And Still We Have No Budget

I rarely comment in this space about comments to other posts, but given that I am trying to bring together multiple threads into a single article, it actually works quite well.

The anonymous commenter said:

"I agree the State Legislature is bad and has been that way for more than a few years. The self serving Nunez and Perata are gone and that helps. I think Arnold has been trying to get everyone to see the light for a couple of years now. But they all have their special agenda's to follow."

Having covered the state government for over two months now as my "day job," I have to strongly disagree with the Mr. Anonymous here. The Governor is the problem--he does not lead, he issues fiats and then goes on extravagant trips.

Let us for a few moments throw out politics altogether and forget about whose side we agree with and whose side we disagree with. Let us also throw out the fact that California's two-thirds requirements are unworkable. On a side note, the Public Policy Institute of California's poll shows for the first time ever a majority (bare as it is) support for reducing the two-thirds requirement to pass a budget to 55%.

But back to the problem. Everyone talks about how they do not like politicians. Let's face it, they are unsavory. They are often cold, calculating, and bent on scoring political points over sound public policy. But there comes a time when you just need to get things done. And let's face it, we are long past that in California.

When there is a budget deal, and there will be at some point, no one is going to like it. The Republicans are going to have to accept the fact that taxes have to go up because you simply cannot make enough cuts to balance the budget without causing more problems than you solve. Democrats are going to have to accept the fact that we are spending too much money and have to cut and that unfortunately they are not going to be able to just cut programs that they don't like, they are going to have to cut into programs that they do like and from their perspective, do work.

Everyone is going to hate something about this budget.

So back to the Governor. The Governor cannot do this by fiat. The Governor cannot try to do this from afar. If he wants to portray the severity of the problem, then he needs to be traveling around explaining the problem to constituents. He needs to park himself in Sacramento and he needs to roll up his sleeves and work. Until he is willing to do that, this budget problem is not going to be solved.

Moreover, the Governor has one primary responsibility in this process, he must get enough of his own party on board with him to strike a deal. This is a complete and total failure on his part. If Arnold were merely having to work with the Democrats, there would have been a deal a long time ago. The Democrats for the most part have been willing to compromise far more than the Legislative Republicans. I am sorry, but in my book that is Arnold's failure. All he needs is three votes from the Republican party. He should be able to offer enough inducements to get three members of his party to sign on, but he has not been able to do this so far.

There is a ripple down effect here that is going to be tremendously devastating. First, the governor is trying to balance the budget on the backs of state workers right now. Folks, most of these guys aren't like the Davis Firefighters making $150K per year in total compensation. These are people who make maybe $30 to $40K. A ten percent cut in their salary means somewhere between $300 to $400 per month in cuts for people who are largely living paycheck to paycheck.

Budget cuts are preferred by many over tax increases. Sales tax may be regressive, but think about it this way, a 1% sales tax increase means, one additional cent per dollar, it means one dollar additional tax per $100, it means ten dollars additional tax per $1000. You are telling me that people who make a $1000 purchase are going to notice $10 additional in sales tax?

On the other hand, budget cuts mean people will get laid off. One proposal for example had Republicans suggesting $10 billion in education cuts. Let us not forget what that would actually do to education, probably the most important thing we spend our money on, that's probably 20,000 teachers laid off. What would that do to the economy. We've had to suspend construction projects to the tune of $660 million per month. For crying out loud, the stimulus plan that Obama is looking at is trying to create construction projects to stimulate the economy. And we are cutting those jobs?

A lot has been made about furloughing state workers. People seem anti-state worker until of course they can't get their unemployment check or go to the DMV, because it's closed on a Friday when they should be open to collected revenue for the state. Then suddenly they realize that they need state employees to run our state. They provide a service. They are "public servants." We actually need them. Of course you say, private sector is laying off their workers, local government is also furloughing their workers. But wait, there is one big difference, let's start at Yolo County by way of example.

Remember as I said earlier, Arnold likes to govern by fiat. There is a process by which furloughs should be considered. It is the collective bargaining process. If the County cuts employee work days and salaries it occurs in negotiation. If the school district cuts employee work days and salaries it occurs in negotiation. If the city of Davis cuts employee work days and salaries it will occur by negotiation. That is how the rights of workers are protected. Almost every agency has been willing to sacrifice so that employees are not laid off. For all the perception out there, that is an amazing thing.

However, Arnold wouldn't and won't do that. This despite public employees groups publicly suggesting that they would be willing to work with the state to make things work to avoid layoffs. This despite what Speaker Bass said on New Year's Eve that the Democrats would be fine with holidays and furloughs as long as it was part of the collective bargaining process.

Yolo County is in many ways in deep trouble. They will be $18 million in deficit. That is one-third of their operating budget. There was a good story Friday in the Sacramento Bee on the relative success of Yolo County in instituting voluntary furloughs since May. That's right, voluntary furloughs. That is how job losses have been avoided. But this occurred with the help and consent of the bargaining units as opposed to forcing furloughs upon them.

That, at least, has been the experience of Yolo County government workers – for whom unpaid time off has become the norm over the last seven months.

Beginning last spring, when county officials realized they had to cut costs, Yolo County employees either volunteered to take time off or eventually faced mandatory furloughs.

Many say their experience has been surprisingly positive, despite the pay cut.

The Governor does not operate that way. He issues demands and fiats and expects people to comply. What he discovered is that that type of approach produces resistance rather than cooperation.

Let us not kid ourselves, the situation would be dire no matter what given the nature of the economic crisis before us, but had Arnold agreed to a budget in December, California would be in far better shape.

For one thing, we would be working with real budget numbers rather than assumptions. People's lives have been torn apart based on these assumptions.

Look no further than the school district. They are going to have to put people on pink slip notice once again because they cannot assume budget flexibility. If we had a budget, they might not have to do this. They are going to have to ask teachers to take a 2.5% pay cut. This will be negotiated. It is not preferred, but it will be done if need be in order to prevent job losses right now.

I actually think Sheila Allen summed it up the best:

"It's just so frustrating that we have deadlines that we have to meet and other elected officials are not. So we're working with 'fiction' and we're messing with real people's lives when it's based on fiction, it's very frustrating."

I agree. I'm sorry anonymous, but from my standpoint, Arnold doesn't know how to negotiate. He doesn't know how to lead. The departed President found himself in a similar situation. Oh he had conviction to the point of stubbornness, but like George Bush, Arnold never learned the most valuable lesson of all, you aren't a leader if no one is following you. Until Arnold learns that lesson, these budgets will only get more difficult and more and more people's lives will be torn apart.

Come on Mr. Governor, it's time to step up and solve the budget crisis not by will, not by fiat, but by cooperation and in true spirit of negotiation.

---David M. Greenwald reporting

Drastic Measures and Grandiose Gestures by the School District

The headlines that came out of Thursday's school board meeting were dramatic with the Superintendent suggesting that the top four administrators would take double the pay cut that they were asking teachers to take in order to send the message that they were serious about the school budget crisis. Beneath those sensational headlines is a truth that is every bit as bleak but perhaps not quite as sexy.

The truth is somewhere in between here. The first factor that people need to understand is that in some ways what was discussed on Thursday night was the choice of the school board. They were presented options the previous week and could have chosen to self-qualify.

Self-qualification is a complicated process that was explained on the Vanguard radio show fairly well on Wednesday night. But in short, given the budget crisis, the district could have taken the latest assumptions from the governor's budget, said that they would deal with 2010-11 in due time, and cal it a budget.

The problem as Cathy Haskell current DTA President and Ingrid Salim, incoming DTA President explained on the radio show is that the board was told last year that self-qualification would be a red flag to the county that there were fiscal problems. That is because a large extent of the district's fiscal problems last year were in-house and local. That is not the case this year. There are estimates that 70% of the state will self-qualify. The reason for self-qualification is that the first two years of the budget would be balanced but the third year, 2010-11, would have an on-paper deficit that would need to be addressed. In a state budget crisis year, this is not the alarm bell that it would have been last year.

Nevertheless the board was not comfortable with self-qualification and instead are looking for the three year balanced budget. The result is additional pain of trying to anticipate three years out without even hard numbers for this year's budget. And they must do it by March 15.

As Sheila Allen put it on Thursday:

"It's just so frustrating that we have deadlines that we have to meet and other elected officials are not. So we're working with 'fiction' and we're messing with real people's lives when it's based on fiction, it's very frustrating."

In addition to the school board making the situation harder, Thursday's budget also assumed no flexibility. This is probably a wise decision at some level. The CTA has launched a veritable battle against any flexibility in CSR (Class Size Reduction) requirements. Moreover, they have opposed categorical flexibility as well. Still, it appears likely there would be some flexibility.

As we walk quickly through the numbers, all of this suggests that the grand gesture (largely symbolic) made by the top four might actually be a worst case scenario rather than the operating assumption that was suggested in the headlines on Friday.



