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Mt. Diablo superintendent lays out budget woes

By Theresa Harrington
Monday, February 28th, 2011 at 8:41 pm in Education, Mt. Diablo school district.

Mt. Diablo schools Superintendent Steven Lawrence sent out the following memo to parents today:

“Governor’s Budget Proposal and Impact on MDUSD

The information for this News Update was gathered from:

1. A budget presentation made by State Senator Mark DeSaulnier and State Treasurer Bill Lockyer on Wednesday, February 23, 2011.

2. A February 7, 2011, article by the Legislative Analysis Office entitled Update on School District Finance in California. The article can be found at http://www.lao.ca.gov/analysis/2011/education/ed_survey_two_020711.aspx.

3. California County Superintendents Educational Services Association’s (CCSESA) paper entitled: “Basic District Fiscal Oversight Common Message Background and Advice to County Office of Education CBOs 2010-11 Second Interim Report and Related MYPS, February 9, 2011. This paper is posted on our website at: http://www.mdusd.org/Departments/Fiscal/Documents/Website%20-CommonMessage020911%20BASC%20CCSESA-02-25-11.pdf.

4. A memo from Bill Clark, Associate Superintendent, Business Services Contra Costa County Office of Education outlining the Second Interim Guidance 2010-11. The memo is posted on our website at http://www.mdusd.org/Departments/Fiscal/Documents/Website%20081%20Second%20Interim%20Guidance-02-25-11.pdf

According to the above-referenced CCSESA paper:
Governor Brown has acknowledged that education has been the only major program that has taken disproportionate budget reductions since 2007-08. Therefore, he committed to protect education by proposing flat funding for education for 2011-12. However, flat funding really results in about a $19 annual per pupil reduction.

The 2011-12 Governor’s Proposed Budget was submitted with an estimated 18-month budget shortfall of $25.4 billion, comprised of an $8.2 billion shortfall in 2010-11 and a $17.2 billion shortfall in 2011-12. The Governor’s proposal addresses the shortfall in three ways: (1) reducing expenditures by $12.5 billion over two years (2010-11 and 2011-12); (2) enhancing revenue by $12 billion over the same two-year period to be achieved through a June ballot measure to extend the temporary taxes enacted in 2009-10 by five years (.25 percent surcharge on income tax, 1 percent increase in the sales tax, .5 percent increase in the vehicle license fee); and (3) borrowing $1.9 billion from special funds and other one-time measures.
The success of this proposal largely depends on a two thirds bipartisan legislative approval to place the tax extension measure on the ballot and then on a majority of the voters approving the tax extension. Additionally, the Legislature would have to agree to expenditure reductions similar to ones that they have rejected in prior years. Part of the Governor’s strategy is a proposal to realign or to shift responsibility of many programs along with the revenue sources to local governments. This shift would include using one-time Proposition 63 funds of $861 million to fund community mental health services. Clearly, there are many challenges ahead for the Governor and the Legislature to balance this budget.
If all of the Governor’s strategies are enacted, then the total K-14 Proposition 98 funding would be $49.3 billion, slightly less than the 2010-11 level of $49.7 billion. This would amount to a reduction of approximately $600,000 for our District.
Another major impact for education in the Governor’s proposal is the deferral of several apportionments. School districts are not paid in one lump sum at the beginning of the year. We receive incremental payments (apportionments) throughout the fiscal year from July through June. In the Budget Proposal, the Governor recommends delaying our payments for April, May, and June until July 2011, which is in the next fiscal year, and then delaying the July 2011 payment until July 2012, again another fiscal year. In essence, this will delay $25 million in payments from this school year by 12-15 months to the beginning of the 2012-13 fiscal year. Basically, the State is taking their cash flow crisis and making the school districts deal with it by deferring our payments.

How will the District deal with this cash flow issue in order to pay employees and keep our schools running? In order to deal with these deferrals in payments, the District will have to go out for a short-term loan called a Tax Revenue Anticipation Note (TRAN). Basically, a TRAN allows a school district to borrow money for up to 12 months and then pay back the loan when the deferrals come in.  Since school districts are being delayed payments for a total of 15 months we may have to go out for two TRANs because one will not be long enough to cover the deferrals that are being recommended. Bottom line is we will have to secure short term loans which will cost us thousands of dollars in issuance costs and interest.

