News

Editorial: Suddenly, a school budget crisis some feared

Tax growth falls short of Palo Alto school district's projections

The Palo Alto Unified School District's new fiscal year is just 15 days old, but the impossible has already happened.

Less than a month after approving a budget that relied on an almost 9 percent increase in property-tax revenue for the coming year, the district has learned that the Santa Clara County Assessor is projecting an increase of just over 5 percent.

The shortfall will be about $5.2 million, although the actual budget impact will be around $3.7 million due to the automatic elimination of a 1 percent bonus for employees in 2017.

The error stems from the district incorrectly interpreting interim county numbers that included about $1.2 billion in tax-exempt property-valuation increases for the new Stanford hospitals.

The revelation is a severe blow to the district and raises serious questions about the due diligence performed by Superintendent Max McGee and his staff and the board's fiscal oversight. County Assessor Larry Stone told the Weekly the growth numbers should not have come as a surprise to the district given the regular meetings his office has with all school-district financial officers and the cautions given about exemptions and other variables.

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In a robust economy with growing property-tax revenues and a newly approved and increased parcel tax, the Palo Alto school district shouldn't have to budget revenues aggressively or draw on reserves. Reserves are for rainy days, not for use during peak periods of economic growth.

The board should never have approved three-year labor contracts in late May when accurate tax-revenue data would be available just a few weeks later. And it should not have granted "me too" retroactive salary increases to non-union managers and administrators.

In an email Wednesday morning to the board, top administrators and principals, McGee said he was "surprised and disappointed" to learn the news. He suggested that instead of making expense cuts to offset the revenue shortfall, the gap should be funded from reserve accounts, an action that would effectively sweep this major problem and embarrassment out of public view as if nothing happened.

With 85 percent of the district's expense budget going to compensation and benefits, and more than 71 percent of the revenues coming from property-tax revenue, these are the two drivers that require the utmost scrutiny, analysis and public debate.

Concern over the district's vulnerability to errors in the projection of property-tax revenue was raised by board member Ken Dauber when the union contracts were up for approval in May, but his four colleagues were all satisfied that the 2016-17 revenue projections were solid and voted in favor of the contracts, and a month later, for the budget.

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The budget problem is a further blow to parents who have shown that class sizes in the middle and high schools have been consistently larger than the averages set by board policy. Dauber and these parents unsuccessfully argued that the hiring of the additional teachers to bring the class sizes down, especially in core academic classes, should be a top budget priority. With the latest budget problem, it now seems even more unlikely that there will be money available for this correction.

Except for Dauber, school board members were persuaded by McGee and Chief Budget Officer Cathy Mak that the district would have 18 months' advance warning of lower rates of property-tax growth, based on being able to see home-sale data trends in advance of the actual changes in tax payments, and therefore plenty of time to adjust budgeting. Neither McGee nor Mak mentioned the risk that property-assessment numbers could be impacted by tax exemptions.

School-district budgeting is never an exact science, but Palo Alto has made a big "miss" that is compounded by the generous (and first ever) three-year labor contract just approved.

McGee and his staff now need to present the board and public with a clear picture of the financial road map forward, including how he expects to balance the 2017-18 budget, which relied on another large increase in property-tax revenues. He should also immediately suspend the scheduled compensation increases for non-union managers and administrators until the board can determine how it will address the budget problem.

And the board, which spent countless hours talking about ways the district might add or expand programs, only to use up all its increased revenues on compensation, needs to assess its own failure to manage the budget in a fiscally responsible way.

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Editorial: Suddenly, a school budget crisis some feared

Tax growth falls short of Palo Alto school district's projections

by / Palo Alto Weekly

Uploaded: Fri, Jul 15, 2016, 7:45 am

The Palo Alto Unified School District's new fiscal year is just 15 days old, but the impossible has already happened.

Less than a month after approving a budget that relied on an almost 9 percent increase in property-tax revenue for the coming year, the district has learned that the Santa Clara County Assessor is projecting an increase of just over 5 percent.

The shortfall will be about $5.2 million, although the actual budget impact will be around $3.7 million due to the automatic elimination of a 1 percent bonus for employees in 2017.

The error stems from the district incorrectly interpreting interim county numbers that included about $1.2 billion in tax-exempt property-valuation increases for the new Stanford hospitals.

The revelation is a severe blow to the district and raises serious questions about the due diligence performed by Superintendent Max McGee and his staff and the board's fiscal oversight. County Assessor Larry Stone told the Weekly the growth numbers should not have come as a surprise to the district given the regular meetings his office has with all school-district financial officers and the cautions given about exemptions and other variables.

In a robust economy with growing property-tax revenues and a newly approved and increased parcel tax, the Palo Alto school district shouldn't have to budget revenues aggressively or draw on reserves. Reserves are for rainy days, not for use during peak periods of economic growth.

The board should never have approved three-year labor contracts in late May when accurate tax-revenue data would be available just a few weeks later. And it should not have granted "me too" retroactive salary increases to non-union managers and administrators.

