Answers To Frequently Asked Questions About The Budget
Please click on an item below to see the full response to each FAQ.
What is the current status of the District’s budget situation?
At Third Interim (May 16, 2019) the District is still deficit spending and projected to run out of cash around October 2020. If the District cannot achieve significant cost savings in the next few months to eliminate its deficit spending problem, it will need a state loan (i.e. state takeover) by October 2020. The District is now pursuing labor negotiations with all five of its bargaining units–Sacramento City Teachers Association (SCTA), Service Employees International Union Local 1021 (SEIU 1021), United Professional Educators (UPE), Teamsters Local 150 and Classified Supervisors. Four of five labor partners have commenced negotiations with the District. The District continues inviting SCTA’s leaders to commence negotiations.
Where did the District find the money to avoid a state takeover for an additional year?
The District did not just “find the money”, it made painful cuts to reduce current and future year spending to buy more time. Specifically, the Board of Education adopted almost $29 million in cuts and cost savings which included employee layoffs, reductions to programs, and other actions that were necessary to temporarily stave off a takeover until long-term cost savings can be achieved through labor negotiations. However, the District’s financial problems have not been solved and the cuts made so far are not sufficient to maintain fiscal solvency. The District is still relying on using $19.67 million of its remaining reserves to get through the next fiscal year while it works to achieve long-term cost savings through labor negotiations. If more cost-savings cannot be achieved in the coming months through labor negotiations, the District will not be able to financially sustain itself and will eventually run out of cash and be faced with state takeover. The chart below (in millions) shows when cash will run out according to Third Interim projections in a status quo scenario, versus a 4% reserve scenario.
What is the District’s plan to save our schools from a takeover?
To avoid a takeover, the District needs to close a $34 million structural budget deficit. A critical component of the District’s plan to balance the budget and sustain itself long-term is to achieve employee health insurance cost savings. Sac City Unified is the only district in the region that offers health plans costing up to $35,000 per employee. Currently, labor partners representing our custodians, bus drivers, cafeteria and maintenance workers, and principals have initiated contract negotiations with a commitment toward making shared sacrifices to prioritize the needs of students and save our schools from a takeover. We will continue to invite leaders from the Sacramento City Teachers Association to begin contract negotiations before we run out of time.
Working with labor partners and employees to reduce spending is the District’s preferred plan. According to a December 2018 fiscal health risk analysis report from the state’s Fiscal Crisis Management and Assistance Team (FCMAT), the District is spending 91 cents of every unrestricted dollar on benefits and salaries. This amount exceeds the state average for unified school districts and is unsustainable. According to the FCMAT report: “The statewide average for unified school districts as of 2016-17 (the latest data available) is 84.63%. At 2018-19 first interim, the district is exceeding the statewide average by 6.37%.” Click here to access the full FCMAT report and scroll to page 17 for the reference about Sac City Unified’s high average for benefits and salary combined.
If the District and its bargaining partners cannot achieve the savings necessary to balance the budget, then the District will have to find other alternatives which would include cuts to programs and services that our students and families depend on.
If the District can save a lot of money on health costs, why has the District not implemented a health savings agreement with the Sacramento City Teachers Association (SCTA)?
Achieving health savings has been a high priority for the District for many years. Health savings cannot be achieved until the District and SCTA reach agreement. We will continue to invite leaders from the Sacramento City Teachers Association to begin contract negotiations.
Why does the District not communicate directly to employees about its cost savings plans, and other questions related to employee health benefits?
Labor laws require the District to communicate with the union representatives of our employees and prevent District administrators and management from communicating or “direct dealing” with represented employees on issues related to wages, working conditions and other issues. Labor unions representing various employee groups do not have these same restrictions on communications with employees and can communicate freely about these matters to employees in their bargaining unit.
Has the district’s number of full-time administrators grown from 190 employees in 2014-15 to 271 employees in 2017-18 and would the SCTA proposal to cut administration actually save $16 million? (Updated 10-11-18 in response to SCTA)
No. This statement is factually incorrect and the district has requested that the Sacramento City Teachers Association refrain from using the incorrect figures in their communications because the 190 number was taken from a criteria and standards report which was not filled out accurately. Below are the accurate numbers related to the district’s reported general administration costs reflected in the district’s end-of-year actual reports submitted to the Sacramento County Office of Education and the California Department of Education:
- In 2014-15, the district actually reported employing 232.2 administrative full-time employees (FTEs).
- In 2017-18 the district actually reported employing 267 administrative full-time employees (FTEs).
