News

School board to discuss budget revisions

District eyes property tax revenue, new-school fund to pay unbudgeted raises

The Palo Alto school board will discuss on Tuesday budget revisions to address up to $6 million in unbudgeted pay increases this year — the result of what the superintendent is now calling a "mistake" of not formally reopening negotiations with the district's employee unions.

District leadership realized in August that they had failed to meet a contractual deadline to reopen negotiations this spring, and have since agreed to pay 3 percent raises to unionized teachers and classified staff that the school board had intended to cancel — the equivalent of $4.4 million. This comes on the heels of an ongoing budget shortfall the district has been grappling with since last summer, when staff members realized they had misestimated property tax revenue to the tune of $3.7 million.

Under the three-year union contracts, if property tax revenue comes in at more or less than 1.5 percent than the amount the district budgeted for in 2016-17 — as it did, at 5.34 percent compared to the district's projection of 8.67 percent — "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 will use additional property tax revenue to pay the raise.

It's also "very likely," Chief Budget Officer Cathy Mak wrote in a staff report, that a 1 percent bonus promised in the contract (the equivalent of $1.5 million) will double based on property tax projections. Under the contract, if the actual property tax received for the 2017-18 school year is greater than budgeted for by 1.5 percent or more, a 1 percent automatic bonus will be increased to 2 percent.

Early estimates from the county provided to the district indicate property tax growth will be coming in well above that 1.5 percent threshold — 6.52 percent compared to 3.73 percent in the district budget. 

Staff is proposing the district use a $6.1 million fund set aside for opening new schools to pay the bonus.

Staff will present four new budget scenarios on Tuesday night, two of which include a 1 percent raise for all employee groups for the next five years. (Salary increases are subject to negotiation and these amounts are for "projection purposes only," the staff report notes.) Those two scenarios result in budget shortfalls for the next three years.

The first scenario, for example, projects property tax growth at 4 percent in the 2018-19 school year and 3 percent in the next four years, with 1 percent raises from 2018-19 through 2022-23. This would result in estimated shortfalls of $2.9 million in 2018-19, $3.1 million in 2019-20 and $900,000 in 2010-21, according to the district.

Only one scenario includes no shortfalls in the out years — with higher property tax rates of 5 percent, then 4 percent and 3 percent for the next three years and no raises.

The scenarios also include different property tax projections, from the more conservative (3 percent) to 5 percent.

This year's proposed budget has a deficit of $2.4 million, which comes from $750,000 for new teachers, $175,00 for a Title IX coordinator and the employee bonus. The deficit persists for the next two years, according to the district.

In a weekly message on Friday, Superintendent Max McGee acknowledged the district made a "mistake" with the contract, but attributed it to "widespread misunderstanding among all parties that the 3% increase was off the table due to the 2016-17 budget shortfall."

The district does not intend to cut programs or services that "directly impact teaching and learning," and he will instead recommend the district not fill several open personnel positions for savings.

In closed session on Tuesday, the board will discuss an evaluation of McGee at the request of Trustee Todd Collins, made in response to the contract issue.

In other business, the board will take action on a set of policies related to compliance with federal anti-discrimination law Title IX; vote on the 2017-18 district-wide goals; discuss a report on enrollment and class size; and discuss authorizing a request for proposals (RFP) for a master planning process for Cubberley Community Center

The board is also set to rectify violations of public-meeting law the Brown Act by approving in open session the contracts for two new district hires and McGee's compensation from the last two years.

The meeting will begin at 6:30 p.m. at the district office, 25 Churchill Ave. View the agenda here.

The board will also meet on Wednesday, Sept. 13, from 6-8 p.m. for a workshop on governance and protocols.

---

Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

What is democracy worth to you?
Support local journalism.

Comments

19 people like this
Posted by Please
a resident of another community
on Sep 11, 2017 at 12:33 pm

The pay increase was not "unplanned." It was scheduled to happen at the same every year for three years. They just decided to ignore the negotiation deadline.


17 people like this
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Sep 11, 2017 at 1:10 pm

@Please,

The expenditures were "unplanned" from the perspective of the budget, which is mainly what the board is dealing with at the present.

I don't think we should be minimizing this mistake or its impact in any way.