In an email Wednesday morning to the board, top administrators and principals, McGee said he was "surprised and disappointed" to learn the news. He suggested that instead of making expense cuts to offset the revenue shortfall, the gap should be funded from reserve accounts, an action that would effectively sweep this major problem and embarrassment out of public view as if nothing happened.

With 85 percent of the district's expense budget going to compensation and benefits, and more than 71 percent of the revenues coming from property-tax revenue, these are the two drivers that require the utmost scrutiny, analysis and public debate.

Concern over the district's vulnerability to errors in the projection of property-tax revenue was raised by board member Ken Dauber when the union contracts were up for approval in May, but his four colleagues were all satisfied that the 2016-17 revenue projections were solid and voted in favor of the contracts, and a month later, for the budget.

The budget problem is a further blow to parents who have shown that class sizes in the middle and high schools have been consistently larger than the averages set by board policy. Dauber and these parents unsuccessfully argued that the hiring of the additional teachers to bring the class sizes down, especially in core academic classes, should be a top budget priority. With the latest budget problem, it now seems even more unlikely that there will be money available for this correction.

Except for Dauber, school board members were persuaded by McGee and Chief Budget Officer Cathy Mak that the district would have 18 months' advance warning of lower rates of property-tax growth, based on being able to see home-sale data trends in advance of the actual changes in tax payments, and therefore plenty of time to adjust budgeting. Neither McGee nor Mak mentioned the risk that property-assessment numbers could be impacted by tax exemptions.

School-district budgeting is never an exact science, but Palo Alto has made a big "miss" that is compounded by the generous (and first ever) three-year labor contract just approved.

McGee and his staff now need to present the board and public with a clear picture of the financial road map forward, including how he expects to balance the 2017-18 budget, which relied on another large increase in property-tax revenues. He should also immediately suspend the scheduled compensation increases for non-union managers and administrators until the board can determine how it will address the budget problem.

And the board, which spent countless hours talking about ways the district might add or expand programs, only to use up all its increased revenues on compensation, needs to assess its own failure to manage the budget in a fiscally responsible way.

Comments

common sense
Midtown
on Jul 15, 2016 at 6:52 am
common sense, Midtown
on Jul 15, 2016 at 6:52 am
67 people like this

4 of 5 members of the Board of Education are as incompetent. The Board needs to take responsibility for their mistake and roll back the salary increases for the administrative staff.

We the voters can do something about the board members this November - DO NOT VOTE FOR ANY OF THE INCUMBENTS! None of them are fiscally responsible as we have just witnessed, nor have they kept their promises to prioritize reducing class sizes.

It's on us the voters to hold the board accountable for this mess.


Anonymous
Another Palo Alto neighborhood
on Jul 15, 2016 at 7:01 am
Anonymous, Another Palo Alto neighborhood
on Jul 15, 2016 at 7:01 am
100 people like this

PAUSD could easy find $3.7 Million by firing some of its top heavy administration. Start with the group responsible for this error.


John
College Terrace
on Jul 15, 2016 at 8:09 am
John, College Terrace
on Jul 15, 2016 at 8:09 am
90 people like this

Palo Alto continues to push for taking major properties off of the property tax roles, in a push for low cost housing. Every time PAHC gets hold of property, the taxes that were previously paid, and any future taxes vanish. An example is the Buena Vista fiasco. If allowed to be developed as a market rate project, there would be a sizeable increase in the tax, with fewer city services required.

When will we wake up?


M. Blue
Green Acres
on Jul 15, 2016 at 8:18 am
M. Blue, Green Acres
on Jul 15, 2016 at 8:18 am
10 people like this

We could just put another Measure A on the ballot this year. The property owners (under age 65) in this town are loaded and the voters would overwhelmingly support it if the PAUSD releases some quotes that say that teachers will loose their jobs and classes will become more crowded.


Resident
Another Palo Alto neighborhood
on Jul 15, 2016 at 8:19 am
Resident, Another Palo Alto neighborhood
on Jul 15, 2016 at 8:19 am
27 people like this

Too much money is being spent at Church on frills. Too much money is being wasted on feel good items. Save $$$ at Churchill and leave the individual schools to make the fiscal priorities that benefit the students, not the money pit.


Apple
another community
on Jul 15, 2016 at 9:46 am
Apple, another community
on Jul 15, 2016 at 9:46 am
61 people like this

Superintendent Max McGee had originally pushed to rush the pay raises through. He asked the board to waive the two meeting rule that is usual for such a policy change.

Web Link

This is district's first ever multi-year union contract. And now we learn the projections upon which this contract is based are completely wrong two months after it was approved. The district is on the hook for its miscalculation for the next few years. And now there is a projected deficit that results right after the voters approved a tax increase.

I'm guessing most of the voters' political faith in the board and superintendent is now gone. The Fall election will be interesting as three school board positions are up for a vote.


