The Sacramento City Unified School District is facing a budget deficit. Costs are expected to exceed budget in future years. As has been reported widely in the news, rising health care premiums and pension costs to California schools are a significant factor in the district’s increased costs. The district also is facing a large debt obligation for other post employment benefits (OPEB). While the district has, and will continue to, invest the bulk of its budget on competitive salaries and benefits for teachers, we face significant fiscal challenges.