The budget challenge as laid out by Bruce Colby is how we reduce the cost of delivering our programs without reduce the level of the programs we provide. Moreover, the district has a structural deficit, it is basically eating at least $1 million in reserve each year by these budget assumptions. It is doing that in order to both maintain our programs and avoid the painful layoffs that were proposed last year.



In short, what the district needs to do is to reduce on-going expenditures by $4.9 million or more over the next two years to maintain fiscal solvency. That is $3.3 million in 2009-10 and an additional $1.6 million in 2010-11. And 2010-11 is probably on the low side unless the economy and budget forecast improves. Even with that, the district will continue to have a structural deficit of $1 million which will need to be addressed by 2011-12.

As Associate Superintendent Bruce Colby said:

"At some point we will run out of reserves and we will have to close the gap for the last million dollars."

The district examined the salary breakdown for 2009-10 by bargaining unit. Their proposed cuts are roughly proportional cuts across the three classifications ranging from 3.68% among classified (support staff), 3.88% among certificated (teachers) and 4.15% among unrepresented (management and administrators).

Under this scenario they are taking out three counselors, they think they can find 200,000 by shifting around unused parcel tax money, but $910,000 is coming from increasing the student to teacher ratio for grades 4-12 which are not governed by CSR requirements. That means losing teachings, perhaps as many as 14. Some of that could be obtained through attrition--retirements and transfers.

However, and here is where the real painful decisions come in. Those cuts still leave the district one million dollars short.

So the bottom column on the grid shows the possibilities for accomplishing that savings. One is what was talked about last week, would be federal stimulus package dollars. It is possible the district will get $2.7 million, but we would have to look more closely at the Senate's version. There is also a possibility that the Davis Schools Foundation will be able to raise some of that money, but these days are a bit tougher for raising money than a year ago.

On the other side of the ledger are flexibilities that could be granted by the legislature. The adult education program has a $200,000 that is categorical money, which means that the district could be allowed to use it for general fund if they get flexibility on that. There is an additional $1.1 million in categorical money that could be used if granted by the legislature. And then there is about $1 million in CSR that could be used if they raise the ratio of students to teachers from 20 to 22. However, as mentioned that is going to be a political fight and the DTA seems to believe that there are other ways to get that money.

Now here is finally where we get to the sexy headlines which are not so sexy. If all else fails, one possibility is that the teachers and in fact all employees take a 2.5% pay reduction. That would free up $1.26 million that would cover that million hole.

It is here that we see the offer from the top four administrators coming into play.

Superintendent James Hammond:

"If there were to be any type of salary reduction for employees, that we would double whatever that salary reduction would be. So if we are looking at a 2.5% reduction to every employee in the district, then we the four of us would incur a 5% reduction for the 09-10 school year in order to contribute to our ability to prevent layoffs."

And let us not take away from this gesture. Because it is important to know that the administration is willing to share the pain, particularly after we have been so critical of Bruce Colby taking a pay increase of roughly 5% in these budget times. He is willing to give that back should it be needed.

As Board President told the Enterprise:

"They've being leaders."

But clearly this is the worst case scenario and the last resort. However, it does appear that the administration got the message from the community that has complained about administrative raises during a year when the district was contemplating layoffs and teachers were not getting raises.

The bottom line here is that while that gesture is appreciated a lot has to go wrong for it to be implemented.



However, we are not done. The cuts in 2010-11 under current assumptions amount to $1.65 million. Remember however those are on top of the cuts that would be implemented for 09-10.

At this point we are really getting into pure personnel unless the district gets stimulus money, gifts, or categorical flexibility. Because the district is looking for a three-year balanced budget, they are looking at 8 teacher layoffs for $520,000 in savings, 12 secretarial layoffs for another half million, and the loss of nearly three site administrators for $295,000. The latter represents a 6.26% cut in funding for the unrepresented bargaining unit, compared to 4.59% for classified, and 1.59% for certificated.

Those cuts however still leave the district nearly $300,000 short of balance.

In short, the district is making a lot of tough decisions right now that they really might not have to make depending on how the budget pans out. Much of this is due to the board's apprehension to do a self-qualification and work toward a balance for 2010-11 with more realistic assumptions.

There are going to be teacher's noticed. That is now unavoidable. It will not be the 100 or so that were noticed last year. But as the DTA representatives said on Wednesday, that took a huge emotional and psychological toll.

As Superintendent Hammond put it:

"There could be overnoticing going on but we do not know what the rules of flexibility are going to be."

As Board President Gina Daleiden put it:

"No one would do this unless we were at the very last resort."

I understand some of the rationale for doing it this way, but I'm not fully convinced it is the last resort. Given the state budget picture, a self-qualification does not seem to put the district in the kind of risk they would have been in last year, they need to trust their Superintendent and Chief Budget Officer who just last week recommended the self-qualification route to avoid these kinds of drastic cuts that may not have to be implemented. I understand the frustration that Board Member Sheila Allen expressed at the state budget process, the school districts are one of many victims of that inaction. But I am not convinced this was the only way to do this based on the other alternatives out there.

---David M. Greenwald reporting

Should DJUSD Alter its Secondary Education Grade Level Configuration and School Facilities?

An interesting discussion is beginning in the next few weeks, there will be site level meetings beginning tonight at Emerson, tomorrow night at Harper, next Tuesday at Holmes, and a week from Thursday at Davis High. The purpose of these meetings will be to gather input from parents and local residents in particular about grade-level configuration and district facilities.

Currently Davis High School is set up as a Grade 10 through 12 school. That is rather unusual however, most high schools, 90 percent in California in fact, are 9 through 12. Such a configuration represents both advantages and disadvantages as we learned last year through some preliminary discussion.

One of the big advantages is that it allows 9th graders to remain on junior high campuses rather than pushing them to the high school where they face added pressures as has been stated a number of times--it tends to keep the ninth graders younger rather than mixing them with 16 to 18 year-olds.

On the downside, the curriculum for 9th graders is set up more like that of the high school, this forces the junior high to provide those level classes to 9th graders resulting in inefficiencies and economy of scale problems.

In an November interview with the Enterprise, Superintendent James Hammand emphasized the fact that no decision had been made yet.

He said:

"One of the main things I'm seeking is for people to evaluate grade configuration through a couple of lenses... One is the programmatic and instructional lens. Are we configured the best way possible, the best way to maximize student achievement"

"The other lens is the fiscal and physical lens. When you take a headcount of our students, and look at our facilities, are we as efficient and effective as we can be?"

However, a number of groups and community members have expressed concerns about the change.

Becky Linville, Eric Davis, and Paul Stukas recently wrote a letter in opposition to the current proposal:

"We write on behalf of the Davis Friends of Neighborhood Schools, formed to support the current grade-level configuration of Davis schools (K-6, 7-9 and 10-12). We oppose the Davis Joint Unified School District's expected proposal to move approximately 680 ninth-graders into the crowded Davis High School campus of 1,700-plus students.

The district has shown no evidence that such a reconfiguration will assist the academic or emotional growth of our ninth-graders, or any other students in the district. Why risk our district's current academic achievements and low dropout rate by such a profound change?"

On the group's website:

"Friends of Neighborhood Schools believes there should be a compelling reason to change the Grade Level Configuration of the Davis Schools. At this point, we do not believe a compelling case has been shown. We have not seen any evidence or research that shows changes to the Grade Level Configuration will improve the quality of our children's education.

If 680 ninth graders are moved to the high schools next school year, there will be a net increase of approximately 400 students at DHS (assuming Da Vinci High School moves to Valley Oak and 80% of the Da Vinci students will move). Many people in Davis think DHS is too crowded now; how will it be with a net increase of 400 students? [NOTE: The Da Vinci Charter Academy petition approved by the School Board includes 10-12th grades at Valley Oak, and 7-9th grades phased in at Emerson Jr. High]."

The big question at this point is whether this is a fiscal decision or an educational decision. There seems to be costs associated with the current model in terms of providing the range of classes for 9th graders. On the other hand, it appears that moving kids to the high school would have drawbacks as well. As the group stated above, Davis High is already considered too large, and now you could propose making it a campus of 1700 students. The alternative would be to create two smaller high schools, but that would incur cost of converting a Junior High Campus, possibly Harper into a High School Campus.

The real question is whether the current system is actually broke rather than whether Davis schools are unusual. The fiscal environment make such matters important, but educational considerations ought to first come first.

Board President Gina Daleiden:

"I would like the discussion to include a broad conversation about our educational system, including financial, education and facilities uses in the future... It is very difficult to look at any of these pieces in isolation."

Boardmember Sheila Allen:

"I'll be interested in a balanced analysis of both the educational and fiscal impacts of various grade and site configurations. While we need to continue to look for financial efficiencies, we have to ensure that our excellent programs are supported by the structure at our schools."

Boardmember Susan Lovenburg:

"We must consider carefully the educational and social aspects of a change in our current grade configuration, as well as the financial implications. How do we best serve our students given the resources available? And understanding what the community values is an important part of making this decision."

