School board members discuss financial future of Oakland schools

Budgetary issues loomed large at Wednesday night’s Oakland Unified School District (OUSD) board meeting, as oversight officials outlined a plan to determine whether the district should qualify for deficit relief funding from California’s state budget under Assembly Bill 1840 and OUSD finance officials presented an update of the district’s budget for this year.

OUSD officials have been working to improve the district’s financial stability since last year when California’s Fiscal Crisis and Management Assistance Team (FCMAT), an independent state-wide agency that advises financially struggling school districts, identified financial weaknesses in the district. Under AB 1840, state funds will cover a portion of the district’s operating deficit over the next three years, if district officials can show that they are taking the necessary steps to bring the budget under control.

“You are in trouble today, and therefore you must resolve this tomorrow,” said FCMAT’s CEO Michael Fine. Fine appeared before the board along with officials from the California Department of Education and Karen Monroe, the Alameda County Office of Education (ACOE) superintendent, to urge the board to take their fiscal stability seriously if they hope to receive AB 1840 relief funding.

Monroe brought an infographic her team made outlining the process by which AB 1840 relief funds could be given. First, Monroe’s office and FCMAT will set benchmarks based on the district’s plans to close its projected deficit. On March 1, the two will create a report determining the district’s projected operating deficit and specifying what progress they expect the OUSD to make in meeting their benchmarks. Based on that report, the state legislature and governor will determine how much state funding will be appropriated to Oakland schools if they meet their goals. Then ACOE, FCMAT, and State Trustee Christopher Learned will monitor the district’s progress, and the state will allocate relief funding to the district in September if the district’s unaudited actual expenses show sufficient progress.

Fine stressed how important it is that the district meet financial goals. “You’ve made a very public commitment to a set of reductions that total around $30 million. That’s the first benchmark,” Fine said, referring to an August school board resolution to implement $30 million in budget cuts starting in the 2019-2020 school year. “If you stop at 15, you will not achieve the benchmark. I don’t know how clearer to say that to you.”

If FCMAT’s analysts find that the OUSD does not do a sufficient job of meeting its benchmarks, they will recommend against the state providing the AB 1840 assistance funds, which could result in the district requiring a loan from the state and entering state receivership like it did in 2003. But since the AB 1840 funds are set as a percentage of the district’s operating deficit, if the district outperforms its benchmarks and ends the year with an operating surplus—as it did last year—it might not receive any AB 1840 funding, either.

“If they have another year with the surplus and therefore didn’t have a deficit, then they likely wouldn’t receive any of the funds,” Fine said in an interview with Oakland North on Thursday morning. “Just because they have a single year excess, though, doesn’t mean their multi-year financial system changes dramatically.”

While Monroe and Fine emphasized that they were there to support Oakland schools, some board members pushed back. “There are times where the elected board of the county office of education makes decisions that go against decisions that our board has made that we believe are in our best financial interest,” Director Jody London (District 1) said to Monroe, whose county school board has overturned OUSD decisions to reject charter school petitions. When charter schools enroll students who would otherwise attend public schools, they receive state funding that would otherwise go to the district. Public school advocates see this as a factor in the district’s current budgetary distress.

Some meeting attendees saw the pressure for the OUSD to make cuts as unfair stress on public schools without equivalent scrutiny toward charter schools. “Where this is heading is a decrease in public schools. They’re going to be required to downsize and the charter schools aren’t required to do anything,” said Mona Lisa Trevino, a Montera Middle School parent, sitting in her seat during the FCMAT presentation. Trevino, along with other community members, lined up to express their concerns, but Fine and the state officials shuffled toward the door before listening to public comments.

In a phone interview on Thursday morning, Fine said he needed to catch a flight on Wednesday night, and that he would watch a video of the public comment session soon. But he contested the idea that charter schools are an important factor in the district’s financial struggles. “I get that they’re upset, but I have to tell you, charters or not, that district cannot sustain itself economically with a bunch of little tiny schools, neighborhood schools,” Fine said, referring to Oakland’s small schools movement, which led to the district having significantly more schools than districts with similar numbers of students.

Later in the evening, OUSD Chief Finance Officer Ofelia Roxas presented an update on a revised budget for the district as of October 15, emphasizing the changes to the unrestricted ending fund balance, which was now projected to be $6.7 million higher than when last tallied. She also showed the carryover from last year in restricted funds, which resulted in a balance projected to be $21 million lower than when last tallied.

The budget’s revisions also showed a $61 million increase in expenditures from the budget the district adopted on June 27. Roxas said that the increased expenditures mostly reflect district accounting attempts to spend restricted funds carried over from last year, so the district could receive these funds in the future. “If we don’t spend, we don’t earn it,” said Roxas.

Finally, as the clock neared midnight, when only seven people were left in the audience, Directors London and Nina Senn (District 4) proposed an amendment to the board bylaws that would affect when members of the public would be allowed to speak.

“The whole goal of this is to bring more voices into the conversation,” London said. “The main difference would be that rather than having public comment on every item that we vote on during the agenda, that would all happen before we start to consider, discuss, and vote on the items that are before us.”

The board currently allows public comment on each agenda item individually, including the Pledge of Allegiance at the beginning of the meeting. A few members of the public appear at each meeting to comment on most items. For example, Oakland resident Jim Mordecai complains after each recitation of the Pledge of Allegiance that the phrase “under God” excludes citizens who don’t believe in God.

The few remaining attendees expressed concern about the potential changes to the bylaws. “I just think that it’s really outrageous to be limiting public comment at a time when the public doesn’t trust what you say and what you do,” said Kim Davis, a Montera Middle School parent.

London and Senn’s proposal will be debated at future meetings, but Director Shanti Gonzales (District 6) did suggest one addition to the proposal that might please at least one public commenter—removing the Pledge of the Allegiance from the agenda. “I don’t think we’re required to do that. I think it’s a waste of time,” Gonzales said. (Jim Mordecai had left the meeting earlier in the evening.)

In other business, Tara Gard and Sarah Glasband from OUSD’s Talent Division reviewed newly-public data from a survey on teacher retention. The survey examined factors like overwork, high rent and school culture that encourage teachers to leave the district. The survey showed that teachers who chose to leave said that the most important factors for them were school culture, wanting a sense of ownership over their work, and a sense of feeling valued, trusted and respected.

The next OUSD board meeting will be on November 7.