Juan olive
Old Palo Alto
on Jul 15, 2016 at 11:11 am
Juan olive, Old Palo Alto
on Jul 15, 2016 at 11:11 am
75 people like this


These folks are like children that take and do what they want with others peoples money and know if they get caught, the will continue doing the same thing over and over and nothing will happen to them.
No responsibility
Like having your own bank (literally) and no one can tell you what to do with the money. Oh they can tell you, but they don't have to listen.

VOTE THEM OUT PEOPLE


Dean
another community
on Jul 15, 2016 at 12:14 pm
Dean, another community
on Jul 15, 2016 at 12:14 pm
20 people like this

The saying is: Stupidity is doing the same thing over and over expecting a different result! They did it again, proving there is no end to the stupidity!

Whenever the politicians push to get something passed, the voters should resist until the issue can be vetted and found to be acceptable to the majority. They rushed the salary issue, and guess what, it proved to be the wrong thing to do, and the taxpayers will have to pick up the difference, AGAIN!

It seems that for the present and for the past 50 or so years, the politicians have no sense of responsibility to the people who elected them. Regardless of their qualifications, they prove time and again their qualifications are worthless, yet people are like sheep and keep electing the same worthless politicians who are milking the public dry.

The solution is ALL incumbents get voted out of office until the elected officials are completely replaced, and then do not elect anyone who has held elected office before!

At the Federal level, there needs to be a correction to the retirement, and medical care. It needs to be revised to assure that the politicians retire with Social Security, and Medicare, and no special retirement plans and no special medical coverage. Both of these systems would get fixed post haste.

The Founding Father's set our Government up to have citizens running the country, not career politicians who have never really held a job other than what they were elected to.


Not Stupid Just Corrupt
Midtown
on Jul 15, 2016 at 1:01 pm
Not Stupid Just Corrupt, Midtown
on Jul 15, 2016 at 1:01 pm
35 people like this

People - just think about it. Do you really think that McGee and 4 of the 5 board members did not know what they were doing? Of course they knew what they were doing. The reason that they pushed through a multi year contract skipping a second meeting has to be because they knew - not because they did not. What they counted on was the inability of tax payers to do anything to stop this train wreck. So sad that unionism and politics trumped honesty. Ken is the only person that comes out of this mess with honor.


peppered
Registered user
Another Palo Alto neighborhood
on Jul 15, 2016 at 1:15 pm
peppered, Another Palo Alto neighborhood
Registered user
on Jul 15, 2016 at 1:15 pm
17 people like this

4 out of 5 school board members need to be censured in the most severe way legally possible.


Alphonso
Los Altos Hills
on Jul 15, 2016 at 1:38 pm
Alphonso, Los Altos Hills
on Jul 15, 2016 at 1:38 pm
12 people like this

Why is Dauber beyond blame on this? he was no better than any of the others in taking a more conservative approach. Dauber wanted to use all of the money also but he just wanted to use some of it for something else. I would also blame the County Tax people for some of this - they should be the real experts so they should have offered better advice.


Midtown Resident
Midtown
on Jul 15, 2016 at 1:47 pm
Midtown Resident, Midtown
on Jul 15, 2016 at 1:47 pm
18 people like this

@Alphonso - did you read the article? The County Assessor called in from vacation to explain that everybody knew how the system works, that they meeting all through the year to update local entities, and that "they aren't rookies" in Palo Alto - clearly calling this a rookie mistake.

In Mak's defense, it feels like McGee pushed her into the high forecast, which she had never ever done before. Any good managers would have haircut the forecast just to be safe - instead they pushed to the limit, and now we all get burned.


determinant
Crescent Park
on Jul 15, 2016 at 2:11 pm
determinant, Crescent Park
on Jul 15, 2016 at 2:11 pm
13 people like this

@MR,

Did you read it or know the history of Dauber's proposal?

Dauber's 3+3+3 proposal didn't save any money, it just changed how the money was spent. Dauber was relying on the extra funds as much as the rest of the board. Also, you should consider what would have been the first thing to go with Dauber's proposal.

The fault here lies with those preparing the budget. It's pretty damning for the county to turn around and say "this shouldn't be a surprise".


Typical
Greater Miranda
on Jul 15, 2016 at 4:33 pm
Typical, Greater Miranda
on Jul 15, 2016 at 4:33 pm
26 people like this

As per usual, the Weekly acts as a biased, pro-Dauber megaphone with no evidence to support its claims. This editorial does not include a single quote from Dauber that would lead a reasonable person to believe that Dauber correctly forecasted the problem in advance and tried to stop it (more to the point, it has no quotes from Dauber at all).

The article accompanying this editorial has quotes from Dauber AFTER the news of the budget shortfall broke, but no evidence that he saw it coming beforehand. The reason why is that there simply isn't any. All PAUSD board meetings are online, and if there was something to quote, the Weekly would have done it in support of their endless mission to prop up Dauber.

