Monday, February 28, 2011

MDUSD Budget Situation- Update #2 - (2/28/11)


This is the second part of a two part budget update.  
Part one was posted on this blog 3 weeks ago, and can be read here from 2/8/11.
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Mt. Diablo USD News Update
Where Kids Come First

Governor’s Budget Proposal and Impact on MDUSD

The information for this News Update was gathered from:

  1. A budget presentation made by State Senator Mark DeSaulnier and State Treasurer Bill Lockyer on Wednesday, February 23, 2011.
  2. A February 7, 2011, article by the Legislative Analysis Office entitled Update on School District Finance in California.  The article can be found at: http://www.lao.ca.gov/analysis/2011/education/ed_survey_two_020711.aspx .
  3. California County Superintendents Educational Services Association’s (CCSESA) paper entitled:  Basic District Fiscal Oversight Common Message Background and Advice to County Office of Education CBOs 2010-11 Second Interim Report and Related MYPS, February 9, 2011.  This paper is posted on our website at: http://www.mdusd.org/Departments/Fiscal/Documents/Website%20-CommonMessage020911%20BASC%20CCSESA-02-25-11.pdf .
  4. A memo from Bill Clark, Associate Superintendent, Business Services Contra Costa County Office of Education outlining the Second Interim Guidance 2010-11.  The memo is posted on our website at:  http://www.mdusd.org/Departments/Fiscal/Documents/Website%20081%20Second%20Interim%20Guidance-02-25-11.pdf .

According to the above-referenced CCSESA paper:
Governor Brown has acknowledged that education has been the only major program that has taken disproportionate budget reductions since 2007-08. Therefore, he committed to protect education by proposing flat funding for education for 2011-12. However, flat funding really results in about a $19 annual per pupil reduction.
The 2011-12 Governor’s Proposed Budget was submitted with an estimated 18-month budget shortfall of $25.4 billion, comprised of an $8.2 billion shortfall in 2010-11 and a $17.2 billion shortfall in 2011-12. The Governor’s proposal addresses the shortfall in three ways: (1) reducing expenditures by $12.5 billion over two years (2010-11 and 2011-12); (2) enhancing revenue by $12 billion over the same two-year period to be achieved through a June ballot measure to extend the temporary taxes enacted in 2009-10 by five years (.25 percent surcharge on income tax, 1 percent increase in the sales tax, .5 percent increase in the vehicle license fee); and (3) borrowing $1.9 billion from special funds and other one-time measures.
The success of this proposal largely depends on a two thirds bipartisan legislative approval to place the tax extension measure on the ballot and then on a majority of the voters approving the tax extension. Additionally, the Legislature would have to agree to expenditure reductions similar to ones that they have rejected in prior years. Part of the Governor’s strategy is a proposal to realign or to shift responsibility of many programs along with the revenue sources to local governments. This shift would include using one-time Proposition 63 funds of $861 million to fund community mental health services. Clearly, there are many challenges ahead for the Governor and the Legislature to balance this budget.
If all of the Governor’s strategies are enacted, then the total K-14 Proposition 98 funding would be $49.3 billion, slightly less than the 2010-11 level of $49.7 billion.  This would amount to a reduction of approximately $600,000 for our District. 
Another major impact for education in the Governor’s proposal is the deferral of several apportionments.  School districts are not paid in one lump sum at the beginning of the year.  We receive incremental payments (apportionments) throughout the fiscal year from July through June.  In the Budget Proposal, the Governor recommends delaying our payments for April, May, and June until July 2011, which is in the next fiscal year, and then delaying the July 2011 payment until July 2012, again another fiscal year.  In essence, this will delay $25 million in payments from this school year by 12-15 months to the beginning of the 2012-13 fiscal year.  Basically, the State is taking their cash flow crisis and making the school districts deal with it by deferring our payments.

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

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

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


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

  1. Work to ensure that the Legislature approves placing the tax extensions on a June ballot.
  2. Work to ensure that all community members thoroughly understand the negative implications for our children’s education if the tax extensions do not occur.
  3. Work to ensure that every parent with a child in the Mt. Diablo Unified School District participates in the democratic process that we hope will occur in June.

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

12 comments:

  1. Without a Strategic Plan, MDUSD is hiking in the wilderness without a compass. Over a year ago, I called upon the Board to start studying school closures and they refused. We saw in the last few weeks what chaos looks like as they tried to shoot from the hip without sufficient time. Now, its even worse. How many more months before we get the Strategic Plan on track ?