While the issue is likely to cause controversy, the district appears at this point to be going about this the right way, by having meetings and reaching out to the community first before any decision is made. That is the fortunate part of acting proactively rather than what happened last Spring when the district was in crisis and desperately looking for any way possible to save money.

Here are the times and the locations:

* TONIGHT at Emerson Junior High

* TOMORROW NIGHT at Harper Junior High

* Tuesday, Jan. 27, at Holmes Junior High

* Thursday, Jan. 29, at Davis High School

---David M. Greenwald reporting

District Does Grande Property the Right Way and It Will Pay Off

Last night at the Davis City Council meeting, the City Council heard from the school district for the first time about the 41-unit proposed development on DJUSD property that the district has been hoping to sell for some time in order to provide some additional facilities money through the California Education Code’s provisions for the sale of public surplus property.

The result of the meeting was a unanimous 5-0 by the council to move the process forward. At the conclusion of the item, a good sized number of the Grande Property neighbors stood up and cheered. It was the end of a long process, but the last year and a half of this process has marked a model for government agency inter-cooperation between the school district and the city and an equally impressive model for government agency-neighborhood cooperation.

It was only just over one year ago, in their November 18, 2007 Op-Ed in the Davis Enterprise, that former DJUSD Board Trustees Marty West and Joan Sallee accused the newer school board with fiscal mismanagement regarding the Grande Property. They wrote:

“When we left the school board in December 2005, the finances of the school district were in good shape. Any financial mismanagement that has occurred has been on the 2006 and 2007 school board's watch. In early 2006, the board majority rescinded the $5.5 million contract we had signed to sell the Grande Avenue site, thus jeopardizing funding for building a student commons at the high school and modernizing Emerson Junior High School.”

The Vanguard has largely debunked that argument with a detailed recount of the Grande issue that was run on March 10, 2008 as the third installment in the Vanguard Investigation into Tahir Ahad and the dealings of the DJUSD Business Office under his leadership.

In 2005, there was no chance that the neighbors would have stood up and cheered. The early process was marred by neighborhood complaints and backdoor deals, the likes of which are still not fully known even after the Vanguard's investigation.

The gist of the arrangement was a shady three way trade in which the district fearing the city to the invoke the Naylor Act and require sale to the city at below market, tried to swap the land with UC Davis property near the Fairfield school and then sell the land to a Bay Area based developer.

From the March 10, 2008 Vanguard:

The arrangement that Superintendent David Murphy and Tahir Ahad had employed by October of 2005 was a land swap that involved a UC Davis property that was the home of Fairfield Elementary School. This piece of property that the university had not wanted was offered to Davis Joint Unified for at least three years prior to this land exchange. The university had been willing to simply give DJUSD the Fairfield School property at no cost.

Instead, the school district would enter into an agreement with BP Equities in which BP Equities would pay the school district $4.5 million in exchange for helping the school district to acquire the 10-acre site west of Davis. In essence, Davis Joint Unified would trade BP Equities the Grande Property in exchange for $4.5 million and the Fairfield School.

Coincidentally, this $4.5 million happened to be the same monetary amount that the district lost out on matching funds from the state when they missed the Montgomery Elementary school deadline. Questions have arisen as to whether the speed, urgency, and also secrecy of this deal had something to do with that lost funding.

The land exchange generated a large amount of controversy in the community. Under pressure for the seemingly sub-market value sale price, the offer was raised on November 22, 2005 to $5.5 million and the deal was locked in.

In the meeting when the board rescinded the original sale, Board member Provenza expressed his concerns for the process:

“I have an ethical concern about going forward because I feel that the process from the beginning was flawed. And it’s not because of anything that Mr. [Brian] Purcell [from BP Equities] did, he was negotiating with Tahir Ahad in good faith, but our process I believe was flawed from the beginning."

While that deal was approved by the previous board featuring Ms. West and Ms. Sallee, the newly elected board featuring Gina Daleiden, Sheila Allen, and Tim Taylor joined fellow board member Jim Provenza in rescinding the deal in early 2006, much to the chagrin of Joan Sallee and Marty West, who nearly two years later were raising the issue again last November.

It is interesting to note a letter from the Grande Neighborhood Association still posted on their site from September 2005:

"We also learned that Tahir [Ahad] and B.J. [Kline] were working under the impression that the neighborhood endorsed development of the Grande site for 48 homes (Alternative B that we discussed during the neighborhood meeting and potluck in June). We told him that was not the case - the neighborhood supported the concept of the other alternative, which had 33 homes, and was generally consistent with R-1-6 zoning (like that on the west side of the Grande site)."

Note the lack of communication between the two parties. Also note the fact that the district and neighborhood ended up splitting the difference in density right down the middle, with the neighborhood making it a point to give the district last night 41 units which the district wanted quite badly.

Since the time of that letter and the eventual board decision to go ahead with the sale, the district has completely changed its approach. They have met extensively with the Grande Neighborhood Association. They have worked out a deal with the district and the city to develop a 41-unit subdivision which reflects the basic density of the surrounding neighborhood.

Several neighbors came up and raised minor concerns with the plan but were thankful to the district for working with them on their concerns. The biggest concern was the safety issue of bikes pouring out onto Grande Avenue.

So the city council moved one of the lots, lot #9 it was called, which sat on the outside of the development. They agreed to turn that lot into a community gardens in order to allow bike traffic to flow there rather than through the more heavily traveled Mercedes Road which would flow into the new subdivision.

By working with the city, the district helped the neighbors to identify a longstanding safety issue. There are still some details that need to be worked out, but the neighbors are comfortable enough with the process and the commitment of both the city and DJUSD to addressing them, that the project has been moved forward and fast tracked.

One of the issues still be resolved is that the school district would like to prioritize affordable units for their own employees. That will have to take place by lottery and the district has agreed to indemnify the city should the issue of discrimination come up.

All of these issues should be addressed by January when this comes up for a second reading to the ordinance.

Many involved describe this as a win-win-win scenario for all involved. The school district has worked extensively with the neighbors to produce an acceptable development proposal. The district and city have worked close together rather than against each other as typified the early part of the process where the district tried to pull a shady deal out of fear that the city would invoke the Naylor Act.

Instead what we will see come forward is a fully entitled property that will hit the market. Even given the economic downturn and collapse of the housing market, there is nothing more rare in Davis than fully entitled property. As such, when the district puts it on the market, the selling price will well-exceed the $5.5 million that the district would have gotten had they gone through with the sale. Even at that time, there were credible offers, and the Vanguard has seen these in writing, from credible local developers for as much as $8 to $9 million. They sold it quickly to avoid public scrutiny.

From this standpoint alone and from the standpoint of working with the neighbors to gain approval, the district has contradicted the complaints of its two former board members.

But in all likelihood, the district will get far more than the $5.5 million. A prospective owner will quickly recognize that they do not have to build immediately, but rather they can buy the property and wait for the right market. The value is that they know this is Davis property and that the land is fully entitled and they only need to go ahead with the development agreement to make a huge profit.

It is a winning solution for all involved and shows the value of transparency and cooperation. This is the model now for how to do business whereas the previous process was the very model for how not to do business.

---David M. Greenwald reporting

DJUSD Moves Toward Changing Election Cycle

As I mentioned in a previous article on this subject, the move from odd-year elections for DJUSD board members to even-year elections make complete sense from a democratic standpoint and a budgetary standpoint.

From a political standpoint both Bob Dunning and Richard Harris expressed concerns about the major drawback, the fact that the board members would essentially be extending their term for a year. Looking at the issue purely from this standpoint however, obscures the benefits of the move. The biggest being the huge budget impact. But the secondary point being democratic factors. In 2007, around 30% of people turned out to vote for DJUSD board elections, Measure P, and Measure Q. In 2008, over 80% of the voters turned out to vote in the Presidential election and by extension in the Measure W election. Even in an average mid-term election, you are looking at well over 50% of the vote. To me it makes perfect sense and I will share more in the commentary portion of this article.

The board last night had their third discussion on this item without taking a vote. However, there is a clear three member board majority that favors this move pending a vote possibly next week.

The big change necessitating the move is also the fact that DJUSD would be the only election matter on the ballot in odd years and thus would have to bare the full cost of the election.

In a memo from Sandra Fowles, DJUSD Director of Fiscal Services she explains the impact:

"The district shared the ballot costs in 2007 with the Yolo Library District locally and the county costs with West Sacramento, Yolo County Office of Education (YCOE), and Woodland. In 2005 a statewide special election was held and the district shared costs with the state, the City of Davis locally and county wide with YCOE, Esparto, Winters and Woodland. In the election years of 2001 and 2003 the district did not share the costs with another district locally but shared the costs with other school districts county wide. The cost to run a Board member election in 2007 was 245% more than 2005. The cost is expected to increase another 43% for 2009 if Davis Joint Unified is to remain the sole election contest on the ballot for the November election.

The ability to conduct the district election strictly by mail is not currently an option. The County of Yolo is pursing legislation giving Yolo County this right."