It is true that Dauber disagreed with the other 4 board members in May about budget allocations. It is entirely untrue that he asked for a smaller budget because he believed that there could be errors in tax projections. Alphonso and determinant are correct: he simply wanted more spending on smaller class sizes instead of more spending on teacher salaries.

[Portion removed.]


Marc Vincenti
Registered user
Gunn High School
on Jul 15, 2016 at 5:29 pm
Marc Vincenti, Gunn High School
Registered user
on Jul 15, 2016 at 5:29 pm
12 people like this

Friday afternoon, July 15

Hi,

Thanks to the "Weekly" for this restrained, powerful, and timely editorial.

With regard to the sudden hole in our District wallet:

Only last fall, our superintendent and his enrollment management committee-- in urging a new school at Cubberley--pointed to ready sources of financial help.

From their Sept. 28 report:

"Funding availability: Major, local new funders are ready to fund bold and innovative secondary school initiatives. These are net-new sources of capital that the district has not tapped in the past, and are non-competitive with existing funding sources for the district."

Perhaps "bold and innovative" could be expanded to include "everyday and indispensable," and these funders--whose pockets are deep and hearts are eager--could be persuaded (by all of us and especially by Mr. McGee, a vigorous advocate and salesperson) to help defend the quality of local education.

It's hard to imagine that much could have changed since last fall, or that people's dedication to our school-kids would vanish overnight.

This is all especially urgent, right now, as our class-sizes (425 high-school classes last semester with 30 or more teenagers per room) reach proportions where campus "connectedness"--recommended by the enrollment management committee and now endorsed by the CDC--recedes before us like a mirage.

Need we be beggars on the front steps, when so many community members, so well-off and civic-minded, are entering and leaving the temple?

We can do better.

Sincerely,

Marc Vincenti
Gunn English Dept. (1995-2010)
Campaign Coordinator, Save the 2,008


Idiocracy
College Terrace
on Jul 15, 2016 at 10:49 pm
Idiocracy, College Terrace
on Jul 15, 2016 at 10:49 pm
34 people like this

Dauber's point was that lavishing a 13% raise on teachers, and counting on high property tax revenue increases for years to come to hire needed teachers, was unnecessary and dumb. It put the district at risk of being wrong about its projections with no way to recover. That's exactly what happened. Of course he didn't know that Max and Mak had already screwed up the revenue calculation.

Had Dauber's plan been adopted the district would have a compensation bill $4.5 million less, and no deficit. Instead, the other board members and senior staff plugged their ears, and voted to spend every dollar of last year's surplus in raises. Sad.


Typical
Greater Miranda
on Jul 16, 2016 at 12:14 am
Typical, Greater Miranda
on Jul 16, 2016 at 12:14 am
4 people like this

@Idiocracy:

You are correct that Dauber's plan would have avoided spending more money on teacher salaries. What you are missing is that his plan was to divert this money into funding for smaller class sizes. Therefore, your claim "Had Dauber's plan been adopted the district would have a compensation bill $4.5 million less, and no deficit." is factually untrue. The bottom line would have been exactly the same and we would be in the same situation in which we now find ourselves; the money would simply have been spent differently.

[Portion removed.]


Idiocracy
College Terrace
on Jul 16, 2016 at 12:48 am
Idiocracy, College Terrace
on Jul 16, 2016 at 12:48 am
21 people like this

Nope, the point of Dauber's plan was to reserve tax revenues for other purposes, and not to sink it into raises where it can't be used for anything else. There is no way that 35 new teachers could have been hired so fast, but even if they had been, the district would have had a hole plus 35 teachers rather then just a hole. The hole could have been filled by attrition, laying off the new teachers, etc. At worst we would have the current number of teachers and no deficit. Now we have the same teachers and a big hole -- unless the teachers can be persuaded to cut their own pay.
Dumb.


Typical
Greater Miranda
on Jul 16, 2016 at 1:02 am
Typical, Greater Miranda
on Jul 16, 2016 at 1:02 am
1 person likes this

@Idiocracy

If I understand you correctly, your argument is "Dauber's plan would have been better because then we could have just fired 35 new teachers moments after hiring them, rather than dipping into district reserves." Sounds like a great way of running a school district, even ignoring the fact that the magnitude of the new salaries and the expected tax loss aren't the same so your argument about not being in the hole doesn't even make sense. Plus, you're only saying why you think the outcome of Dauber's plan would have been less bad ("only" firing 35 teachers), not negating the point I made originally, which is that there is no evidence Dauber predicted this problem ahead of time, as the editorial wishes to imply.


M. Blue
Green Acres
on Jul 16, 2016 at 8:30 am
M. Blue, Green Acres
on Jul 16, 2016 at 8:30 am
29 people like this

@Typial

You are wrong.
Watch the May meeting to see what really happened:
Web Link

The vote in May was whether or not to accept or reject the 3-year contract that had already been negotiated by the PAUSD negotiator and the Teachers Union. Dauber wanted to reject the contract as negotiated in favor of lower raises. In his verbal arguments, he clearly states that the raises would consume all of the "rosy tax projections". He proposes a lower raise because the taxes may come in lower that the projections, AND because the difference could be used to reduce class sizes if the rosy tax projections actually did materialize.

