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Coronavirus will impact school budgets for years to come. Trustees are urging 'aggressive' financial conservatism

Board of Education supports using district's reserves to address shortfall

Facing the likelihood that the coronavirus will impact the Palo Alto school district's budget for several years, members of the Board of Education on Tuesday urged taking a conservative, "aggressive" approach to budget cuts to stave off deep deficits.

The district is facing a $3 million shortfall this year as a result of both lost revenue and increased spending related to school closures and the pandemic. The "moderate" budget forecast presented by staff projects deficit spending over the next three years if the district doesn't make cuts.

How much revenue the district will have in the coming years remains uncertain, with the renewal of a parcel tax, property tax revenue and facility rentals (including the city's lease of Cubberley Community Center) up in the air due to the virus. The state is facing a $54 billion deficit, though as a community-funded district Palo Alto Unified is less reliant on state funding. The district also is eyeing large, long-awaited investments in special education and dyslexia over the next three years.

School board members said Tuesday they support using the district's reserves to address the shortfall.

"It's not a question of being willing to dip into reserves," said school board member Ken Dauber. "We have to if we're not going to make choices that are pretty catastrophic.

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"It's for a rainy day," he said of the reserves. "It's clearly raining."

Staff presented two plans for cuts to the 2020-21 budget on Tuesday. One would save $3.7 million by cutting four administrators, 13 certificated staff and seven classified staff as well as contracted services and summer school offerings. The second plan proposes an additional $2 million in cuts if necessary, primarily in classified staff positions. District leadership put forward reductions that wouldn't negatively impact class sizes or course offerings, Superintendent Don Austin said.

While the publicly posted plans didn't mention any specific positions that would be eliminated, a proposal to restructure the district's instructional leaders positions -- including for visual and performing arts, physical education and career technical education -- was sent to teachers prior to the meeting, sparking concern.

Well over a dozen teachers, parents and students called into the virtual board meeting to speak out against the restructuring (which has been in the works for over a year, Austin said in an interview after the meeting). They argued that the visual and performing arts instructional leaders are particularly crucial to the health of arts education in the district.

One board member, Melissa Baten Caswell, agreed and said she would trade off increasing class sizes to preserve the visual and performing arts (VAPA) instructional leaders' positions.

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"These programs that bring together everybody from the worst performing student academically to the best performing student in the same room, working together on a choir performance — it's the great equalizer," she said. "But I don't know if we can have that same impact if we don't have some sort of leadership fulcrum there, and right now that's our instructional lead for the VAPA program."

Austin responded that the arts program is "heavily, heavily resourced," with department leaders, team teaching and full-time teachers on special assignment in addition to the instructional leaders.

Dauber and board President Todd Collins urged a bigger-picture mindset when it comes to budget cuts.

"We're not posing a fundamental threat to the quality of our arts or other programs," Dauber said. "We are not going to get through this if we scrutinize decisions that make a lot of sense. I think we need to enable staff to make these judgments without exhaustive board review."

The school district has lost an estimated $1.7 million out of its $256 million total budget during the school closures, according to a staff report. With all of its campuses shut down, the district has lost revenue from school lunches and facilities that would usually bring in rent from outside groups who use them for summer camps and after-school programs.

Meanwhile, adjusting operations to the coronavirus has cost the district about $1 million, including developing distance learning, providing resources for remote working conditions, purchasing $16,000 worth of hand sanitizer and paying salaries for workers who are considered essential.

Staff is recommending the district create a $500,000 contingency fund to address emergency COVID-19 expenditures in the 2020-21 school year, such as purchasing masks for staff and students.

Board members also briefly discussed the potential impact of cuts the city of Palo Alto could make to services that students and families use, as well as the possibility of the city pulling out of its lease at Cubberley Community Center. The district owns 27 acres at Cubberley and leases them to the city, which in turn rents the facilities to various nonprofits, studios and sports groups. The city owns the remaining 8 acres of the widely used community center at 4000 Middlefield Road.

In response to a question from Baten Caswell, Austin said he doesn't think the district will be in a position where it's no longer receiving any rental revenue from the $5 million city lease, and that a reduction to about $2.5 million to $3 million is more likely.