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  2. Tired MDUSD Mom of 3March 3, 2011 at 9:14 AM

    They have their first meeting on 4/26 to begin the process of a strategic plan. If you remember the BOE felt it best to wait for the new BOE to begin this process.

    In the meantime the district has been advised by the County to plan on more cuts, to the tune of another $25 million to up to $48 million. Right now funding per student is below what was received in 04/05 and as we all know, costs have increased from power to medical to just having supplies and gas.

    All I know is if my budget was cut this drastically we would have to sell our home, move into a small apartment and not have any extras.

    So is this what you want for our students and our future? I joked that we need to have our kids all become prison guards since they have outstanding benefits, higher pay than highly educated teachers and the way our State is going a higher population in the prisons. Especially because many in this community put no value on education and do nothing but blame, blame and more blame.

    I attend meetings and I do not see shooting from the hip Doctor J. But what I do see is one very negative person (you) who should be celebrating the successes. This BOE will get a strategic plan in place but right now just where do you want this $25 million to come from?

    Take your anger Doctor J to the State, hold them accountable that they would fund prisons above educating our youth.

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  3. @Tired Remember it was Jerry Brown in his first governship that empowered the Prision Guard union to become the most powerful union in the state -- even more powerful than the teacher's union. They have job security they have empowered -- Three Strikes and long prision sentences for all crimes. If your logic is correct, you would want to let out half the prisioners back to your neighborhood. Enjoy.

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  4. @Tired MDUSD Mom of 3: You don't understand what a good Strategic Plan is. I suggest you read Cheryl Hansen's webposting: http://www.cherylhansenmdusd.com
    A good Strategic Plan transcends leadership changes -- delay has been counter productive since Gary and Sherry endorsed Strategic Planning 3 years ago and never followed up. Every decision of the board should be measured against the SP. The County wants Boards to look at the worst case scenario. There is shooting from the hip -- guess you didn't see Gary making wild closing proposals in the middle of meetings. If you really valued education in MDUSD you would have embraced my ideas of cutting the salaries of Supt and Asst Supt's by 20%, Directors by 15%, reversing the Gang of Five raises, and the other recommendations I made. Respond to each one unless you have a better idea. And what did you think of Kirk Berger's recommendations for the Board and the Supt ? Please don't talk in generalities -- talk in specifics.
    Doctor J

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  5. Tired Mom,
    I understand your frustration and your desire to blame it all on the State but the issue is larger than that. We have a lack of leadership and that lack of leadership causes doubt and anger amongst many of us concerned about the education of our children.

    The difference between a manager and a leader-
    • The manager administers; the leader innovates.
    • The manager is a copy; the leader is an original.
    • The manager maintains; the leader develops.
    • The manager focuses on systems and structure; the leader focuses on people.
    • The manager relies on control; the leader inspires trust.
    • The manager accepts reality; the leader investigates it.
    • The manager has a short-range view; the leader has a long-range perspective.
    • The manager asks how and when; the leader asks what and why.
    • The manager has his or her eye always on the bottom line; the leader has his or her eye on the horizon.
    • The manager imitates; the leader originates.
    • The manager accepts the status quo; the leader challenges it.
    • The manager is the classic good soldier; the leader is his or her own person.
    • The manager does things right; the leader does the right thing.

    Warren Bennis – “On becoming a Leader”

    Have we seen innovation in this District? Does our “leadership” focus on the people (children/teachers/staff) or does it seem that are they busy defending their decisions and blaming the State? Have we been inspired to trust? Does our “leadership” take on new ideas and innovation in spite of the budget or is this budget their only reality? Long-range perspective is strategic planning. Cheryl Hansen has certainly taken a lot of unfair heat for asking what and why. Where is our horizon, having a horizon inspires people to have hope. We should hold our “leaders” to a standard that requires them to challenge the status quo.

    WHERE ARE OUR LEADERS?

    Don’t be angry with Dr. J or the rest of us who are uninspired by the leadership in this District. Don’t blame us when we are angry or negative. Don’t ask us to celebrate successes when we see so much failure. And don’t ask us to blame it all on Sacramento. We have not been led, inspired, or given reason to be trustful. Dr J you are right to continue to ask for more.

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  6. Dr. J,
    Most great plans aren't. They are just nice, high-level ideas." Most strategic plans do not 'TRANSCEND LEADERSHIP" In fact most strategic pans wind up not being "strategic" or "plans". Calling something a strategic plan doesn't make it one." You might want to read this document by Dr. Hayes on the Predictable Failure of Strategic Plans. http://doiop.com/The-Predictable-Failure-Of-Strategic-Plans
    As far as cutting superintendents salaries by 20%, how much are you cutting yours? Its pretty easy to cut someone else's paycheck.
    What say you?