If the Board had voted that night to amend the contract to reduce the raises - then the Teachers union and PAUSD negotiator would return to discussions to negotiate and attempt to agree on a new package. It is not unilateral. The teachers union would had had to agree.

Then, assuming the negotiations were successful, the new 3-year contract would come before the board after their summer break (sometime after September) and be voted on.

So, to be clear, we would not have a contract at all right now if Daubers change was accepted by the PAUSD in May.

Further, the PAUSD would not impliment class size reductions in a teachers employment contract. Reducing class sizes would be implemented by the school management and PAUSD separate from the teachers empoloyment contract.


Idiocracy
College Terrace
on Jul 16, 2016 at 10:04 am
Idiocracy, College Terrace
on Jul 16, 2016 at 10:04 am
15 people like this

Dauber didn't predict that Cathy Mak would screw up the property tax projections by failing to pay attention during briefings at the assessor office. He did predict that spending all of the available money on raises, based on projections that even more money would come in stupendous property tax increases, was risky and unnecessary business that didn't protect students. He was right. The other board members who praised Mak for her "conservative" budgets were wrong. They didn't exercise the judgment they should have as trustees. They will probably pay a price in the election, as it should be.
I expect that's what this frantic attempt to rewrite history is about.
[Portion removed.]


M. Blue
Green Acres
on Jul 16, 2016 at 10:23 am
M. Blue, Green Acres
on Jul 16, 2016 at 10:23 am
11 people like this

BTW, Daubers other concern at the May meeting addressed the issue of managements raises being the same as the teachers compensation. The concern was that managements raises could/should be addressed independently of the teachers contracted raises. There was an amendment proposed to change the contract so that management raises would be automatic for only two of the three contract years and that the Board use the intervening time to study options for addressing future managements raises in year three and beyond. The possibility existed to reduce or eliminate the management raise in year three and move to a performance and budget based system more like what we see in the private sector. That amendment was defeated.


M. Blue
Green Acres
on Jul 16, 2016 at 10:26 am
M. Blue, Green Acres
on Jul 16, 2016 at 10:26 am
3 people like this

Correction "Daubers other concern at the May meeting addressed the issue of managements raises being the same as the teachers compensation."

should say: Daubers other concern at the May meeting addressed the issue of managements percentage pay raises being automatic and the same as the teachers percentage pay raise.


Mr. Pink
Barron Park
on Jul 16, 2016 at 11:22 am
Mr. Pink, Barron Park
on Jul 16, 2016 at 11:22 am
1 person likes this

Blue, you've got a bit of revisionist history there.

Your link is to the board meeting rather than Dauber's actual proposal, which says nothing about only hiring teachers "eventually" and says all about hiring them now to reduce the class size.

However, even in your link, Dauber states quite clearly that he wants to give the teachers "a healthy 9%" pay increase. Guess what? We can't even afford the 9% that Dauber wanted to give them. So so much for his soothsaying expertise.

Going further, he also comments: "we can spend the rest of this surplus on hiring more teachers". So, not only did it turn out we can't afford his basic 9% proposal, there is no way we could have hired more teachers to reduce class sizes.

Thank God, the board out-voted him and instead went with the proposal that had a safety valve should just such a reduction on property taxes revenues eventuate. Imagine where we'd be stuck with even more teachers!

Your attitude of "oh, we just fire the teachers", shows an extreme libertarian bent.


M. Blue
Green Acres
on Jul 16, 2016 at 11:48 am
M. Blue, Green Acres
on Jul 16, 2016 at 11:48 am
11 people like this

Mr. Pink : "oh, we just fire the teachers",

Don't blame that quote on me. You won't find those words in my posts.

Also you should just watch the video. Your mixing up a bunch of preconceptions and attributions (like you attributed the quote above incorrectly to me). Just watch the video and let Dauber words and those of the board speak for themselves. That's why I provided the link to the meeting video.


Alphonse had it right
Midtown
on Jul 16, 2016 at 12:29 pm
Alphonse had it right, Midtown
on Jul 16, 2016 at 12:29 pm
2 people like this

I watched the video. Dauber goes on and on about what we can spend the largesse on besides salary increases. No mention of how he'd reduce his 6% over-expenditure commitment on salaries or fire the teachers he hired and now could no longer afford.

Alphonso had it right: "Dauber wanted to use all of the money also but he just wanted to use some of it for something else."


M. Blue
Green Acres
on Jul 16, 2016 at 1:34 pm
M. Blue, Green Acres
on Jul 16, 2016 at 1:34 pm
13 people like this

Not sure what you are not getting here.

- The contract (commitment) being voted was the 3-year teachers compensation package.
- Class size reductions were NOT part of that contract, and were not a commitment. they would be discretionary. There are separate programs and funding for class size reduction and these are managed by the school board and school management.
- Dauber wanted to reduce the teachers compensation contract (the commitment) so they would have some discretionary funding for class size reductions.