- Four (4) of these positions were vacated and left unfilled at the end of FY2017-18 in compliance with the hiring freeze adopted by the Board of Education, leaving the district with a total of 263 administrative full-time employees to start this fiscal year.
As of June 30, 2018, Sac City Unified administrators, both at the site level and district office, constitute approximately 4.4 percent of budget expenditures and are focused on student achievement and providing critical support services to all of our school sites. To help the community understand the roles of our 263 administrators, here is a breakdown of who these employees are and what roles they perform for our students:
- Almost half, 49% (129) of the 263 administrative positions, are held by Principals, Assistant Principals, Site Instructional Coordinators, Student Support Services Coordinators, and other positions directly serving students on school sites. Click here to view a listing of all job titles and salaries for these FTEs.
- Roughly 10% (26) of the administrative positions are not paid for with unrestricted general fund dollars because they are covered through grant funding, bonds, reimbursements or other funding sources. Eliminating these positions would not result in any cost savings since they are not paid for with general fund dollars. Examples of these positions include, among others:
- Our Director and Supervisor of Special Education Services, responsible for overseeing the delivery of services to students with special needs;
- Our Coordinator for Induction Programs serving first-year teachers;
- Our Director of Student Support and Health Services overseeing school nurses and the delivery of health-related services at school sites;
- Our Director and Coordinators of Multilingual Literacy Services and;
- Our Attendance Campaign Coordinators which are focused on increasing student attendance and generating more revenue for the district.
- Roughly 7% (18) of the administrative positions are responsible for ensuring the district complies with various state and federal laws and other requirements including:
- Education Code;
- Local Control and Accountability Plan (LCAP) and Local Control Funding Formula (LCFF);
- School Safety compliance;
- Student data and online privacy and safety;
- Employee Payroll;
- Translation Services;
- Bullying Prevention;
- Student Enrollment and;
- Disciplinary Hearings
- Roughly 12% (33) of the administrative positions are supporting school sites in instructional supervisorial roles, maintenance and operations, and pupil transportation. For example, these positions include our Director of Guidance and Counseling, Chief Operations Officer, Student Transportation Supervisors, and Manager for Facilities Maintenance. Within these positions the district employs a grant writer and this individual has garnered nearly $75 million in funding for Sac City Unified since the 2014-2015 academic year. Click here to view a listing of job titles and salaries for these 33 FTEs.
- Only 21% (57) of the administrative positions in the district are administrative employees that are paid out of the general fund for a total combined salary amount of $6.7 million. Many of these employees lead the district, or parts of the district, and perform highly critical leadership functions in human resources, business services, accounting, technology, communications, operations and accountability to support school sites with the delivery of essential services that sites depend on but are unable to perform on their own. These positions include the district’s leadership team including the Superintendent, Deputy Superintendent, Instructional Area Superintendents and their administrative management and support staff. Click here to view a listing of all job titles and salaries for these 57 FTEs.
Every school district depends on administrative employees to keep school sites open and running to serve the needs of students. While the district’s total number of full-time administrators is currently 31 FTE greater than in 2014, this growth and the percentage of overall budget that is allocated for administration is on the lower end of administrative costs compared to surrounding districts in the Sacramento region (see chart below).
Source of Data Used in Chart: California Department of Education
Why was the district’s budget disapproved in the first place?
David Gordon, the Sacramento County Superintendent of Schools, in his oversight role disapproved the district’s budget as projected deficit spending will leave the district without the resources to address the needs of students now and in the future. The issue is that the district has budgeted to spend more than they receive, and this practice is financially unsound and unsustainable. In 2019-20, the district predicts they will run out of money.
If the district can cover its expenses this year, then what’s the problem?
The County Superintendent is required by law to provide fiscal oversight of the district’s finances to ensure the district is meeting the state mandated requirement to maintain two (2) percent in reserve in Fiscal Years 2018-19, 2019-20 and 2020-21. Based on the District’s Third Interim Budget Report, the district is projected to run out of cash by October 2020.
How much does the district need to cut to balance its budget?
The District must cut or find cost savings totaling $34 million to eliminate its structural budget deficit. The District plans on using $19.67 million of its remaining reserves in 2019-20 to cover its expenditures and buy itself enough time to achieve cost savings through labor negotiations.
What cuts will be made?
As of Third Interim (May 2019) the Board of Education has adopted $21.1 million in cuts/cost savings for the current fiscal year and an additional $7.8 million in future cuts through layoffs that will take effect July 1, 2019. The District has been making cuts away from the classroom and projects the adopted cuts will buy the District enough time to achieve more cost savings through labor negotiations.
Was the budget disapproved because the district mismanaged its finances?