The board will discuss the budget again in early June and is set to adopt it on June 23.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

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Coronavirus will impact school budgets for years to come. Trustees are urging 'aggressive' financial conservatism

Board of Education supports using district's reserves to address shortfall

by / Palo Alto Weekly

Uploaded: Wed, May 13, 2020, 9:19 am

Facing the likelihood that the coronavirus will impact the Palo Alto school district's budget for several years, members of the Board of Education on Tuesday urged taking a conservative, "aggressive" approach to budget cuts to stave off deep deficits.

The district is facing a $3 million shortfall this year as a result of both lost revenue and increased spending related to school closures and the pandemic. The "moderate" budget forecast presented by staff projects deficit spending over the next three years if the district doesn't make cuts.

How much revenue the district will have in the coming years remains uncertain, with the renewal of a parcel tax, property tax revenue and facility rentals (including the city's lease of Cubberley Community Center) up in the air due to the virus. The state is facing a $54 billion deficit, though as a community-funded district Palo Alto Unified is less reliant on state funding. The district also is eyeing large, long-awaited investments in special education and dyslexia over the next three years.

School board members said Tuesday they support using the district's reserves to address the shortfall.

"It's not a question of being willing to dip into reserves," said school board member Ken Dauber. "We have to if we're not going to make choices that are pretty catastrophic.

"It's for a rainy day," he said of the reserves. "It's clearly raining."

Staff presented two plans for cuts to the 2020-21 budget on Tuesday. One would save $3.7 million by cutting four administrators, 13 certificated staff and seven classified staff as well as contracted services and summer school offerings. The second plan proposes an additional $2 million in cuts if necessary, primarily in classified staff positions. District leadership put forward reductions that wouldn't negatively impact class sizes or course offerings, Superintendent Don Austin said.

While the publicly posted plans didn't mention any specific positions that would be eliminated, a proposal to restructure the district's instructional leaders positions -- including for visual and performing arts, physical education and career technical education -- was sent to teachers prior to the meeting, sparking concern.

Well over a dozen teachers, parents and students called into the virtual board meeting to speak out against the restructuring (which has been in the works for over a year, Austin said in an interview after the meeting). They argued that the visual and performing arts instructional leaders are particularly crucial to the health of arts education in the district.

One board member, Melissa Baten Caswell, agreed and said she would trade off increasing class sizes to preserve the visual and performing arts (VAPA) instructional leaders' positions.

"These programs that bring together everybody from the worst performing student academically to the best performing student in the same room, working together on a choir performance — it's the great equalizer," she said. "But I don't know if we can have that same impact if we don't have some sort of leadership fulcrum there, and right now that's our instructional lead for the VAPA program."

Austin responded that the arts program is "heavily, heavily resourced," with department leaders, team teaching and full-time teachers on special assignment in addition to the instructional leaders.

Dauber and board President Todd Collins urged a bigger-picture mindset when it comes to budget cuts.

"We're not posing a fundamental threat to the quality of our arts or other programs," Dauber said. "We are not going to get through this if we scrutinize decisions that make a lot of sense. I think we need to enable staff to make these judgments without exhaustive board review."

The school district has lost an estimated $1.7 million out of its $256 million total budget during the school closures, according to a staff report. With all of its campuses shut down, the district has lost revenue from school lunches and facilities that would usually bring in rent from outside groups who use them for summer camps and after-school programs.

Meanwhile, adjusting operations to the coronavirus has cost the district about $1 million, including developing distance learning, providing resources for remote working conditions, purchasing $16,000 worth of hand sanitizer and paying salaries for workers who are considered essential.

Staff is recommending the district create a $500,000 contingency fund to address emergency COVID-19 expenditures in the 2020-21 school year, such as purchasing masks for staff and students.

Board members also briefly discussed the potential impact of cuts the city of Palo Alto could make to services that students and families use, as well as the possibility of the city pulling out of its lease at Cubberley Community Center. The district owns 27 acres at Cubberley and leases them to the city, which in turn rents the facilities to various nonprofits, studios and sports groups. The city owns the remaining 8 acres of the widely used community center at 4000 Middlefield Road.

In response to a question from Baten Caswell, Austin said he doesn't think the district will be in a position where it's no longer receiving any rental revenue from the $5 million city lease, and that a reduction to about $2.5 million to $3 million is more likely.