Please stop putting words in other peoples mouths, or are you guys are just being obtuse?


sigh
Charleston Meadows
on Jul 16, 2016 at 2:35 pm
sigh, Charleston Meadows
on Jul 16, 2016 at 2:35 pm
2 people like this

Not sure what you're not getting, Mr. Blue.

Dauber's proposal would have overspent significantly against the now known budget. For this editorial to somehow position him as "the only one on the board who was not proposing overspend" is disingenuous at best.

Try to spin it any way you wish. The current contract, which had provisions to reduce raises and and opt out of future agreements has already proven that it works and shows you what was the best model.

Now, how we got into this mess is another story but Dauber is as much to blame for it as the rest of the board for getting there.

How much clearer do you need it?


Resident
Adobe-Meadow
on Jul 16, 2016 at 4:23 pm
Resident, Adobe-Meadow
on Jul 16, 2016 at 4:23 pm
12 people like this

The idea is that the union contract is a contract - can't be undone.

The class size reduction spending could have been dropped after this miscalculation came to light.


John
College Terrace
on Jul 16, 2016 at 4:57 pm
John, College Terrace
on Jul 16, 2016 at 4:57 pm
2 people like this

This entire fiasco is a reflection of all of us in Palo Alto. We seem to want it all, then we blame our various board members when it goes south. We voted for the board members, often enthusiastically, and they ARE us! At the next election, despite all the threats, we will continue to vote us back in, continuing to promise us what we demand, even if it is irresponsible to do so.

Isn't it time to stop blaming others?


new contract
Green Acres
on Jul 16, 2016 at 5:32 pm
new contract, Green Acres
on Jul 16, 2016 at 5:32 pm
1 person likes this

@Resident,

"The idea is that the union contract is a contract - can't be undone."

That's where you're wrong. The contract has built-in safety valves for when the property tax comes in under expectations. Read the other thread - the additional 1% has already been eliminated [portion removed due to inaccuracy.]

"The class size reduction spending could have been dropped after this miscalculation came to light."

A bit hard after you've hired all the new teachers! There isn't a built-in safety valve - or are you in the "just fire them" camp?


Come on, guys. This really isn't that hard.


Idiocracy
College Terrace
on Jul 16, 2016 at 5:57 pm
Idiocracy, College Terrace
on Jul 16, 2016 at 5:57 pm
20 people like this

The CYA is in full swing. The board locked in a 9% pay raise that has no safety valve. Dauber wanted 6%. That difference is $4.5 million a year, now and in the future. He was right, Caswell, Emberling and the rest were wrong. The voters are smarter than you think.


Time for a Change
Duveneck/St. Francis
on Jul 16, 2016 at 6:25 pm
Time for a Change, Duveneck/St. Francis
on Jul 16, 2016 at 6:25 pm
18 people like this

Talking about the "safety valves" like "the Board planned for this" misses the point. The safety valves were for if the economy turned bad. Instead, we've now plunged right through the safety valve and are spending the reserves - while the economy is doing fine! NOW if the economy turns down, we are well and truly screwed.

We have a good district, good teachers, good students - we do not have strong administrators, and we have an amateur board. As they say in sports, after you've played a full season, "you are your record" - you can't say you're better than that.

Townsend = 13 years. Caswell = 9 years. Emberling = 4 years. 26 years of combined Board tenure. That's the team that brought us year after year of self-inflicted cock-up after cock-up. One is leaving, two are up for re-election. Time for a change.


new contract
Green Acres
on Jul 16, 2016 at 6:33 pm
new contract, Green Acres
on Jul 16, 2016 at 6:33 pm
1 person likes this

Not sure why I got this: [portion removed due to inaccuracy.]

Editor, here's the link to the board's response: Web Link

And quotes from there regarding the teachers contracts:

"The recently approved multi-year employee contracts provide a 4% increase on the salary schedule and a 1% off the salary schedule increase for 2016-17. The off schedule increase is contingent on property tax growth. The provision states that if property tax revenue is less than the amount budgeted in the Adopted Budget by 1.5% or more, the 1% off the salary schedule increase is eliminated."

"The multi-year employee contracts contain a provision for the district to opt out of the 3% salary increase for 2017-18 if property tax revenue for 2016-17 is less than 1.5% of the amount in the Adopted Budget."

If you believe you have better information than the district, feel free to update with the that more accurate information.


Watchdog
another community
on Jul 16, 2016 at 6:40 pm
Watchdog, another community
on Jul 16, 2016 at 6:40 pm
7 people like this

When the Weekly does not like what you post they just [portion removed due to inaccuracy.]

So much for being "truthful".


