News


District grapples with ongoing budget deficit

Palo Alto Unified's 2016 tax misestimation and 2017 contract blunder will affect bottom line for several years

Palo Alto Unified, a well-resourced district that has set ambitious and costly educational goals for the next several years, is facing a financial squeeze: There is no ongoing revenue to pay for budget additions in the next school year, staff said Thursday.

This prompted board President Ken Dauber to ask Interim Superintendent Karen Hendricks to come up with $3 million to $5 million in administrative cuts, an amount he warned "may not be ambitious enough" to address an ongoing deficit.

The school board discussed the 2018-19 budget at a special session on Thursday morning. The district is projecting deficits for the next three years: $3.5 million deficit this year, $500,000 next year and $1.6 million in the 2019-2020 school year.

The district has been grappling with budget woes since summer 2016, when staff's misestimate of property tax revenue caused a multi-million-dollar shortfall. And this past fall, the district realized that a contractual error would result in paying out $4.4 million in unbudgeted raises to teachers and classified staff, with a potential additional 2 percent bonus now under negotiation.

Meanwhile, school leaders have requested $1.68 million in additions for next year, from reading specialists for the elementary schools to campus supervisors to support school safety at the middle schools. Board members expressed support for funding some of these requests but did not take any concrete action.

Big-ticket items that the district has committed to pursuing also loom on the horizon, with no price tag as yet determined: closing the achievement gap, reforming special education and implementing new social-emotional curriculum at the middle and high schools, among other items. The board requested Chief Budget Officer Cathy Mak provide dollar estimates for these initiatives at a future meeting.

Board members made their own requests, too, including hiring a general counsel (which board members have speculated could cut down on the district's ballooning legal consultants' costs), reducing large class sizes and continuing to invest in compliance with federal law Title IX.

Absent from Thursday's budget projections were two items that will have a significant impact on the district's bottom line: 41 additional teachers who the district estimates it will need to hire over the next five years to address an increase in enrollment, and the impact of families moving into new housing to be built at Stanford University. Without a cost estimate for the teachers, "We're kind of shooting in the dark," Board Member Todd Collins said.

Board President Ken Dauber asked Mak to estimate how the additional teachers would impact the district's bottom line in the next few years; she said she would provide the information after the meeting. When the Weekly requested the information, she said it would not be available until the board's next budget discussion in February.

Several trustees urged a rethinking of the district's financial approach, which historically has been to roll over the budget each year and to look to one-time state funds and property taxes to fund additions. (A "strategy" to avoid significant budget cuts in 2018-19 "may be to use the one-time state grant as bridge funding in anticipation that more property tax revenue will be available in August," Mak wrote in a staff report.)

"We can't occupy ourselves with the peanut butter on top of this large budget," Dauber said. "If we try to cram all of our needs into the tiny amount of dollars that we might get from a one-time payment from the state or an increase in property taxes then we're going to miss the opportunity to make more significant changes that would enable us to do the things that we actually need to do."

He asked Interim Superintendent Hendricks to return to the board with the list of proposed administrative cuts. Hendricks is also preparing, at the board's request, to conduct an operational review of the human-resources and business departments, with an eye toward efficiencies that would save the district money. Board Member Melissa Baten Caswell said she's unsure that the district has the "expertise" in-house to conduct such a review and urged Hendricks to take advantage of community members who would be able to help.

She also advised against the district's historical methodology for streamlining: doing the same amount of work with fewer people, often causing things to to fall through the cracks.

"We can't just say less people, more hours," she said. "That's not efficiency."

The board plans to hold another budget study session in late February.

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Comments

92 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 19, 2018 at 3:46 pm

So cancel the money wasting and time wasting middle school name changes.


46 people like this
Posted by good grief
a resident of Barron Park
on Jan 19, 2018 at 4:09 pm

"the district realized that a contractual error would result in paying out $4.4 million in unbudgeted raises to teachers and classified staff, with a potential additional 2 percent bonus now under negotiation."

Why are these board members still on the board?


41 people like this
Posted by Confused
a resident of Downtown North
on Jan 19, 2018 at 4:26 pm

The district needs better financial staff.


37 people like this
Posted by Groundhog Day
a resident of Midtown
on Jan 19, 2018 at 11:37 pm

How is Kathy Mak still employed at the School District? Didn't she have significant responsibility in the property tax blunder?


82 people like this
Posted by common sense
a resident of Midtown
on Jan 20, 2018 at 7:09 am

Plenty of blame to go around:

- Scott Bowers who was negotiating for the district, knowing whatever the staff got for raises, he would get too; who then retired last year happy as a clam with his boosted retirement pay.