The board will discuss the budget again in early June and is set to adopt it on June 23.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

Comments

Independent
Esther Clark Park
on May 13, 2020 at 10:29 am
Independent, Esther Clark Park
on May 13, 2020 at 10:29 am
42 people like this

Student enrollment is DOWN and projected to continue to decline further. It is time to rightsize PAUSD. Labor costs need to be cut; some staff will need to go.


Budget Reality
Downtown North
on May 13, 2020 at 10:40 am
Budget Reality, Downtown North
on May 13, 2020 at 10:40 am
47 people like this

PAUSD has a quarter billion dollar budget and managed to overspend it. The board and the managers should all be fired.

That's a quarter billion for about 12,000 kids. We are over $21,000 per year per kid and somehow still over budget. Meanwhile, no one is raving about the PAUSD school experiences like they used to. To the contrary.

That's a pretty stark reality.

This is the same organization that tells parents they won't have science, art, or music without personal donations.


Anon
Another Palo Alto neighborhood
on May 13, 2020 at 10:50 am
Anon, Another Palo Alto neighborhood
on May 13, 2020 at 10:50 am
4 people like this

>> "It's for a rainy day," he said of the reserves. "It's clearly raining."

Absolutely. This is what reserves are for. Not everybody seems to understand that this is going to have a long-term impact. We can't pretend "business as usual".

>> Staff presented two plans for cuts to the 2020-21 budget on Tuesday. One would save $3.7 million by cutting four administrators, 13 certificated staff and seven classified staff

How much would be saved just by cutting the administrators? What jobs do the classified staff do? Obviously, we all want to keep as many real teachers as possible. But, that is going to put more work on the teachers to do stuff that other staff/administrators are doing now. I hope the teachers will support that organizationally-- the alternative is to cut teachers.


Just Sayin'
another community
on May 13, 2020 at 10:58 am
Just Sayin', another community
on May 13, 2020 at 10:58 am
18 people like this

Worth mention:
It was also expressed several times during the Board meeting that:
1) The arts are important to the mental & emotional health of many, many students.
2) It's not ok to give preference to STEM over the arts.


Anon
Another Palo Alto neighborhood
on May 13, 2020 at 11:19 am
Anon, Another Palo Alto neighborhood
on May 13, 2020 at 11:19 am
20 people like this

Posted by Just Sayin', a resident of another community

>> 1) The arts are important to the mental & emotional health of many, many students.

Agreed.

>> 2) It's not ok to give preference to STEM over the arts.

I would add vocational ed to that. Not every student in PAUSD is destined for University of California level universities. Not necessarily University-of-Anything. There are plenty of CC/CSU or even no-college kids in PAUSD that are ignored, at best.


member
Crescent Park
on May 13, 2020 at 11:37 am
member, Crescent Park
on May 13, 2020 at 11:37 am
10 people like this

my kids have stem majors and would not
t have acceptance letters without their 4 years in the arts.

almos all their peers grew up with musc and art : stem is not separate from music

would have n
been nice to see stem staff support music and arts

i guess they are too busy clicking on links to send kids and making up grading policies against don austen’s directives.

threat of a failing grade if paly sci kids don’t jump through new online hoops

teachers look at score only. there is no teaching

kids need the arts to experience beauty and people who know not to threats
en failing grades during a pandemic


Independent
Esther Clark Park
on May 13, 2020 at 11:44 am
Independent, Esther Clark Park
on May 13, 2020 at 11:44 am
27 people like this

@Budget reality --- btw pre covid PAUSD has unfunded liabilities of $187 million for teachers and $62 million for classified staff. Web Link
That nets out to a debt/Palo Alto household of $9000 --- $9000/each Palo Alto household owes for unfunded PAUSD pensions. That gives you an idea how well they are managing our tax dollars --- current consumption is obviously been too high.

Plus they're not delivering much of any instruction to our kids.

Time to cut labor costs. Now.


TimR
Downtown North
on May 13, 2020 at 11:57 am
TimR, Downtown North
on May 13, 2020 at 11:57 am
23 people like this

But Paly's still getting new grass for the football team to play on (it's going in right now). And that's what matters most!


Anon
Another Palo Alto neighborhood
on May 13, 2020 at 12:15 pm
Anon, Another Palo Alto neighborhood
on May 13, 2020 at 12:15 pm
4 people like this

Posted by Independent, a resident of Esther Clark Park

>> That nets out to a debt/Palo Alto household of $9000 --- $9000/each Palo Alto household owes for unfunded PAUSD pensions. That gives you an idea how well they are managing our tax dollars --- current consumption is obviously been too high.