Idiocracy
College Terrace
on Jul 16, 2016 at 6:47 pm
Idiocracy, College Terrace
on Jul 16, 2016 at 6:47 pm
15 people like this

That's not the board's response, it's Cathy Mak's. The 9% salary increase for last year and this is permanent, irrevocable and has no safety valve. The 1% one time bonus will be cancelled. Next year's 3% increase can be reopened for negotiation, but the contract has no automatic "opt out" provision that will result in a 0% increase without another negotiation.
$4.5 million of the ongoing hole caused by this fiasco is a result of the board insisting on a 9% raise rather than the 6% proposed by Dauber.
Really this attempt to sell a different version of reality is sad -- but also amusing, frankly.


Opt-Out? Yeah, Right
Downtown North
on Jul 16, 2016 at 6:51 pm
Opt-Out? Yeah, Right, Downtown North
on Jul 16, 2016 at 6:51 pm
15 people like this

The "opt out" thing makes me laugh. The union's lawyers are going to say that the forecast was a lie, and that the district bargained in bad faith. If they don't get their 3% in year 3 (plus maybe the bonuses?), they'll go to arbitration and have a good chance of winning. It will be fun to see the district argue, "we're not liars, just dummies!"

The high-handedness of the District (Max?) to say they can simply "out-out" (sorry teachers!) shows how hard they are spinning.


Town Square Moderator
Registered user
Another Palo Alto neighborhood
on Jul 16, 2016 at 9:10 pm
Town Square Moderator, Another Palo Alto neighborhood
Registered user
on Jul 16, 2016 at 9:10 pm
23 people like this

@new contract:

Yes, the memo you reference, written by PAUSD Chief Budget Officer Cathy Mak, incorrectly cited the terms of the contract.

The union contract provides that either side has the option to reopen negotiations on the three percent increase to the 2017-18 salary schedule once the February, 2017 Assessor's report on 2016-17 property tax receipts has been released. A request to reopen negotiations must be made by March 15, 2017. There is no opportunity to simply "opt-out" of the increase.

Here is the language from the adopted contract:

"In the event that the actual property tax received for 2016-17 (as determined by the County Assessor report of February 2017) is more or less than one and one half percent (1.5%) of the amount of the property tax used in the Board Adopted Budget for 2016-2017 each party has the option to reopen negotiations on the three percent (3%) increase to the Teachers’ Salary Schedule for 2017-18 by March 15, 2017."


Peter Carpenter
Registered user
Atherton
on Jul 16, 2016 at 9:17 pm
Peter Carpenter, Atherton
Registered user
on Jul 16, 2016 at 9:17 pm
10 people like this

"Yes, the memo you reference, written by PAUSD Chief Budget Officer Cathy Mak, incorrectly cited the terms of the contract."

How much more constructive to correct incorrect information rather than to just delete it - thank you.


Getting Stranger
Crescent Park
on Jul 16, 2016 at 9:52 pm
Getting Stranger, Crescent Park
on Jul 16, 2016 at 9:52 pm
53 people like this

Wow, the Moderator is calling BS on the District's memo. This is bad.

Another strange thing - anyone who has worked with Cathy Mak knows that she is a very solid, conservative finance person. She doesn't lie, doesn't make things up, doesn't like taking chances. And she's definitely not sloppy. So how and why did she create an "all-in" forecast (vs. all prior forecasts which were a heavily sandbagged 2% growth)?

And as for that memo, she would never misleadingly paraphrase a contract term like that. That sounds much more like Max and the communications officer saying, "Oh, the public will never understand what 'reopen' means, so let's just tell Cathy to change it to 'opt out.' Besides, it sounds so much better!"

All of which makes me wonder - what else is getting spun here? Next step - look at the proposed "fill the hole" plan. Paying for $1 million of IT expense with bond funds? What's that?


not so fast
Greendell/Walnut Grove
on Jul 17, 2016 at 5:46 am
not so fast, Greendell/Walnut Grove
on Jul 17, 2016 at 5:46 am
4 people like this

@getting stranger,

The district had access to the actual contract when it wrote its memo.
The moderator provided no backup link to the Weekly's interpretation of the contact when it claimed the district got it wrong. Does the Weekly have access to the actual contract and can they provide a link to backup their position or are they relying on google?

Before taking statements as dogma, you need to question who has access to the more accurate information.


Getting Stranger
Crescent Park
on Jul 17, 2016 at 7:48 am
Getting Stranger, Crescent Park
on Jul 17, 2016 at 7:48 am
11 people like this

@no so fast - We all should have access to the contract - it is a public document. Weekly can you get and post? The district's website summarized their "historic agreement" upon announcement this way: Web Link

"The agreement specifies the safety valve conditions under which either PAEA/CSEA or the Board may reopen negotiations on 3% salary increase for the 2017-18 school year and the one-time off-the-salary-schedule payments."

Back then (2 months ago) it was "reopen negotiations," not "opt-out."