20 people like this
Posted by Elena Kadvany
education reporter of the Palo Alto Weekly
on Sep 11, 2017 at 1:48 pm

Elena Kadvany is a registered user.

To Please: Thank you for your comment. The "unplanned" referred to the budget, not the contract, but I appreciate your point and have changed the word to "unbudgeted" to be more clear.


15 people like this
Posted by Parent
a resident of Crescent Park
on Sep 11, 2017 at 2:16 pm

"They just decided to ignore the negotiation deadline"

If only! "They" (McGee and Co.) didn't "decide" anything. By their own account, they just screwed it up and failed to do what they intended to do and in fact told the board and community they had done. Whether they "forget," "misunderstood," or just messed up, they certainly didn't "decide."


7 people like this
Posted by sniffing your bias
a resident of Barron Park
on Sep 11, 2017 at 3:14 pm

How come the author of this and the other hit piece more than a week ago did not point out and purposely left out of the minute by minute timetable ticker at the bottom of the story the fact that the union told the District in January that their numbers did not include adequate resources for the raise? The district was told. [Portion removed.]


30 people like this
Posted by for Healthier High Schools
a resident of Gunn High School
on Sep 11, 2017 at 3:18 pm

It is so sad to me that, less than a month from our latest self-inflicted death of a high-schooler--our twelfth such loss in eight years--the board and superintendent are positioned with no sense of urgency to undo the oppressive stress produced by the operation of our high schools, but instead are focused on issues of less consequence and poignancy, just as they were all last year.

School names do not carry the impact of daily cheating by a majority of students; weighted or unweighted APs to not have the effect of unhealthy sleep-loss due to work done at home; and moving around the pieces of the District budget has almost no bearing on what goes on every day in our classrooms where kids have social media on their minds all day, are stressed out by course grades given every three weeks (not every nine weeks, as before 2014), and are deprived due to overcrowding from forming healthy working relationships with their devoted but overworked teachers.

For a sensible, systemic, community push to reduce the discouragement and anxiety at Gunn and Paly please see the 581-member community alliance at: savethe2008.com. We are focused on the District's longest-term problem and the one that is of the most consequence for young life and limb.

Sincerely,
Marc Vincenti
Gunn English Dept. (1995-2010)
Chairman, Save the 2,008--for Healthier High Schools


2 people like this
Posted by how about this
a resident of Barron Park
on Sep 11, 2017 at 5:01 pm

given our current budget crisis let's spend $200k and thousands of hours of time to rename our schools. Seems like a great use of resources to me


8 people like this
Posted by Pravda
a resident of Adobe-Meadow
on Sep 11, 2017 at 5:06 pm

Palo Alto online should be renamed Pravda for their pension to senso comments . lol!!


8 people like this
Posted by Pray for us
a resident of Jordan Middle School
on Sep 11, 2017 at 9:19 pm

Robbing St. peter to pay St. paul


34 people like this
Posted by Rick
a resident of Crescent Park
on Sep 11, 2017 at 9:59 pm

Wow, a $6M completely avoidable budgeting screwup at the highest levels, proceeded by a different $4M budgeting screwup, is now just a 'budget revision', at worst, a 'mistake'? So long as raises are handed out like clockwork, it seems that there is little interest in a balanced budget at Churchill Ave.

Excellent reporting by by Elena Kadvany!


Like this comment
Posted by Genuine
a resident of Gunn High School
on Sep 12, 2017 at 11:24 am

[Post removed.]


10 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Sep 12, 2017 at 11:30 am

Anyone consider a pay freeze? I would be willing to bet that most in the community would be in favor.


6 people like this
Posted by Novelera
a resident of Midtown
on Sep 12, 2017 at 12:07 pm

Novelera is a registered user.

I realize there was a lot of mismanagement on the part of the School District; but, if the end result, was a raise for teachers, is this really such a bad thing?


27 people like this
Posted by Resident
a resident of Charleston Gardens
on Sep 12, 2017 at 12:35 pm

A raise for teachers is better than losing it at the track, but definitely not what the board wanted. Due to last year's snafu, they gave a 4% raise and put the budget into large deficit. To make up for it, they promised 0% raise for this year. Instead it is 3%. So between last year and this year, the raises are 7%, plus 2% bonus, vs. more like 3-4% that the board wanted. That means fewer teachers, fewer support staff, larger classes, and more program cuts.