The big unknown is whether or not the Governor’s revenue proposals will be put on a June ballot and whether or not they will pass. If either doesn’t happen, the minimum school funding guarantee under Proposition 98 would drop by an additional $350 per student annually. However, due to other constraints on the State’s budget, it is projected that Proposition 98 will be suspended and that education would be cut by additional billions of dollars which would translate into a reduction of between $650 and $1200 per pupil annually. This would mean a reduction between $21 million and over $35 million annually for the District.  At their presentation on Wednesday, February, 23, Senator DeSaulnier and Treasurer Lockyer both stated there was a 50-50 chance that the tax extensions would garner the Legislative two-thirds support necessary to put them on a June ballot.

In a letter from the Contra Costa County Office of Education (CCCOE), we are being directed to submit a Second Interim Budget in March that uses the assumptions that the tax extension fails and assumes a loss of $350 per student. This would amount to a reduction of approximately $11.5 million. The letter goes on to say that given the risk outlined in the Legislative Analysis Office analysis of the budget, the CCCOE ‘recommends that districts set aside an additional reserve equal or plan for approximately $300 per ADA in addition to the $350 reduction outlined above.’ This will amount in the District either identifying an additional reserve of approximately $9.8 million or making cuts that total $21.3 million ($11.5 M + $9.8M). This would be equivalent to subtracting 25 days from the school year and starting the school year on approximately October 1.

What can our community do to help ensure that we do not have to reduce our budget by an additional $21.3 million?

1. Work to ensure that the Legislature approves placing the tax extensions on a June ballot.

2. Work to ensure that all community members thoroughly understand the negative implications for our children’s education if the tax extensions do not occur.

3. Work to ensure that every parent with a child in the Mt. Diablo Unified School District participates in the democratic process that we hope will occur in June.

At a Board workshop on Tuesday, March 1, the Board will discuss the ramifications of the budget reductions outlined above and review potential reductions to be included in the Second Interim budget. The Board workshop will be held in the Board room at the District Office and begin at approximately 6:15 p.m. The Board will then adopt the Second Interim budget at the regularly scheduled Board meeting on March 15.”

[END SUPERINTENDENT'S MESSSAGE]

Although Lawrence says the cuts necessary would be the equivalant of slashing 25 days from the school year, the district doesn’t have the option of taking such a drastic measure. Instead, trustees must find other ways to make the necessary cuts.

Lawrence told me the he expected to revisit ideas for cuts that have been rejected in the past, as well as look at new ideas to reduce expenses.

What do you think the district should cut to make ends meet?

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  • Doctor J

    Without a Strategic Plan, MDUSD is lost in the wilderness without a compass. How many more months will go by before we even start the process. I said well over a year ago, we need to close 6-8 schools and needed to start the process then. You saw what happens when you start to closes schools by shooting from the hip — we need the Strategic Plan NOW.

  • Momof3

    I have to wonder why the Willow Creek Training Center is kept open. There are plenty of empty classrooms throughout the district, MUR’s that can be utilized etc. It is a huge facility on Mohr Lane that could be rented out to the private sector.

  • another mdusd momof3

    Doctor J, they are starting the process of a strategic plan. But who could plan these sudden drastic severe cuts, especially the mid year cuts? No way to prepare for this. I verified that they are starting this plan with a BOE member.

    Mom of 3 the Diablo Day school is on the Willow Creek Campus. The State and Ed Code mandate this type of school must be held on a campus with no other students. Right now the costs associated with leasing another facility and moving the program are more. Maybe in time this facility can be closed once other schools are closed. I am afraid we will see more school closures because of the drastic cuts still coming, another $25 million at least if the tax extensions are not placed on the ballot and passed.

  • 4Students

    Speaking of classrooms, why is the new bond sale to build new classrooms at CPHS and CHS? How does this affect the other high schools, like MDHS which may lose students if they open a Bay Point High School (or consolidate a 7-12 school so students can stop bussing to MDHS), and NHS which has teachers sharing classrooms (proving the capacity numbers given to SCC were wrong). Shouldn’t they consider the Superintendent’s soon-to-be-formulated comprehensive high school plan first? Shouldn’t they redraw school boundaries and create K-12 high school feeder patterns first? Shouldn’t the district have a strategic plan first?

  • Theresa Harrington

    Another MDUSD Mom of 3: Yes, the board plans to hold its first strategic planning session April 26.
    4students: You make a good point. Part of the rationale for moving small necessary high schools off the CHS campus is to open up those classrooms for use by CHS students. If the district is building new classrooms there with Measure C money, perhaps the small necessary high schools don’t need to be moved after all.
    Also, I thought these improvements were in the works before the Measure C election.