Here from the Weekly's site is a mark-up for the near final new contract (dated 4/28), which has the same language (section 4(e)): Web Link

"In the event that the actual property tax growth received for 2017-18
(as determined by the County Assessor report of February 2017) is more
or less than one and one half percent (1.5%) of the amount of the property tax
growth used in the Board Adopted Budget for 2016-2017, each party has the option
to reopen negotiations on the three percent (3%) increase to the Teachers’ Salary Schedule for 2017-18 by March 15, 2017."

The District has an option to reopen negotiations. The say they can "opt out" is wrong and misleading.


Town Square Moderator
Registered user
Another Palo Alto neighborhood
on Jul 17, 2016 at 8:04 am
Town Square Moderator, Another Palo Alto neighborhood
Registered user
on Jul 17, 2016 at 8:04 am
4 people like this

The final agreement provided to the Weekly by Assistant Superintendent for Human Resources Scott Bowers is the one currently posted on our website at Web Link. He provided the redlined version as shown.


M. Blue
Green Acres
on Jul 17, 2016 at 9:45 am
M. Blue, Green Acres
on Jul 17, 2016 at 9:45 am
9 people like this

@sigh "Try to spin it any way you wish. The current contract, which had provisions to reduce raises and and opt out of future agreements has already proven that it works and shows you what was the best model."

Apparently not.


Angry Measure A supporter
Duveneck/St. Francis
on Jul 17, 2016 at 10:14 am
Angry Measure A supporter, Duveneck/St. Francis
on Jul 17, 2016 at 10:14 am
22 people like this

Here is a video of Dauber discussing the unrealistic budget projections

Web Link

In it he says he is "not as sanguine" as his colleagues about these rosy forcasts, and notes that if the projected revenues do not materialize the district will have to raise class sizes, because it will have no other choice. Cathy Mak agrees with him. He says that the district should use some of the surplus revenues from 2015-16 to hire some teachers now rather than push that off into the future, give that the future is based entirely on pie-in-the-sky high budget projections.

He's completely clear in what he is saying. He says the projections are unrealistic, if the money doesn't come in as Mak projected then the only option the district will have is to increase class sizes, and that committing the district to raises of this size without attending to the need to get class sizes in the high schools down would cripple the district's ability to do that in the future.

Basically these raises were a credit card shopping spree by the board majority. It was irresponsible. It was imprudent (all things that Dauber said at the time). These board members who all like to talk about how they are "finance professionals" and "business leaders" are so full of it. They are a bunch of people with no business -- and I mean NO BUSINESS - running a $200million organization.

Max McGee is not a good superintendent. If anyone doubted that before, do you doubt it now? The board exercises weak to no oversight and now the district is underwater which you should find surprising since we just had the largest property tax growth in history coupled with a parcel tax increase.

McGee is a terrible manager. He refuses to manage Scott Bowers, who is a horrible labor negotiator with a personal conflict of interest. McGee for some reason that makes no sense decided to have a three year agreement, and Bowers decided to go for broke. Mak was under pressure from McGee to figure out how to make a budget work [portion removed.]

The board had every opportunity to say no to this and choose a more modest raise as Dauber proposed. Had the board done the 3-3-3 plan, it would still have to plug a hole but nowhere near as big a hole. That's because of a fact that literally no one other than Ken seems to understand to this day. Compensation increases are compounding. This is not a one time problem. This is a problem every single year. The 5% that we couldn't afford this year is baked into next year and the year after.

There is no money to pay for this. Pulling a few million from reserves won't fix it. They will have to use attrition. As teachers leave, they won't be replaced, and this savings will plug the hole. But students will have even larger classes than they already do.

Shame on the board. McGee should be let go as should Mak and Bowers. Clean house and get it together.

Vote for anyone but Heidi and Melissa in November. Send a message.


facepalm
Barron Park
on Jul 17, 2016 at 10:53 am
facepalm, Barron Park
on Jul 17, 2016 at 10:53 am
14 people like this

@Blue,

You do understand what "reopen negotiations," means?


Wow
Midtown
on Jul 17, 2016 at 7:17 pm
Wow, Midtown
on Jul 17, 2016 at 7:17 pm
3 people like this

Dauber's plan was asinine assuming any of you supporters of his read it. As for those of you assuming that the people working at Churchill are superfluous you are greatly mistaken. Those should are for the most part overworked and then have the luxury of commuting out of Palo Alto as there isn't affordable housing for them.

They did not risk the budge, at the last minute Dauber decided to push his agenda and try to make himself look like a great board member because he cares about our kids. What a crock.

Palo Alto teachers and staff for the most part are underpaid the just like the whole of California and are underfunded of you want to believe it or not.

Of course, this article has us all up in arms, and we're forgetting that this is an editorial, so that's it's job. Misrepresenting facts and numbers to drive readers.


Idiocracy
Community Center
on Jul 17, 2016 at 7:47 pm
Idiocracy, Community Center
on Jul 17, 2016 at 7:47 pm
9 people like this

Wow, thank you for your well reasoned argument. There is definitely room for this kind of thinking in the business office at PAUSD. Dauber's plan to free up money for more teachers was clearly a stake in the heart of our students.


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