County Clerk Freddie Oakley wrote the school district in September:

"The result of using that formula for the first time was a really awful "sticker shock". We subsequently adjusted the billed amounts downwards by removing some of the items that we were billing for the first time. In order to maintain a spirit of fairness and cooperation with the districts, we have permanently removed some of those items from the billing formula - for instance, the cost of my salary and the cost of some "allowable overhead." Any further adjustment would necessitate raising the issue with our auditor and Board of Supervisors.

In discussing ways to reduce or minimize election costs for the districts, we have discussed the advisability of districts changing their election schedules so that they move from the odd-year "Uniform District Election Code" (UDEL) schedule to the even-year "General Election" schedule.

We have posited that such a change would afford the districts the economies of scale that are the result of sharing the expenses of transportation, poll worker costs, "real estate space" on the ballot, and other inflexible expenses."

Board Member Richard Harris remains adamantly against the change, arguing that the voters voted him in for a four-year term, he considers it wrong to take an extra year.

Since he said it very succinctly in his December 4, 2008 letter to the editor in response to Bob Dunning's column, I will use his words from that which he forcefully reiterated last night:

"I will not vote to extend my own term of office because I don't believe elected officials should extend their own time in office.

I consider it a privilege to be on the school board and thank the people who voted me into office last year. But it is their right, not mine, to extend that term.

There may be savings from consolidating elections and I look forward to more discussion about the issue. But as I stated the other night, there are also benefits to school board elections being run separately from other elections.

We should consider those benefits versus potential savings from consolidating future elections without interjecting the notion of unilaterally extending our own terms."

Board Member Tim Taylor however passionately and eloquently summed up the counter-argument which seems to be carrying the day:

"The people elect you to take care of this district, and for anybody to say, well, 2009 we'll just bite the bullet, is not taking care of this district. And quite frankly I think that's thinking of the individual and not thinking of the collective. I think our job is to think about this district and think about the collective and think about what's in the financial health and security of this district. This is not a power grab for anybody, believe me. This is not even a personally wise decision for anybody to do on a personal level. It's only about the district. To think well it's not in my interest or I am somehow violating the trust... is the complete wrong way to look at this. The public has entrusted you with the financial security and the health of this district and if you say I'm going to spend fifty thousand dollars, much less a hundred and fifty thousand dollars, much less five hundred thousand dollars in 2009 that you don't have to spend, you're not entrusting, taking on that public trust ability. And quite frankly that is the beginning and end of the story."

Mr. Taylor doesn't see this as an equal decision, but he said that there are real on the ground consequences

Past Board President Sheila Allen:

"I am willing to take one for the team, to stay one more year if it meant a school could stay open, a teacher's job could be saved..."

She continued:

"I would do all sorts of things for this school district to save programs."

Newly elected Board President Gina Daleiden summed it up:

"I agree with what Tim and Sheila have said because I closed a school, we're still battle scarred from that. I won't do that again for a few more months because I have a funny feeling about it."

Ms. Daleiden continued:

"I think it's a no-brainer when you are talking about laying off teachers and destroying programs."

I agree with the position of Boardmembers Taylor, Allen, and Daleiden. I think this is a no-brainer. Frankly, if the biggest cost is the political future of board members because of this move, it is a small price to pay. It is far better than the prospect of closing a school or laying off teachers. We are not talking about a small sum of money here, we are talking about perhaps half a million or more. That's a school right there. That's perhaps eight FTE teaching positions.

I think Tim Taylor is absolutely correct when he said that the voters elected the board to take care of the district, and this is the best way to take care of the district.

One of the first votes I cast was in an election in San Luis Obispo which consolidated the ballot to even years. From a financial standpoint it makes sense and from the standpoint of democracy, getting good voter participation it makes sense. The 30 percent turnout in 2007 was both a waste of taxpayer money and problematic for democracy. And we saw that the city could support education even when 80%-plus turn out at the polls and I suspect people were as aware if not more aware of Measure W as opposed to Measure Q.

One final point, it seems like they would put the parcel tax on February 2012 ballot and it would take effect for the fall. The downside to that is that if it were to fail, the district would have some difficulty getting it on the June 2012 ballot. But it may be possible. That would be the only hurdle to that dilemma, I know people were asking about it for the townhall meeting.

As Tim Taylor pointed out, this is not a political power grab, this is a prudent economic cost savings during one of the worst financial times ever. If board members such as Richard Harris are uncomfortable with that, and I can respect his trepidation, they can always resign. I do not say that flippantly and I hope that Mr. Harris, despite my perhaps policy disagreements with him, does not resign over this matter.

It appears this will be put to rest next week, I hope they can vote on it and I hope it does not end up a 3-2 vote, which might be more harmful than the action itself.

---David M. Greenwald reporting

Down the Homestretch for Measure W: Multiple Views on the Ballot Measure

If Measure W passes, the good news is that Vanguard readers will have plenty of other things to read about and this blogger who sometimes acts as a reporter will not have to stay up until 1 or 2 in the morning to watch school board meetings.

Yesterday someone in the comment section asked me how much I was getting paid by the district, implying that I was a shill for them. I can understand how someone would feel that way. I have spent many many hours in the last year working on this blog and elsewhere to get Measure W passed.

Granted I have been talking about a parcel tax for far longer, but the first mention of Measure W was August 3, 2008 on this blog. Since then this will be the 17th article I have done mentioning Measure W.

Tomorrow, we will have a very special report on the Measure Q oversight committee. I encourage everyone skeptical of that process to read what Bob Schelen has to say.

Today, we are going to take a look at what a number of people and others are saying about Measure W.

The Davis Enterprise has letters from four of the five school board members supporting Measure W. I am not certain if Susan Lovenburg has already submitted a letter, but if she has not, do not read anything into it. She was out at the MU on Monday working hard trying to tell students about Measure W.

Board President Sheila Allen actually posted this on the Vanguard as well, yesterday.

I am going to post her entire post here for those who do not read the comment section.

She directed people to note that she is a strong supporter of neighborhood schools:

"Note especially the last paragraph. I am a firm supporter of neighborhood schools for many reasons that I have publicly presented during School Board meetings for the Valley Oak and the Emerson discussions. Please show your support by Voting Yes on W."

Here's the body of her letter:

"We moved to Davis because of the great schools. This is true for our family. I have received many emails from concerned citizens that begin with that very sentence. But, because of an on-going decline in state funding for public education the ability to continue our great programs is at stake.

This year the district cut $1.1 million dollars from the budget and still faced the specter of cutting an additional $2 million in program. With a budget that is over 80% direct student-related personnel, these dollars mean teacher jobs. Last spring hundreds of students, teachers, parents and community members lined up to ask that their program or position would not be cut. Luckily, the Davis Schools Foundation was able to rally the community to temporarily fill the gap for this school year only. Measure W will mean the teachers and our programs will continue for the next 3 years. Measure W means the Davis public schools will continue to be a great place to learn for all of our students.

On November 4 you have the opportunity to provide a solution. Coming to protest in March will not be a solution. The solution to save the teachers and program is now--and it is Measure W! Please vote yes on W."

Then Gina Daleiden and Tim Taylor:

"Clear and straightforward, if you support science, math, English, foreign language, music, social studies, librarians, athletics, debate, journalism and the teachers who enliven the minds of our next generation, then you support Measure W. The choice is clear.

We are all too aware of the state budget crisis and the impact that has on school funding. Local dollars are needed to maintain our quality programs here in Davis - among the best in the state - because state dollars simply do not.

You may find yourself asking, is the school district running leaner in these trying economic times? Absolutely. DJUSD spends more than 80 percent of our discretionary budget on expenses directly related to classroom instruction - teachers, counselors, principals and para-educators. Of the remaining percentage, we've cut $1.1 million, including eliminating one of the top three administrative positions, squeezing site budgets to levels difficult to sustain, and cutting operating costs. Our administrative budget falls in the lowest tier in the state, lower than most school districts, and even lower than many nonprofit organizations.

Despite all of this, the shortfall in funding is over $2 million annually. It is simply not possible to cut these funds without severely impacting the classroom and our kids. Vital programs and teachers will be lost. Our school system, our community and, most importantly, our children will lose."

Boardmember Richard Harris makes a plea that they need a two-thirds vote:

"To succeed, we need two votes in favor of Measure W for every one vote against it. Unlike the presidential race, where a candidate can win without gaining the most votes nationwide, or the local bond measure for community college facilities that can pass with only 55 percent of the vote, we need a super-majority of two-thirds support to pass Measure W. A simple majority will not be enough to save our schools.

Measure W is a true test of this community's willingness to take local responsibility in these uncertain economic times for key education programs like science, math, music and libraries.

We've reached out to voters during this campaign and we know a majority of voters, and overwhelmingly parents, support investing $10 a month in their community. A clear majority of voters definitely agrees with The Enterprise, the Chamber of Commerce and the Yolo County Taxpayers Association that Measure W is good for the schools and the community.