  • Doctor J

    @Another MDUSD Mom of 3: April 26 is nearly two whole months away. Tonight they will talk about cuts WITHOUT a plan. Instead they will use a Ouiji board. Gary and Sherry promised a Strategic Plan in 2008 — they still haven’t started. Does that make you feel safe and secure ? You ask who could plan for these cuts ? We have been in a financial crisis for three years. Its not about closing 2 schools — its about closing 6-8 schools. Its about dollars ending up at the school sites, not at the Dent Center.

  • Doctor J

    Poseidon Paul claims I never propose solutions — he sure went silent when he was outed. The God of the Sea, more than anyone else, should know that loose lips sink ships. Here are some proposals that I double dare Gary to lay out on the table for discussion tonight.
    1. Eliminate all medical benefits for board members.
    2. Reduce the Supt and all Asst Supt’s salaries by 20%.
    3. Reduce all directors salaries by 15%.
    4. Double up small elementary schools to share one principal.
    5. Eliminate Vice-principals at Middle Schools. It worked in Elementary schools.
    6. Cut by 50% vice-principals at high schools.
    7. Rescind the Gang of Five raises.
    8. Hire another in house lawyer for the legal department and reduce outside lawyers to $100,000 from $600,000. Require ALL inside lawyers, including Rolen, to have 2000 “billable” hours per year.
    9. Immediately freeze all longevity salary increases of administrators.
    10. Immediately stop ALL overnight travel, seminars, conferences, unless approved by the board.
    11. Stop watering the lawns, reduce mowing to once a month, and stop weeding.

  • Theresa Harrington

    As an alternative to traveling to conferences, the district could consider free webinars, such as this one, focused on “Leading Successful School Turnarounds: Learning from Research and Practice”
    http://www.wested.org/cs/we/view/we_e/1180
    The first day emphasizes effective SIG implementation.
    The second day stresses “optimizing teaching and learning, with breakout sessions focused on effective instruction in mathematics and adolescent literacy; effective instruction for English language learners, monitoring progress, and making midcourse adjustments; and Response to Intervention implementation for secondary schools.”
    The Mt. Diablo district is struggling with English language learner instruction.

  • Wait a Minute

    Good job Dr. J.

    So Poseidon is Strange. Makes sense.
    Notice how he bailed off the board as soon as outside investigations were called for like a Grand Jury.
    God forbid he ever be implicated in the many scandals seething around the MDUSD upper management and the board.
    He probably didn’t want to risk losing his law license. In any case the damage is already done under his tenure (like the hiring of the sleezy Lawrence due to his wife’s Clayton connections).

    I thjnk your list is a very good starting point and selfless actions such as these could really bring some public respect back to the MDUSD. Maybe Cheryl Hansen will step up and make some motions to this effect.

    The board giving up their health benefits would help to prove their personal commitment to sharing the pain. I never agreed with policies that financially reward board members for public service anyways.

    Unfortunately, people suffering from narcissistic personality disorders aren’t known for selfless sacrifice like the recent trip of Lawrence to the Asilomar Conference Center. I doubt he will satisfy himself with online conferences when he misses out on 5 star accomodations and meals.

  • Anon

    Strange is passing himself off as a sea god?

  • 4Students

    This is great! Theresa, the FREE webinars sound perfect! A MDUSD teacher says she’s told to raise scores but gets no guidance from the Dent Center, so that “optimizing teaching and learning” webinar should help her and the other teachers. What does Rose Lock think? Will MDUSD ever implement any of these great ideas?

    Why is MDUSD which is near Silicon Valley so backwards with technology?

  • Doctor J

    I wonder how many administrators they are flying to LAX to stay in the Westin instead of watching it for free on the Webinar ?

  • Anon

    Pink slips for 33+ music teachers? Isn’t that the most/all of the entire staff of credentialed music teachers within MDUSD?

    It appears that 14 FTE’s for music are proposed to be cut via item “N3 – Eliminate elementary prep (vocal)’ from the agenda doc “potential cuts round 1 11-12.pdf”

    http://esb.mdusd.k12.ca.us/attachments/0556e5d2-c38d-43b8-b058-0dde273df9e0.pdf

    So does this means more bumping for this coming school year? e.g. Greg Brown (NHS), Gary Coartney (CHS), Mundy Viar (CVHS) all could get bumped by elementary school vocal music teachers who have more seniority?

    Such a sad state of affairs.