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  7. @MadmdusdTeacher -- Still chuckling that we have a "mad teacher" instead of "angry". I guess it reflects on the quality of the education. Read Cheryl Hansen's discussion of Strategic Plans: www.cherylhansenmdusd.com
    Your first line is a quote from someone else -- there is lots of criticism of Hayes. The blame is not placed on the failure to properly follow the correct developement of the Strategic Plan. Properly done, Strategic Plans will be successful, but they require the right leadership. Obviously two Board members who for three years have advocated it and not implimented it need to have a Damascus. And Lawrence who has been openly hostile to the concept of Strategic Plans -- mostly because it is a lot of work to produce and a lot of work to manage -- you know he can't even get the last two power points done on time. Just saying.
    Doctor J

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  8. Excuse the typo: It should read:
    The blame is not placed on the concept of the Strategic Plan but the failure to properly follow the correct developement of the Strategic Plan.
    Doctor J

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  9. Whereas I feel a strategic plan would be a great addition, I would like to know where the cost for creating it comes from. Last I heard strategic planning for our district could be around $50,000.

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  10. It would be the most productive money spent. If corporate money could not be obtained to fund all or part of it, there is District SIG money that might fund part of it. Remember that we just spent $70,000 plus on a consultant to close two schools -- and that's still up in the air. Plus SASS just spent $183,000 on two consultants. The 20% cut of the Supt salary alone would pay for it. Or the reversal of the Gang of Five salaries. Finding $50,000 has never been a problem for Lawrence. Oh, remember when Lawrence said his reorganization of C&I into SASS saved $50,000, lets use that $50k. It was nice to read on Theresa's Education blog that she asked Secretary Duncan about SP's and he endorsed them.
    Doctor J

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  11. I'm not sure that I share all of the enthusiasm for a strategic plan. Obviously, it always makes sense to plan how you intend to reach a goal. But I also think of what a boss of mine used to say: "Be sure to think before you plan." By that I think he meant, "Know who you are, what you stand for, and what your over-arching goals are, before you decide how to achieve them."

    I don't see much evidence of that sort of thinking at MDUSD. If your big goals are confused, or just plain wrong, then a plan simply helps you fail faster. I would like to see this district's leadership articulate what really matters to them, and then make sure that they, and their constituents, are really aligned on those values.

    For example, in my view, if you see things as a pyramid of priorities, the pinnacle of the pyramid should be "Achievement for All Students", and by that I do mean ALL -- not just the struggling students whom they are usually referring to when they talk about "All" students. Struggling students deserve our focus and energy, but so do the more successful students. Every student deserves a school that makes him or her a priority.

    Under those students on the pyramid are the parents and teachers. They are on the front lines, supporting students every day. They should be treated as EQUAL supporting partners who deserve respect and who have specific responsibilities to students and to each other. What are those specific responsibilities to our students and to each other? Let's define them based on what we believe, and then have a plan that supports teachers and parents in carrying out their responsibilities.

    Finally, at the bottom of the pyramid -- supporting ALL of the stakeholders above -- is the district administration. Their PRIMARY responsibility and the focus of their work should be to ENABLE teachers and parents to successfully support students. Imagine a district totally focused on what teachers and parents need to help students be successful!

    This "pyramid" may sound overly simplistic, but I get the feeling so often from MDUSD that their world view is not at all like mine. In fact, their "pyramid" seems to be reversed, with the administration on top, and the students on the bottom (and with parents out of the picture entirely). Many of their policies and actions seem to reflect the view that the administration's habits, priorities, and well-being are paramount. And if that's really how they see the world, then I don't care if they ever have a strategic plan. Because they're not headed in any direction that I care to travel.

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  12. Jim,
    I like your outline and agree that the current system appears to parents (and students) to be completely opposite from your example of how priorities should be aligned. Whether the District believes that to be true or not is moot.

    I am a fan of strategic planning and I would suggest that determining the District vision is the first step in the strategic planning process. The vision has to be the compass for setting goals and making decisions. The plan is simply the map once your direction is clear.

    My concern with strategic planning and determining a vision is if you do not have leadership that can champion the vision or believe in the need to begin with... the process will fail. Right now I think that is where we are as a District. I hope I am wrong.

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