But there are many more potential voters in households without students attending Davis schools than households with children in the schools.

So parents, now is the time to get out of your comfort zone and go talk to your neighbors who don't have school-age kids. Tell them about Measure W, emphasize that strong Davis schools make our community strong and Davis a better place to live. Earn their support and then make sure they vote."

Do not take the word just for the elected members of the school board. A few weeks ago, the Sacramento Bee Endorsed a Yes on Measure W vote, citing: "APPROVING PARCEL TAX WILL PRESERVE A TRADITION OF GOOD SCHOOLS"

They write:

"Voters approved the last four-year parcel tax in November 2007, for $200 per parcel.

Since that 2007 parcel tax passed, however, the state's budget situation has worsened, and with it the situation in local school districts. The Davis school district faced $2.8 million in cuts this last year. A one-time fundraising effort by the Davis Schools Foundation staved off $1.77 million in cuts, but the district still had to chop $1 million out of the budget.

So now the Davis school board is back, asking voters to add $120 a year to the 2007 parcel tax to avoid program cuts. Measure W would raise $2.4 million a year for the next three years."

They continue:

"The additional $2.4 million a year would allow the Davis schools to preserve elementary science and music programs; preserve librarians at elementary and secondary schools; preserve class-size reductions for ninth- and 10th-grade English and math; preserve class periods for foreign language, music and physical education; and preserve extracurricular drama, debate, journalism and sports programs.

Measure W does not fund new programs.

If voters do not pass the parcel tax, the school district will have to cut $2.4 million from its budget."

They discuss a criticism of the parcel tax:

"The main criticism of parcel taxes in general is that because they are a flat fee on every parcel, lower-income households bear a disproportionate share of the burden. Davis mitigates that by making the parcel tax lower on apartments ($50, instead of $120 in Measure W) and by exempting property owners age 65 and older, who fill out a form and return it to the school district."

Finally:

"Davis residents have a long history of extraordinary support for their schools, and every school in the district performs above state goals on the Academic Performance Index. To continue the tradition of excellence, Davis voters should vote "yes" on Measure W."

Here are a couple of fliers, in case you have not seen them. The first, is a flier sent out by the Davis Teachers' Association and I'm not sure where the other one comes from.

---David Greenwald reporting

Commentary: Painful Times Ahead for DJUSD

This is what we have come to--on Thursday night, the Davis School District, faced with a huge budget cut, put on the table the notion of rolling back teacher salaries by 2 percent. The motion was made by Richard Harris and seconded by Susan Lovenberg.

If the motion had been approved, Mr. Harris would then have asked administrative staff to take a similar temporary pay cut.

The idea purportedly came from one of the PTA presidents, who wondered how many teaching positions could be saved if teachers would agree to forgo their salary increases until after the state budget approval, which is expected to happen sometime in the late summer or early fall.

Richard Harris operated under the belief that up to $1 million would be added to the budget from the state once the agreement is actually reached but by that point it would be too late to do much with the current budget--unless you are dealing with salaries that could be the first thing adjusted once a budget passes.

There is a logic to Richard Harris' proposal, but the rest of the board Tim Taylor, Gina Daleiden, and Sheila had serious doubts.

One problem was that the idea came forward from a board member rather than either the Davis Teachers Association or the California School Employees Association. In fact, the president of DTA, Tim Paulson told the board that a 1 percent salary rollback had been proposed at a recent meeting but failed without so much as a second. CSEA also had problems with a rollback.

Tim Taylor I think clinched it in my mind:

"If we pass this motion, we're saying (to employees) 'Why don't you step up to this 2 percent?' We're not asking this of doctors and lawyers. ... We're asking this of teachers and other staff who we'll all admit are not paid enough already."

Sheila Allen examined whether there was even time to pursue such negotiations, but Kevin French indicated that there was not.

For Sheila Allen it became an issue of timing:

"I don't think we can get the information out to the membership to put the money back into the budget in time so that we can use it. I can't support this motion tonight."

In the end, the correct answer probably came from both Sheila Allen and Gina Daleiden--from a practical standpoint, it is not clear that they could have gained sufficient buy-in from the teachers in the amount of time available to contemplate such a decision.

The choices here are quite horrific, at this point in time, it is really not a realistic option. On a philosophical level, I think I have to side with Tim Taylor, himself a lawyer. Asking people who are not paid enough to begin with, to take a pay cut, does not seem a responsible course of action. But then again, cutting positions is not a comforting action either.

In the meantime, the board also delayed the decision on additional pink slips to classified employees, that decision will be made on April 28, 2008 at the very earliest.

It seems to me that the district has taken a lot of options off the table, but at the same time, it seems pretty clear that they still have to make these deep cuts. None of these cuts are going to painless. They already decided that they could not close a school on this kind of notice, which is probably the right decision but it nevertheless puts another $500,000 in cuts back into play.

Hence we have the proposal to cut classified positions. However, now six elementary school principals warn that serious problems will result if school secretaries' hours are reduced.

Here's what I have come to the conclusion about watching this process. There has been perennial speculation out there that public schools are run inefficiently, that they waste huge amounts of money. And yet, when push comes to shove and they actually have to make deep and real cuts, they are not able to do it painlessly. To me that's an indication that there is not nearly as much waste in a school district as people think.

Perhaps there were too many administrators, but even cutting some did not dent the budget and the amount of work performed by the administration, I think is severely underestimated. The additional workload with reduced staff will have consequences.

On a school site itself, who are you going to cut? Teachers? Secretaries? Principals? Other support staff? Each of those carries with it, vital tasks and duties.

When we are talking about cutting salaries for professionals who -most in society acknowledge- get paid too little to begin with, you suddenly realize that the amount of waste in public schools is not nearly what most think it is. We can cut painlessly perhaps on the margins, but once we get into real cuts, there is nothing but pain to go around and that's why these decisions are so difficult and why the process is taking so long. In the end, we are going to have to make decisions and do things that really hurt--that is the only way to avoid even worse consequences of losing control of the operations of our district.

---Doug Paul Davis reporting

Davis School Board Votes to Keep Three Junior Highs

After long discussion over the last several weeks, the Davis School Board voted by a 3-2 vote to keep three juniors and keep the secondary schools in the same current configuration with Davis High School remaining a 10-12 program and DaVinci High School remaining on the Davis High School campus.

Gina Daleiden in her dissenting vote made it clear that the vote was not necessarily on the substance of the issue, but due to the fact that the vote was not tied to corresponding budget cuts. The same is true from Tim Taylor's vote as well.

In addition, the school board voted to keep hire three Principals to fill the vacancy at three elementary schools.

Earlier in the evening Superintendent James Hammond made a radical suggestion of offering to save the district over $100,000 by performing a duel role of Principal at an Elementary School while at the same time continuing to serve as the district's superintendent.

Gina Daleiden would say that "this is one time we need to save James, from James." Arguing that the situation was not feasible from a workload standpoint. She also suggested there would be a potential conflict to have the Superintendent of the District tied to one elementary school site.

The board would vote by a 4-1 margin to take this option off the table with Tim Taylor dissenting.

Commentary

I am pleased that Emerson Junior High is remaining open. It is a vital school in West Davis and while there are upgrades needed to the campus, it is only the fifth oldest campus in the school district. The building itself has a number of desirable features that lead me to want to preserve it as a vital Junior High.

That said there are a number of aspects of this particular vote that I am uncomfortable with, even as I am pleased with the outcome.

First, the fact that it was not tied to additional cuts, means that there remains more work to be done. The district has to meet a threshold in order to meet its budgetary requirements or it risks the county taking over its operations.

Second, I think Gina Daleiden's concern is quickly dismissed with regards to the cut of teachers and programs. Something has to be sacrificed in order to keep Emerson open and that might be more teachers or more programs. I hope we can find creative ways to do this, but if we do not, we need to recognize what this means for teachers and programs in the district.

Third, and this is probably my biggest concern--Richard Harris and Susan Lovenburg were two of the strongest proponents of closing Valley Oak and denying the charter. The stated reason was fiscal cost. Now, they have been the ringleaders to keep Emerson open which presents its own problems with fiscal cost. That does not sit well with me. To use the phrase of some on the board, this has become a sacred cow to these board members.

At least Sheila Allen was consistent on this issue--she voted to keep them all open. I would agree with her on both issues. Gina Daleiden and Tim Taylor were consistent as well, opting for fiscal prudence on both issues. While I disagree with them, I can respect their decisions.

However, I really need to understand the decision that Susan Lovenburg and Richard Harris made--the differentiation that they took. Does that differentiation amount to a rationalization or is there an actual tangible and clear reason that distinguishes the closing of Valley Oak from the maintenance of Emerson.

All of that said, keeping Emerson open is the right thing to do. The other choices were not good educational choices for the students involved. They required creating an overly crowded Davis High Campus, they required moving DaVinci students away from their logical location, and there was not a compelling demographic or attendance issue to necessitate this move. In short, the move was only made for the purposes of saving money. At this time that might be reason enough, but I still think you need to bear in mind educational considerations. I am not opposed to a 9-12 high school--I attended one myself. There are strong reasons to do it which is why the majority of the state has 9-12 high schools. However, there are also reasons not to do it, it keeps 9th graders in a better situation socially.