- Max McGee, who wanted a multi year deal so he wouldn't have to be bothered with salary negotiations each year.

- 4 of the Board of Education members, especially Baten-Caswell, who was elected for a 3rd term claiming the Board needed her experience in approving the budget busting agreement, and "finance-expert" Godfrey.

- Teachers union, who saw the district pass a new parcel tax that supposedly was to reduce class sizes, fund more mental health offerings, etc. and instead went after the parcel tax money to get existing teachers raises.

- PIE and PTA who pushed the parcel taxes and donations, but then fail to hold the Board accountable for not using the parcel taxes for their intended purposes. Instead those organizations act as extensions of the teacher unions and administration to curry favor.


24 people like this
Posted by are you kidding
a resident of Midtown
on Jan 21, 2018 at 11:21 am

"with a potential additional 2 percent bonus now under negotiation"

Why?

Why aren't those wimps on the school board telling them they've already gotten enough. At the expense of students' benefit, to boot.


11 people like this
Posted by They owe it
a resident of Adobe-Meadow
on Jan 21, 2018 at 12:11 pm

@are you kidding, it's worse than that. They already owe the 2% bonus, due to yet another contract screw-up. They are allegedly negotiating on whether they can get any of it back. Sigh.


36 people like this
Posted by Idea
a resident of Barron Park
on Jan 21, 2018 at 1:28 pm

Brilliant suggestion for new school names. Jordan is renamed Fiscal. And Terman Incompetence


21 people like this
Posted by Karl
a resident of Greater Miranda
on Jan 22, 2018 at 12:12 pm

The 2016 'staff's misestimate of property tax revenue' was not a 'misestimate'. Santa Clara County Assessor Larry Stone met with Mak, or her representative(s), quarterly to keep PAUSD informed of what they could expect in tax revenues. Mak and the district chose to ignore that warning of lower than anticipated revenue and chose to proceed with a very unrealistic revenue forecast to push through expensive raises. Then Max and Mak declared that they were 'surprised' by the problem. Surprised indeed. I am surprised that Mak is still holding the purse at PAUSD.


3 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jan 22, 2018 at 12:40 pm

Posted by are you kidding, a resident of Midtown

>> Why aren't those wimps on the school board telling them they've already gotten enough. At the expense of students' benefit, to boot.

Class, let's skip the invectives, shall we?

However, if the point you are making is that anyone who runs for the school board should realize that the budget is Job 1, well, I would agree with you. Budgets and salary negotiations are a lot of work and are boring. That is the job of the board and the Supervisor they hire. The rest of us can sit around and say, "Education is good!"


8 people like this
Posted by Stew Pid
a resident of Community Center
on Jan 22, 2018 at 2:06 pm

This is the very definition of the term cluster****


13 people like this
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Jan 22, 2018 at 3:36 pm

It has been my general experience that organizations that have not gone through protracted efforts to reduce expenses in a while accumulate unnecessary expenses. According to this theory, what the district needs to be doing is looking through the budget to see what (and who) can be cut.

This also should be done, at least initially, without any discussion of actually cutting services. Governmental bureaucracies have a tendency to want to make pointed cuts in "perceived high-value" services as a way of pointing out the consequences to the community and, in a way, "punishing" the taxpayers.

Residents and taxpayers need to remember that we are the customers, we are paying for this, and these are our children and grandchildren who are being educated. We actually have the power to make changes.

Talk to the board, write the board and express your views. The board folks are good people, they just don't get our perspective enough.


12 people like this
Posted by Term Limits
a resident of Jordan Middle School
on Jan 22, 2018 at 5:40 pm

Term Limits is a registered user.

Palo Alto Online's editorial was about term limits for Board of Education members.
Web Link

I usually oppose term limits as pushing out politicians before they can learn their job. But I now think Board Members who served too long brought us to disaster. It made them too chummy with Administrators, who got whatever they wanted.

The Board Member who opposes term limits was part of the group attacking those who warned of the impending financial problems as not supporting the teachers. Despite the long service, the Board Member raised no red flags when the Board was mislead being told Administrators were not getting the same raise they negotiated. It was right there in their contracts.

If you look at the past years, the two Board Members who were elected 3 terms made the bad financial decisions, attacked the disabled and bullied in their schools, and spent millions on lawsuits against their own students. They voted on a reorganization that put almost total power in the hands of one person, whom we learned altered documents and failed to investigate themselves. The full inclusion of the disabled and minorities we were told was 100% success is now reported as failing. There were no internal controls or oversight, and little to no external Board oversight.

Enough. We have to change this system.