Independent-- I'm in favor of forward-funding pensions 100%. That hasn't been standard practice, but, I would go for it. If the State would set up a reliable "lock-box" trust fund to hold the money, I would vote for a property-tax surcharge to pay it off over the next, say, 5 years.

But, I'm NOT in favor of abolishing pensions. Pensions are there because nobody knows how long they will live, and, it actually would be economically infeasible and even damaging if everyone saved/invested enough to cover the "worst case" of living to, e.g., 100.


It's pouring
Midtown
on May 13, 2020 at 12:41 pm
It's pouring, Midtown
on May 13, 2020 at 12:41 pm
15 people like this

Are admin pay raises still connected to teacher pay raises? How much could be saved if annual pay increases negotiated by the teachers union and possibly also extended to admin staff were frozen?

Desperate times will call for a bit of sacrifice for all. Covid is not magically going away come fall.


Fact Checker
Duveneck/St. Francis
on May 13, 2020 at 1:04 pm
Fact Checker, Duveneck/St. Francis
on May 13, 2020 at 1:04 pm
16 people like this

Questions?

Why did senior admin not propose to take pay cuts before they started cutting programs. It is not atypical for senior staff to take the first cuts. Senior District Admin earn $200K to over $300K (Superintendent). A

Are senior staff "taking" their contractual step increases?

What is the District philosophy for cuts? At least MBC started asking the right questions. Do we want to protect programs that will sustain our students or do we want to figure out how to make class sizes larger. These are important questions and totally appropriate for the Board to direct admin to do. Specifically, why cut ILs who can help us transition to distance learning and larger class sizes saving much more in the long term than in the short term.

If we are cutting ILs, why are we not cutting them proportionately? Some departments have more time for ILs, if a department (like choir or art, only has one period of IL time and we cut that IL time, then we've cut 100% of the time. We make no value judgment when we cut all departments by 1/4 (for example).


Resident
Another Palo Alto neighborhood
on May 13, 2020 at 1:10 pm
Resident, Another Palo Alto neighborhood
on May 13, 2020 at 1:10 pm
28 people like this

Any time I have been in a school office or at Churchill, there are people standing around chatting, laughing, often looking as if they have nothing to do.

Perhaps it is time to whittle down admin.


Green Gables
Duveneck/St. Francis
on May 13, 2020 at 1:13 pm
Green Gables, Duveneck/St. Francis
on May 13, 2020 at 1:13 pm
33 people like this

Administration at PAUSD should take a temporary cut in pay. How about 10%?


Samuel L.
Duveneck/St. Francis
on May 13, 2020 at 1:16 pm
Samuel L., Duveneck/St. Francis
on May 13, 2020 at 1:16 pm
26 people like this

When was the last time pay was ever cut at PAUSD? If anyone has an answer that'd be an interesting fact. Given that PAUSD continues to use the phrase "unprecedented times" to preface or excuse any shortcoming, let's see if they're willing to take unprecedented actions.


Resident 2
Fairmeadow
on May 13, 2020 at 1:20 pm
Resident 2, Fairmeadow
on May 13, 2020 at 1:20 pm
5 people like this

If everyone were taking pay cuts, then certainly senior mgrs should too. But I would think that the unions would have to agree to any pay cut, even temporary, and I don't see that happening. Have you seen other city or school agencies do that? I have not. Stanford Hospital (a private non-profit) did 20% across the board cuts but that's the only one I've seen.


Independent
Esther Clark Park
on May 13, 2020 at 1:27 pm
Independent, Esther Clark Park
on May 13, 2020 at 1:27 pm
13 people like this

@Anon - no one suggested abolishing pensions. The point is that PAUSD's current consumption (the salaries paid and benefits awarded as they represent 86% of PAUSD expenditures) has been too high --- because they have allowed unfunded pension liabilities to build up over time. For those unfunded pension liabilities to be fully funded, money has to be devoted to pay those off, rather than going to fund salary increases, or further benefit increases.

And no, definitely would not be in favor of any extra property tax surcharges to pay for this ---- PAUSD can make do with our already generous property taxes --- just about higher than anywhere else in the state.