However, removing this option from the table now forces the district to look at other areas for cuts.

Everyone applauds the efforts of the Davis Schools Foundation. I am big supporter as well. They have raised $250,000 for the district which is wonderful, but it is less than one-tenth of the way to their goal and I just do not see them at this point getting anywhere near that goal.

I do not say this to bring people down, but we also must face reality. Parcel tax relief will not come until 2009. The Davis Schools Foundation is only going to help offset some of the worst cuts. The state may provide some relief but that will also come after the budget for next year is set in stone. The long and the short of it, is that we have dodged another school closure, but we are going to have to brace for a major hit, there is no way around it.

Finally, the demographic forecast shows that we will stabilize after this year. That means that declining enrollment will not have an ongoing impact of forcing additional steep budget cuts. Those who believe the solution to this is more growth need to look at a lot more closely at faster growth and larger cities--these cities have no escaped the problems of the budget nor are their schools doing better than ours. We need solid land use and growth policies in this city, but those should not be based on school enrollment priorities. The voters in this city have made a choice to support their schools vastly with parcel tax money while choosing to grow their city closely. People who think we can have better with faster growth policies might want to also consider what would happen if those new residents vote to cut off the parcel tax. In short, be careful what you wish for and plan wisely.

In the end, we are all in this together--the amount of civic spirit I have seen from students, teachers, and parents is amazing. We need to learn from this however--the lesson is the cost of complacency. Just four months ago there was so little interest in the school elections and now schools are all that are on people's minds. We need to focus our attention on these issues when we are not facing severe cutbacks. We must remain attentive and aware so that these types of things do not sneak up on us in the future.

---Doug Paul Davis reporting

Hundreds of Students, Parents and Community Members March to Save Emerson Junior High

At Central Park yesterday, hundreds of students, parents, and community members marched throughout the park urging the Davis Joint Unified School District not to close Emerson Junior High School.

Carrying a wide variety of signs and bullhorns, the group first rallied at the park, then marched around the park twice, and finally marched from the park across the street to in front of the district offices.

At that point, most impressively, new Superintendent James Hammond addressed the crowd. He told them this was a most difficult decision that they would have to make and that they will consider it very carefully. While, it was not exactly what the large crowd wanted to hear, there was an appreciation that the Superintendent was not hiding in his offices.

Some of the concerns raised by community members were also captured in a letter from the school PTA to the school district.

There were expressed concerns about the risk of commuting by students to other portions of town. The increased crowding of junior highs back to what it was before Harper (although I believe part of the plan is to move 9th graders to high school, so the problem of overcrowding might occur on the high school campus). There are fears that once the school closes, it might now re-open again even if budgeting would allow it.

One of the big concerns is that there has been no taskforce or planning for the closure of the school.

Proponents of Emerson site Education Code 17387:

“It is the intent of the Legislature to have the community involved before decisions are made about school closure or the use of surplus space, thus avoiding community conflict and assuring building use that is compatible with the community’s needs and desires.”

Just as the education code requires a 7/11 commission to sell off surplus property, so would it seem to require some sort of task force before closing a school.

A number of DaVinci High students both joined in the protest and had their own brief demonstration asking for their teachers and programs to be saved.

COMMENTARY

A few points of commentary that I want to raise at this point.

I listened throughout to people talking about the fact that the seeds for this district's fiscal mismanagement were laid in the past and the public did not pay sufficient attention. I agree with that. However, I do not think the public really understands the depths of those problems that should be laid firmly at the feet of past school boards, past administrations, and past policies. At the same time, I also do not think the public truly understands the work that the most recent past school board did to fix many of these problems.

Unfortunately, despite those efforts as outlined on this blog in the series on the former CBO, the school district has not been able to escape this problem.

Discussions I have had with people close to state government emphasize that the expectation that we will have the economic problem alleviated by the Democratic Legislature may be less than expected. It is unlikely that the legislature would impose 10% cuts, but everyone believes that painful cuts will occur.

That puts the onus on local school district. The Davis Schools Foundation was working hard to get additional pledges for donations. The raising of these one-time monies could be vital to helping to lessen the pain of such cuts.

The school board as we suggested last weekend, should consider an emergency ballot measure for temporary funding relief. I discussed this possibility one of the board members on Saturday and it is something that they are considering. The problem is that the public seems so angry right now that they may not be amenable to yet another tax increase.

I spoke to Freddie Oakley and she told me that such a ballot measure if it were mail-in only, would only cost around $50,000.

Some have floated the idea of recall, but frankly that is the last thing this district needs. First, it would be punishing the students in the form of more payments by the school district. It would also distract the district from other means in which to deal with the revenue problem. Finally, for the most part it would punish those not responsible for the bulk of the budget problem. We can all point to decisions by the board we disagree with, but on the whole, the current board has done a decent job given the magnitude of the problem.

Those who wish to punish the kids for the mistakes that some adults have made, might want to reconsider that. If we all join together, we can probably save the schools and programs that we all like.

The final point I would like to make is that while this may be frustrating for all involved--and I remain a strong supporter of keeping Emerson open as well as the Valley Charter School--I was impressed with Superintendent James Hammond. I remember how former Superintendent David Murphy reacted to criticism and protests. There is little doubt in my mind that he would have hid in his offices, as so many government officials would have done, waiting for the protests to end.

But James Hammond had the courage to address the hostile but generally polite crowd and while he could not assuage their concerns, I think he gained their respect in the process. It would have been nice if Board Member Richard Harris had done likewise but at least he and Board President Sheila Allen attended the rally and can report back to their colleagues tomorrow night the community's concerns.

We all have a stake in the future of Davis schools and we all have to pull together to prevent things like cutbacks in teachers, school programs, and closures of schools.

---Doug Paul Davis reporting

Vanguard Investigation Part IV: Fiscal Crisis Management Assistance Team Findings

The Vanguard continues its multipart series of former DJUSD Deputy Superintendent Tahir Ahad, Total School Solutions, and fiscal mismanagement of the Davis Joint Unified Business Office during Tahir Ahad’s tenure from 1999 to 2006 as CBO of DJUSD.

The first segment of this series which ran on Sunday, February 24, 2008 examined the inherent problems involved in a conflict of interest. The conflict of interest we examined involved a series of disturbing findings of how Mr. Ahad used his position as Chief Business Officer (CBO) with the Davis Joint Unified School District as a means by which to start up his own private company for his own private gain. In short, he used public resources for private gain, a serious breach in the public trust.

The second portion of the series ran on March 3, 2008 and focused specifically upon the facilities planning and management beginning with the lost state matching funds for Montgomery Elementary, problems with Korematsu and eventually the King High debacle which led to the new school board finding out exactly what had been going on with the district’s facilities construction money. Basically money was shifted from later projects to make up for lost matching funds for Montgomery, lower than expected matching funds for Korematsu, and other cost overruns. Instead of acknowledging the depths of the problems, Mr. Ahad asked the school board in 2005 to pass a COP (Certificate of Participation), a form of debt financing, to pay for King High and some other projects. In 2006, the board learned that they only had half the money they needed to fund King High, and they realized that money had been shuffled, but only after an extensive investigation and the temporary halting of construction activities at King High.

The third segment which ran on March 10, 2008 continued to look at the facilities funding problems and other fiscal management issues. We examined the property exchange deal involving the Grande Property, which was a highly secretive and unusual process that we will argue violated a number of the California Education Code’s provisions for the sale of public surplus property. There were several primary problems with the property exchange for King High School. First, the process was conducted primarily in secret with a limited bid process. It required a property exchange to avoid possible efforts by the city to invoke the Naylor act. Finally, the process would have resulted in the district getting a low sale price for the property.

This final segment examines the report from consultant Terri Ryland and the Fiscal Crisis and Management Assistance Team (FCMAT) report. We have discussed both in previous weeks, but this time, we do so in more detail, looking at the problems with the district’s tracking and management of its facilities money and then efforts by the district—which were successful—to fix those problems.

Terri Ryland’s Report

We start this segment by returning to the problems with King High School that emerged on November 2, 2006 and resulted in the halting of construction on that project. Recall from the second segment of this series, that the school board was surprised to find out that the money that they had thought they had approved to pay for King High School in 2005 was not there. Now, the Superintendent, David Murphy, was asking for an additional $5 million in COP to fund the high school. The school board learned that they only had half of the money needed to finish the construction of King High.

As Board Member Gina Daleiden said during that meeting:

“We learned just a few minutes ago that more than fifty percent of the [king high] project is unpaid unless we make a decision about COPs. That is news to me… We need to look at the COPs that the previous board took out because I think they were for King High.”