The Budget was disapproved because the County Superintendent is required by law to provide fiscal oversight of the district’s finances and the district’s budget has projected deficit spending that will leave the district without any reserves by October 2020. Although the District has enough cash to cover its expenses for the current fiscal year, there are not sufficient reserves in future years.
Does the district have a top-heavy central office and high amount of administrative overhead? (updated 10-11-18)
Not in comparison to other school districts. This can be determined by how much of the district’s overall budget is spent on general administrative expenses allocated to the central office. The district’s records that were submitted to the California Department of Education show general administrative expenses allocated to central office have actually decreased from approximately 4.5 percent of total general fund budget in FY2013-14 to approximately 4.4 percent of total general fund expenditures in FY2016-17. These figures show an overall decrease in central office and general administrative spending of approximately one tenth of a percent during this time period.
It is worth noting that this decrease occurred while the district’s budget significantly increased during this time period. From the FY2013-14 fiscal year to the FY2016/17 fiscal year, the district’s budget grew from $381,975,878 million to $491,870,200 million in total general fund. The larger revenues led to hiring more staff at all levels of the organization to implement programs and services, especially for those dedicated to low-income, foster, and English Learners. At the same time, the number of teachers employed by the district grew during this time period. For example, in 2014-15 there were 2,298 FTE teaching positions in the district. In 2017-18 that number grew to 2,521 FTE teaching positions in the district—an increase of 223 FTE teaching positions*.
See chart below for how Sac City Unified’s general administrative expenses as a percentage of its budget compared to surrounding districts. This calculation follows the industry standard for calculating general administration percentage of total expenditures. This number is calculated by dividing the dollar amount of general administration expenditures (function codes 7000 through 7999, except 7600-7699) by the total expenditures on the district’s annual unaudited actuals report (Source: California Department of Education http://www.cde.ca.gov/ds/fd/fd/).
* Source for number of FTE certificated (teaching) positions: Sacramento City Unified School District Financial Database
Source of Data Used in Chart: California Department of Education
When will a new budget be adopted?
The Board of Education will adopt a new budget at its June 20, 2019 meeting. The meeting will be at the Serna Center (5735 47th Avenue) and starts at 6:30 p.m.
Why can’t the district just continue borrowing from its reserves?
Based on the District’s Third Interim projections, it does not have enough reserves and will completely run out of cash by October 2020. The County Superintendent has a statutory obligation to intervene before this happens.
SCOE has been warning the district for years, how is this different?
This is the first time that the district’s budget has been disapproved. The district has received warning letters in the past to address its financial sustainability. However, now the County Superintendent is requiring the district to take action and implement a structurally sound, long-term financial plan to pay for its expenses and the programs that serve its students.
What will be the impact on students, staff and the community?
So far the District has been able to address the budget crisis with little to no impact on students. The district has made central office cuts, issued layoffs and used reserves. However, in order to continue making sure students are not impacted, the District must achieve further cost savings through labor negotiations.
Was the budget deficit caused by the district’s recent labor contract agreements?
Not by itself. A series of salary increases reached with multiple associations increased the district’s expenses by over $30 million at the start of the 2018-19 fiscal year. The district has been identifying cost savings in other areas to cover these costs in future years.
Why can’t the district just “cut from the top” to balance the budget?
Administration makes up too small a portion of the budget to be sufficient to close the budget deficit. The district already operates a lean central office and administration compared to other similar districts. The total cost of General Administration for Sac City Unified is currently approximately 4.4% of its total budget. While further cuts in this area will continue to be explored with the fiscal advisor, cuts at the top alone are not a viable solution.
Has the district communicated its financial challenges?
Yes, many times and often. Here is a summary of just some actions the district has taken to communicate about this problem throughout the past year:
- In March 2018, the district created and distributed a finance publication describing its financial challenges. Over 120,000 print copies of this publication were distributed at school sites, families, employees, and the general community through in-person distribution at schools and mass distribution through the Sacramento Bee and Sacramento News and Review.
- The district also shared this publication multiple times online via its weekly e-newsletter and social media posts for the remainder of the 2017-18 school year, starting in April.
- The district sent out a press release on June 22, 2018 announcing it had a budget deficit and that story was covered by multiple local news media outlets.
- Superintendent Aguilar published an op-ed in the Sacramento Bee on August 31st calling on the community to work with him to address the district’s budget deficit.
- Superintendent Aguilar has been communicating in weekly emails to staff over the past year that the district is facing a budget deficit and challenges.
- The District continues to update the community through frequent budget alerts.
How can I submit a question?
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