Fiscal responsibility
Another Palo Alto neighborhood
on May 13, 2020 at 1:34 pm
Fiscal responsibility, Another Palo Alto neighborhood
on May 13, 2020 at 1:34 pm
20 people like this

I appreciate the need for deep cuts, but how about we don't use the word "conservatism" - in recent decades that word has stood for running up big debts and deficits while pointing fingers at political opposition, hollowing out good governance from the inside and making spendthrift cuts in services, in short, being the OPPOSITE of fiscally responsible.


Fact Checker
Duveneck/St. Francis
on May 13, 2020 at 1:47 pm
Fact Checker, Duveneck/St. Francis
on May 13, 2020 at 1:47 pm
17 people like this

The union cannot be the only one to bear fault. Teri Baldwin will take everything she can get, but does our Administration have to hand it to her on a silver platter. I don't think so.

Don Austin approved the MOU on 3/25 that gave teachers full pay with no live teaching requirement from the closure through the end of this school year. The Board didn't question it.

The administration needs to take the first pay cuts and lead the way before cutting student programming. It's irrelevant if it's never happened before. Everything is new game, new rules.


Health Commissar
Midtown
on May 13, 2020 at 3:39 pm
Health Commissar, Midtown
on May 13, 2020 at 3:39 pm
11 people like this

Time to open up the county again so that it can earn some tax revenues. Otherwise, there will be no revenues to fund anything — including schools.


Anon
Another Palo Alto neighborhood
on May 13, 2020 at 3:47 pm
Anon, Another Palo Alto neighborhood
on May 13, 2020 at 3:47 pm
11 people like this

Posted by Health Commissar, a resident of Midtown

>> Time to open up the county again so that it can earn some tax revenues.

Time to open low-risk businesses and activities, perhaps. Not all businesses have the same risk to the public. I am opposed to this "open everything at once" idea -- that policy very likely will lead to a high impact on the general public. Businesses that are low-contact are much less risky to the general public than, e.g., bars, crowded restaurants, basketball games, and, sadly, large funerals ...

Please accept that not all businesses have the same risk to the public.


Realtalk
Professorville
on May 13, 2020 at 11:53 pm
Realtalk, Professorville
on May 13, 2020 at 11:53 pm
4 people like this

Don Austin’s comment on all the “heavy” arts resources is a calculated one.

Department leaders = stretched thin assistant principles who have little to no experience in art education and advocacy.

Sure co-taught classes but those classes are the large ensembles with 70+ kids. Essentially 1 teacher for 35 students (when the average class is around 28.) That seems pretty reasonable.

And the part-time TOSA is to replace a full-time admin the program lost last year.

PAUSD find the money for this VAPA IL somewhere else. Our kids need these programs to remain vibrant to stay connected healthy. When you cut off their lifeline to the district these wonderful programs will diminish. This decisions effects our students.


LJLC513
Stanford
on May 14, 2020 at 6:04 pm
LJLC513, Stanford
on May 14, 2020 at 6:04 pm
13 people like this

Austin's statement that the Arts are "heavily, heavily resourced," with department leaders, team teaching and full-time teachers on special assignment." Didn't he eliminate an Art Administrator last year? And I know one of the Spectra Art teachers is being guided by ONE TOSA, who is only 40%, so that one TOSA can't even get out into the classrooms because she herself is still teaching three classes. And the music class that my student is involved in at Gunn has 108 kids in it! They BETTER have two teachers for that many kids! Austin doesn't even know his own district or the facts.

"department leaders, team teaching and full-time teachers on special assignment": I know that the electives department at each of the middle schools has a department lead that covers all electives, including the Arts for a tiny stipend.

I was also quite disturbed by the superintendent's dismissive tone and lack of respect toward Ms. Baten Caswell.


LJLC513
Stanford
on May 14, 2020 at 6:10 pm
LJLC513, Stanford
on May 14, 2020 at 6:10 pm
9 people like this

I've watched that budget presentation several times and it looks like the district is adding $9 million in SpEd costs, and cutting $8 million. Does that really make sense right now?!


Taxpayer
Duveneck/St. Francis
on May 14, 2020 at 10:22 pm
Taxpayer, Duveneck/St. Francis
on May 14, 2020 at 10:22 pm
3 people like this

No raising property taxes! They are outrageously high already and no, we didn’t just buy our home recently.
How about 10% across the board pay cut for ALL staff?
Oh, I forgot, unions rule.


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