Throughout this trying and at times contentious meeting, Superintendent Murphy was steadfast in his belief that the $10 million was still there... "I’m sure we have all the money that we think we have, but the documentation provided to the FCMAT team was deficient… I’m confident that not only do we have the money that we believe we have, but the documentation will show that.”

He explained that since we were short-staffed on the business services side, the top two positions were vacant, and that the facilities people were not people with fiscal expertise, and that this was the cause of the confusion.

It was at this point that Superintendent Murphy brought in Terri Ryland to examine the district’s books and figure out where the money that the school board believed should be there was.

As we learned two weeks ago, Superintendent Murphy was correct—the $10 million was there, it simply had been used to backfill payments for previous facilities projects and therefore unavailable to pay for King High.

As consultant Terri Ryland put it, “that wasn’t negative money, that was a shortfall in money that at one time we anticipated receiving.”

Part of the confusion on the board's part is that as Board Member Jim Provenza put it, we were “carrying the anticipated state revenue from Montgomery in our facilities plan as revenue available for projects.”

That money according to Terri Ryland was carried on the book until the end of the 2005-06 year. In other words, to the school board, it looked like money was there, that was not in fact there.

FCMAT Report

This problem among others were laid out more fully in the Fiscal Crisis and Management Assistance Team (FCMAT) report that was released on December 14, 2006.

After District Chief Budget Officer Tahir Ahad left the district in 2006, DJUSD hired an interim CBO Cathi Vogel. One of Ms. Vogel’s key recommendations to the Superintendent was to bring in the FCMAT team to examine the district and assess its conditions.

Part of the problem that came to light during the course of both the November 2, 2006 meeting and the December 7, 2006 meeting is that once Tahir Ahad left the district, there was literally no one in the district who understood the budget, where the documents were, and who could help piece together the district fiscal reports. This was a problem in and of itself.

As Board Member Provenza put it on December 7, 2006:

“We had an interim CBO, we had fiscal people here. That’s really what I’m going to. In my mind, correct me if I’m wrong, if someone leaves a district, the fiscal situation should be such that someone else could pick up the books, could look at the records and understand them and you wouldn’t have to pay someone for hundreds of hours of work to put it together. That you could have a system like that, that any CPA could go in and look at and understand.”

FCMAT not only came in to evaluate the district, but they came in to make recommendations on how to better run the fiscal office, so that these problems do not repeat themselves, so that next time someone leaves the district, it is easy for an individual to look at the books and figure out what money the district has. Instead, the district had to bring in Terri Ryland for hundreds of hours of billed work to literally reconstruct the books by hand.

One of things that encumbered the FCMAT team was the fact that “Both the prior Deputy Superintendent and the Director of Business Services cleared off their computer hard drives before departing the district.” FCMAT therefore recommended the enactment of policies and procedures for the retention of information on computer hard drives and notes, so that history can remain even when employees leave the district.

In their executive summary, FCMAT also notes that

“The organizational structure of the business division must clearly define and delineate the job responsibilities of managers, supervisors and employees… Although board policy exists, business office employees have not been evaluated annually. Some have not been evaluated for several years. A process needs to be implemented to ensure that employee performance evaluations are prepared regularly.”

While we have primarily focused this investigation on the Facilities projects and their mismanagement, there is a significant trail of mismanagement within the district offices themselves in terms of personnel. We discussed some of this briefly in the first segment. Interviews with past employees suggest that these structural designs were not accidental and not merely sloppy, but rather intentional features of the office designed to maximize control and loyalty to the former CBO, Tahir Ahad.

The FCMAT report goes on to discuss the fact that “business department staff do not currently receive cross training… Cross training helps departments perform effectively when an employee is absent, and enables employees to perform tasks outside their normal duties when necessary.” It goes on to note: “It appears that the previous CBO and director completed a lot of tasks and analyses on their own, and did not leave backup or information for future employees to follow and understand.”

This again seems to be an innocuous function of an individual’s management style, but it also leads the entire office to be dependent on a single individual in order to effectively function. That means that once that individual leaves the district, the ability to carry out previous functions virtually collapses. Indeed, FCMAT noted, “the district lacks written desk manuals, standard operating procedures or other specific reference documents in the business office.”

FCMAT then goes on to rate the district as having a “high fiscal health risk level. The areas of concern include cafeteria interfund borrowing, cafeteria encroachment, management information systems, retiree health benefits, leadership stability, district liability, and facilities.”

Most importantly—“no single report adequately tracks projects and the different types of funding used on each project for both past and current projects.” I shall talk more about this shortly.

Right now, it is very important to emphasize that all of the shortcomings that FCMAT put into place were addressed by the district in short order. In fact, by the time Montgomery came up before the State Allocations Board, the district informed the board that they had already implemented the recommendations of FCMAT. This will be discussed more at the end of this segment, but given the gravity of the current budget situation it is important to note that at the very least the district is on sound fiscal footing in terms of policies and procedures—however, this was not true in 2006 and that led to a high risk rating that was quite alarming to current school board members.

FCMAT looks at 18 categories of “Fiscal Indicators” and determined 7 categories were “not acceptable.” That put the district into the “high” risk category.

It is interesting to note that FCMAT rated the category, deficit spending, as acceptable. However, they also noted that “since FCMAT’s review, the district has given a 6.5% salary increase that will result in deficit spending of $1,030,758 in 2006-07.” This was not included in their projections and analysis and should be a note of concern that would carry-over to later budgetary issues. Unlike other fiscal practices, this one can be put on the current school board.

The first problem that FCMAT cited was interfund borrowing. On paper, FCMAT said that the district does not appear to have interfund borrowing. However, since the cafeteria fund had ended in a negative balance the previous four years,

“interfund borrowing should have occurred instead of ending the year with a negative cash balance. Because interfund borrowing is not occurring, there has been no awareness or discussion at the board level regarding the negative fund balance.”

Along the same lines, the district got a negative finding on encroachment. “The district needs to engage in interfund borrowing at year end to cover the negative fund balance, and address the issue of why this fund is continually in the red.”

Furthermore, the district was criticized because key fiscal reports were not readily available and understandable.

“The COE [County Office of Education] expressed concerns about how questions are answered on fiscal reports. The district provided backup as requested, but the COE often had additional questions or concerns based on the data provided, and felt that the reports did not answer the questions in many cases.”

The district scored poorly on retiree health benefits that were funded on a “pay-as-you-go basis” rather than having an actuarial study and a plan to fund the ongoing liability.

The district also go dinged because they had an interim CBO and therefore lacked stability in leadership.

An interesting point was made that the governing board of the district generally refrains from micromanaging.

“Comments were made that the board micromanages, but interviews and board agendas and minutes did not corroborate that. Board members have asked for additional budget information, such as budgets by department and history of past reductions versus what has been reestablished. These types of requests are common and reflect fiscal responsibility.”

The district liability was not acceptable either. The district had not done the proper legal analysis regarding potential lawsuits nor had it set up contingent liabilities for anticipated settlements and legal fees.

While some of these problems were serious, most of them appeared to be easily resolvable with good management from the administration and direction by the school board.

The most serious problem, not surprisingly for anyone who has read this series, is in the facilities area.

The biggest and most alarming finding is that “over the years, the district has transferred money between funds and it is difficult to ascertain which funds were used for which project.”

One of the biggest findings that both FCMAT and Terri Ryland pointed out is that the district used a single account for its facilities funds rather than creating a separate account for each new project. That meant that in addition to difficulty tracking the project as FCMAT pointed out, it also meant that it was easy to use monies that had been designated to pay for one project could easily be used to pay for previous projects—and the board would have difficulty tracking those payments and funds.

“The tracking reports are inadequate and appear to have been used throughout the program.”

Part of the problem was that the Chief Business Officer left in February of 2006.

“An interim CBO was hired but was told not to work on facilities accounting and funding, because the former CBO would do that. That apparently did not occur, and thus the area of facilities needs immediate attention… The previous CBO controlled all facilities planning and long-and short-term funding recommendations and decisions with no input from the Facilities Department since 2004, when the previous Facilities Director left.”

Furthermore, personnel was not the only problem the district faced on this.

“Even if adequate personnel were available to track projects, the tracking mechanisms used are inadequate and have been for the length of the program. A number of reports are used, but do not appear to reconcile with the district’s accounting system.

There also is no reporting mechanism to track past, current and future projects and their budgets in a master plan format so that the board, staff and public can readily see the expenditures of facilities funds over the duration of the program since approval of the Master Plan in 2000.”

FCMAT goes on to discuss the problems with Montgomery and Korematsu that were discussed in detail in the second segment of this report.

The problem of commingled funds may be explained away as sloppiness or even expediency on the part of the previous CBO. However, one point that needs to be made is that this is not an accidental policy but rather the result of specific board action early in Tahir Ahad’s term as CBO that allowed facilities project money to be placed in a single account rather than giving each project its own account that could be tracked over time by the board or the public.

Board President Sheila Allen found this the most alarming aspect of the FCMAT report’s findings.