1 person likes this
Posted by resident
a resident of Adobe-Meadow
on Jan 22, 2018 at 6:51 pm

A big issue is Bonds for schools. That seems to be the area where a lot of mismanagement comes into play. Alum Rock in Santa Clara County is literally trapped in a scheme where their bond funds have been taken over by a construction company to manage. Any attempt in the PAUSD to bring up a bond issue will be scrutinized.


Like this comment
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jan 22, 2018 at 7:03 pm

Posted by Term Limits, a resident of Jordan Middle School

>>> The Board Member who opposes term limits was part of the group attacking those who warned of the impending financial problems as not supporting the teachers. (etc.)

>>> If you look at the past years, the two Board Members who were elected 3 terms made the bad financial decisions, attacked the disabled and bullied in their schools, and spent millions on lawsuits against their own students. (etc.)

Term Limits, I don't think I have heard the situation described quite as graphically, but, I also am having trouble understanding exactly what you are saying. For example, the way the above is written, makes it sound like two School Board members attacked the disabled themselves. I'm not really sure what you intended to say, but, the two paragraphs need to be clarified and everything spelled out explicitly. I'm also puzzled that a minority of board members were able to do all that by themselves. Do you have links to Palo Alto Online news stories describing these incidents?


20 people like this
Posted by A Parent
a resident of Community Center
on Jan 22, 2018 at 7:28 pm

@Anon, I can help with that.

Ms. Caswell and Ms. Townsend both supported the 3 year teacher contract (disaster) despite their long tenure. The only one who opposed it was Mr. Dauber (2nd year on the board). Ms. Caswell and Ms. Townsend also were part of the group that actively fought the OCR, at times criticized parents who spoke out, and even supported paying lawyers to try to challenge the OCR's authority.

So if long tenure is supposed to equal wisdom and good judgment, in these cases it fails the empirical test. That could just be bad luck, who knows. But the reason term limits are applied at every level of government, from the City Council to the Governor and President, is that people find that the supposed "wisdom" isn't that great, and is overshadowed by the obvious drawbacks.

My experience is that board members need some knowledge, but much more, good judgment. "Inside knowledge" of how things work is over-rated - that's what the Superintendent is for. The board is supposed to represent the priorities of the community and oversee the Super's work. Life experience is helpful, I'd say; school board experience, less so.

@Term Limits - thanks for speaking out!


8 people like this
Posted by Jordan Middle School Parent
a resident of Jordan Middle School
on Jan 23, 2018 at 1:34 pm

Let's put the middle school renaming project(s) on hold until the District has a surplus


Like this comment
Posted by Term Limits
a resident of Jordan Middle School
on Jan 23, 2018 at 1:46 pm

Term Limits is a registered user.

A bit hesitant to comment on "Anon's" post because the requests in it are suspiciously similar to those of legal tactics of attorney's.

It requests information that is incredibly broad yet detailed request at the same time, which could never be answered in this forum. The questioner expresses faux surprise or puzzlement so great that to answer it, the respondent must spend an incalculable amount of time gathering information. Often the requester already has the information, or it is readily available to them.

The goals of this tactic can be: 1) Force the respondent to spend all their time answering the questions so they cannot not argue their point or simply go away, and/or 2) obtain material directly from the respondent to express further puzzlement about, thus sending them in a never ending cycle of answering questions, and/or 3) Attempt to make the commenter feel inferior and isolated by saying you cannot understand them, so they give up.

My concern is greater because since the topic of term limits surfaced, there are a suspicious number of posts in Palo Alto online that give the appearance they were written by political experts or attorneys. In other words appearing not to be written by readers of Palo Alto online, but politicians as part of a political effort. The last time I felt this was when reading posts related to the initial OCR finding that a child could not attend PAUSD schools due to bullying because of a disability.

However, presuming your request is sincere and you really want the information, I will suggest is that you conduct a search of all Palo Alto Online publications from 2013 to present. Search terms which may help you are 1. "Board of Education" 2. combined with"PAUSD", "Palo Alto Unified School District". Review the copious number of hits this provides. To save you time, as a starting point you can first review Palo Alto Online's Editorials and it's Newscasts "Beyond the Headlines". Presuming you did not attend or watch them live, you can also go to Mid Peninsula Media Center and watch all of the past broadcasts of Board of Education meetings AND Board of Education Retreats (both days, if broadcast) AND Board Policy Review Committee Meetings AND all Special Board Meetings. Make certain you review all Board meetings related to re-organization, attorney selection, in house counsel, student counseling and mental health, Special Education, Office of Civil Rights (OCR), minorities, bullying and budget.

To jump start your information, please read the Palo Alto online editorial on term limits, cited in the original post: Web Link


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

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