11 people like this
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Sep 12, 2017 at 12:46 pm

@Resident,

A raise has the disadvantage that it sets a new baseline for salaries. Unless salaries would actually be lowered, you end up paying the raise every year into the future. Further, by setting a new baseline, computations of raises based on percentages would be higher in the future.

The "bonus" has the advantage of being a one-time event with no raising of the baseline, although perhaps raising some psychological expectations.

Please understand that I am not arguing what teachers "ought" to be earning, it is simply a question of how this affects district financing.


22 people like this
Posted by Ugh!
a resident of Palo Verde
on Sep 12, 2017 at 3:28 pm

The additional damage that this mistake has done is to further undermine community confidence in PAUSD fiscal management. As a result, many in the community are feeling reluctant to donate money to PiE, PTA, schools in general, with the feeling this is "throwing good money after bad".

The Superintendent's attitude that this is no big deal, the raise should have happened anyway reflects an infuriating disregard for fiscal prudence. Also, there seems to regularly be the belief that the parents will just reach into their wallets and fix any problem, so why should PAUSD even bother being careful with money.

When the PiE donations go down, this will be a double-whammy to our students and schools.

Write to the board: Board@pausd.org


6 people like this
Posted by Special Education Budget
a resident of Crescent Park
on Sep 12, 2017 at 4:27 pm

The Board Agenda Packet shows increase in budget for a Special Education Coordinator. Given this person directly interacts with families and makes decisions about students, that is likely a good move. There has been so much turnover in that department.
The problem is Special Education has too large a budget on management. There are 2 Director's of Special Education and an Assistant Superintendent to oversee them.
The Spring, 2017 reorganization should have created lees work for 2 Special Education Directors. New jobs were created to take over part of the Special Education Director's functions - such as Title IX Coordinator.
There were increased budgets such as legal firm services to conduct the legal part of their function.
Is it working?
There is too much management and not enough workers.


3 people like this
Posted by Observer
a resident of Old Palo Alto
on Sep 12, 2017 at 7:56 pm

The district has $100 million in reserves. They can afford to give teachers a raise, and funding of programs to address the needs of students. I would suggest the community take a closer look at who is running things at 25 Churchill. Lots of incompetence all around. Instead of carping about the unions and teachers who actually do the work - look at the individuals in the District Office who are voting against the interests of kids and teachers.

Interesting article about school districts sitting on lots of cash in reserves by the San Diego Tribune.

Web Link


2 people like this
Posted by Jim H.
a resident of Duveneck/St. Francis
on Sep 12, 2017 at 8:02 pm

@Observer - Where do you see the $100M in reserves? I agree with you that the district has plenty of money to work with and also that there's plenty of incompetence.


Like this comment
Posted by Observer
a resident of Old Palo Alto
on Sep 12, 2017 at 8:22 pm

@Jim H.

The $100 million is in the surplus fund. Follow the money ...


16 people like this
Posted by Randy
a resident of College Terrace
on Sep 12, 2017 at 9:18 pm

Unless I am mistaken, Cathy Mak has overseen or ignored critical decisions that have cost PAUSD approximately $10M in the last year or so. And this makes her qualified to continue as the Chief Budget Officer in what way?


10 people like this
Posted by Lori
a resident of Gunn High School
on Sep 12, 2017 at 10:07 pm

Why extra funds through PiE when the district seems to have so much $$ socked away ?


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

Stay informed

Get daily headlines sent straight to your inbox.

Disposing of Disposables
By Sherry Listgarten | 21 comments | 2,223 views

Couples Counseling, Al Pacino Style
By Chandrama Anderson | 0 comments | 1,684 views

Facing high kitchen turnover, Los Altos' The Post revamps majority of its menu
By Elena Kadvany | 1 comment | 1,434 views

Anonymous Sources: Facebook and YouTube suppressing important questions and discussion
By Douglas Moran | 3 comments | 527 views

NICU Love
By Cheryl Bac | 0 comments | 246 views