“I think the most alarming thing about it was my concern about the specificity of the tracking of the dollars. If someone is in charge of tracking the money, I would hope that they would know exactly which dollars come in, into which pot, how exactly they were spent, and that is something that should be fairly easily tracked. I know it’s a very big organization and I absolutely know how complex school financing is, but that is my expectation of a finance department—is to know exactly how much comes in, how is it supposed to be spent, and how was it spent. "

A final problem that we have already discussed is the use of anticipated but not yet board approved moneys in line items as though the money were there and approved.

“In February 2004, staff prepared and presented a report detailing another revision to the Master Plan. The revisions included another $9.7 million in additional projects. In this report, no mention was made of the proposed funding sources for these projects.”

FCMAT then goes on to say:

“Because of the way the reports have been developed and presented to the board and community, it appears that all such projects have been planned. However, the funding sources are unclear because the board has not yet approved additional debt, such as COPs. Potential future revenue amounts are shown on the cash flow statements even though they have not been approved by the board, giving the impression that there is sufficient cash to proceed with the projects. The reports must be developed to distinguish between secured funding and potential funding to give the board greater certainty and understanding in their discussion of future facility projects.”

Board Vice President Gina Daleiden addressed this point when she spoke to the Vanguard in January 2008:

“There was also a problem with documents that went to the board and the public not clearly reflecting reality. When we adopted the FCMAT report, we made a motion… I made a motion seconded by Tim Taylor to direct the business staff to insure that speculative, not yet board approved financing is not reflected as available cash in cash flow documents and is instead clearly marked as possible options. The FCMAT report also says that that should happen.”

On page 95 of the FCMAT report they note $3 million was erroneously entered onto the line item of “projected redevelopment fund.”

“Since the issuance of FCMAT’s initial draft report, the district has disclosed that the $3 million was entered on the wrong line and instead should have reflected a new COP issuance, with a second $3 million to be requested in 2007. Since neither amount had been approved by the board, it is not appropriate to reflect that as cash flow unless clearly noted as potential cash. The current practice of listing the amounts without such a notation must be discontinued. The district should insure that all revenue projections are realistic and based on likely funding.”

According to Board Vice President Gina Daleiden, the board took the findings very seriously.

“Because that was such a concern when the board adopted the FCMAT report, the board made a series of motions adopting a lot of the recommendations from the from the FCMAT report that was done very deliberately so we could say we take this very seriously and make sure that our practices become best practices. Now in terms of what key changes were most vital to make, you can find that online in Bruce’s response to the FCMAT report, our new CBO. And I would cite these changes as well as… so here’s some of the changes… Some of the changes are new fiscal team has implemented, stronger financial controls, clear separation of authority within the accounting staff, and more accountability in staffing decisions. We have hired a director of facilities who will save us money by bringing professional oversight to our facilities budgets, maintenance and projects. We have instituted more regular reporting to the board on budgeting items. One of the things that it says in the FCMAT, that it notices in the past that the interim budget reports were put on consent without discussion and those are always on our regular agenda now so that the board can consciously talk about any adjustments to the budget and track how budget expenditures are meshing. [refers to PowerPoint on website that shows Colby’s changes to the FCMAT report]. I’m confident that our new CBO is implementing the FCMAT report. And it was very clear that that was one of the board’s top priorities for our interim superintendent. To make sure that the FCMAT report was being implemented.”

Board President Sheila Allen:

“To my knowledge we have either already implemented the recommendations or there are plans in place to do the recommendations. The key changes that they wanted in place were two things, is that they were talking about a coding system—that’s the standard practices. And the other thing is that you need a permanent head person and fiscal manager and we have both of those now.”

Some have defended past fiscal practices of the district on a number of fronts. The first point of course is that no money has been lost or misspent by the district.

Even strong critics of the previous regime agree on this point.

Board Vice President, Gina Daleiden:

“I do want to be clear that the money was spent on district buildings. So it wasn’t taken away or put into something that had nothing to do with the school district. They were spent on our buildings just no one realized the way in which it was being spent”

Board President Sheila Allen was very adamant that there was no lost money.

“The FCMAT report, and to my knowledge there was no lost money, there was no money that was illegally spent, but it was very difficult for someone to come in and be able to track exactly—here’s the money coming in, here’s how it was spent. And that’s concerning because these are taxpayer dollars. So we want to make sure that we know how much money we have, how it was spent, and that it was spent in the right category.

The good news about FCMAT is that it gave us some very clear guidance from professionals of where we need to go to do better. Although there was alarming information in there, the important thing to me was very help that rather than someone to say to me it’s a mess, or we don’t know exactly where the money’s been going, what was important to me is that they said here’s what you can do, you can do this… And also it was very important for me to know, and I’m sure I said this at public meetings, there’s no lost money. Nothing illegal has happened.

All of the experts, both ours and their’s were able to say, there’s no lost money, there was nothing illegal happened. That was very important to me that was very clear to me… I’ve been looking around for a better word than sloppy bookkeeping. It wasn’t very precise. So we put into place a more precise approach to bookkeeping and there’s all new people over there. So that’s the really good news is that we have people that we can trust—their numbers, we can trust that they’ll get us the information straight up…”

The Vanguard agrees with that assessment, but would argue that it is less than clear that this the end of the story. While in the true sense of the word, money was not lost, the poor fiscal practices of the district monopolized board and staff time that could have been spent better in other areas. Moreover, it is far from clear that these practices did not cost the district money both in terms of inefficiency of operation but also in terms of the time and money needed to get a straight accounting from both FCMAT and Terri Ryland. That in a very real way is lost money.

A second point was made to me that the FCMAT rating of “high risk” was misleading. The district got good marks on position control for the most part, which is the means of tracking and projecting employee salary and benefits. “A reliable position control system establishes authorized positions by site or department and ensures that staffing levels conform to district formulas and standards, thus preventing overstaffing.”

They go on to point out that a number of the deficiencies were minor and easily correctable, and that given four of those factors, that would place the district in low risk rather than high risk. On the other hand, one might wonder if some of the past practices of the district have not caught up with them in the current budget crisis.

Board Vice President Gina Daleiden was asked about the rating system.

“As with any standardized numbers, the numbers are not the whole story. So whether or not one question was weighted more than another, whether or not our score was a nine instead of a nine and a half, and I’m making that number up, the numerical value doesn’t matter to me, as much as the substance of the report. I am a trustee of this district, when I look at a document that says to me here are some issues with how the district’s finances are being run, we need to take those seriously, that’s the only way to get better. You have to look at things that can be improved and work on improving them. Some of the findings in this report—the responsible thing to do is to pay attention to them. To fix them. And it doesn’t really much matter to me whether it’s a high risk, medium risk, it’s not a grade on a paper and it’s not points in a pageant. This is about the practices of the district. And wanting to insure that they’re not only adequate but they’re really good. We have a great school district, and we need to have great fiscal practices so that we can support all of our programs and do the best for our kids. And it’s public money so we have to be careful in how we expended it.”

Both Sheila Allen and Gina Daleiden agree that things have changed.

Board Vice President Gina Daleiden wants to the public to know that “Past practices are in the past.” We have according to her new safeguards in place. We have new conflict of interest codes that will protect us from future problems with employees working in outside consulting firms, we have implemented the recommendations of the FCMAT report, the district reports to the board on a regular basis with easy to understand and clear budget updates. She expressed confidence both in the new CBO Bruce Colby and the new Superintendent James Hammond. And the board along with Bruce Colby has enacted a series of careful fiscal procedures so that it is easy to track monies as they go to and from projects.

Board President Sheila Allen likewise, declares it a “new day.”

“I really am not interested in having the district dragged through the mud further when these are things that have already happened. I’m totally fine with people knowing what happened that’s fine with me, but I want the headline and I want the last part of it to be here’s how it’s changed. It’s a new day. We have a new superintendent; we have an all-new budget office. We have this accounting information put into place. The board since I’ve been on it, has a very strong commitment to open government, no more closed door discussion about district information.”

Summary

My concluding remarks for this four-part series basically echoes the comment made by Board President Sheila Allen. I think the public can look at these problems and better understand in part why we are facing some of the budget problems that we are facing. However, I also think we must understand that the then new school board which came into office in December 2005 with newly elected members Sheila Allen, Gina Daleiden and Tim Taylor, joined with Jim Provenza in providing the leadership that has over the last two years taken deliberate and concrete steps to put the district on better fiscal ground. It was these school board members who led the fight to clean up the fiscal house of the district and in many cases uncovered past business practices condoned by previous school boards that have plagued the district for years.

There is better tracking, better oversight, and a new fiscal team. What is unfortunate is that the budgetary bottom has fallen out of the district at a time when in terms of policies and procedures, the district has never been stronger.

Nevertheless, I think there is a good amount of important information that has been gleaned out of this investigation in terms of the way that the business office was run, the way in which monies were handled, and most importantly the need for all districts to enact strong conflict of interest policies in order to better protect themselves from employees and companies that are seeking to profit on public money.

---Doug Paul Davis reporting