two budget options presented to the board Tuesday night and if they would have seconded several failed amendments proposed by Trustee Ken Dauber.
Jay Cabrera: I would vote "yes" on option two in relation to the recommendations of the staff.
In regards to my overall perspective, we should be cutting less line items affecting student education, and reducing the amount of money in the reserves.
I do not agree with the budget process, and want it to be much more participatory. I also do not agree that 10 percent of the budget should be in reserves. The taxpayers pay the money to be spent on student education, not just (to) sit there waiting for a rainy day. I understand having some reserves, but we are talking about the ability to spend an extra million dollars a year for over 30 years.
Editor's note: Cabrera said after deadline for this story that while rescinding managers' raises is "very difficult and has other consequences," Dauber's other proposals are "quite reasonable."
Todd Collins: I would not have voted for the budget-balancing options presented. As I said last night, the proposed approach -- relying almost exclusively on spending reserves, borrowed funds and not filling instructional positions -- actually increases the risk that we'll have larger class sizes, fewer electives and fewer student programs later, when the inevitable cyclical downturn comes. We're using reserves that we may need later, without even considering potential expense cuts -- that's not prudent.
I would have seconded the amendments proposed by Mr. Dauber, since they called for the superintendent to provide options to the board for cutting expenses this year, as an alternative to spending reserves and borrowing. This is what the board has needed all along. "Good options make good choices" -- the board has needed meaningful options to look at and discuss, but none have been presented.
I would not have voted for the option that went forward. We have a structural budget deficit and I prefer to fix the problem sooner rather than later. Currently, we are addressing the immediate shortfall for this year, as well as looking ahead to next year to make cuts that bring us within budget. Last night’s proposal draws too significantly from temporary buckets of money that will not sustain us going forward. I would have liked to have seen more immediate operational cuts.
I would not, however have voted in support of Mr. Dauber’s amendments. Class size is an issue and must be addressed by the board but the three unnecessary elementary positions do not solve this issue. And, while I support ending the "me, too" raises, I am not in favor of rescinding what has already been provided to our principals who are balancing a monthly budget.
Editor's note: DiBrienza clarified after providing her initial response that she would have supported Dauber's first proposal to direct the superintendent to identify ongoing expense cuts for this year instead of borrowing by using the bond funds for technology updates and spending reserves, but not his other amendments.