Frequently Asked Questions
Why was the district’s 2018-19 budget disapproved?
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 budget adopted by the district in June and submitted to the Superintendent and the Sacramento County Office of Education (SCOE), SCOE determined the district will have spent all of their reserves before the end of the 2019-20 school year leaving the district broke.
How much does the district need to cut to balance its budget?
This has not yet been determined. The district estimated the shortfall to be $22 million in 2019-20 and $40 million in 2020-21. These figures were submitted to the County Superintendent in the adopted budget. The district is working with a fiscal advisor appointed by the County Superintendent to determine the precise figure. The fiscal advisor started her work on September 10 and is working with the district to ensure it adopts a structurally sound, fiscally responsible budget. The district already made $4.3 million in cuts at its June 21, 2018 Board of Education meeting, instituted a central office hiring freeze, and cut back and/or eliminated travel for employees unless funded by grants or reimbursable by a state/federal or non-profit entity.
What cuts will be made?
No decisions have yet been made on cuts other than the administrative and central office budget cuts already adopted on June 21, 2018. The first step in the process will be to allow time for district staff along with SCOE’s fiscal advisor to conduct an assessment and review potential options for the district.
Was the budget disapproved because the district mismanaged its finances?
No. It 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 before the end of the 2019/20 school year. The district’s adopted budget although having sufficient resources to pay expenses for this year, did not include sufficient reserves for outgoing years.
Does the district have a top-heavy central office and high amount of administrative overhead?
Not in comparison to other school districts. This can be determined by how much of the district’s overall budget is spent on administrative expenses allocated to the central office. The district’s records show administrative expenses allocated to central office have actually decreased from 4.5 percent of unrestricted general fund budget in 2014-15 to 4.2 percent of unrestricted general fund expenditures in 2017-18. These figures show an overall decrease in central office and administrative spending during this time period. It is worth noting that the district’s budget significantly increased during this time period. From the 2014-15 fiscal year to the 2017-18 fiscal year, the district’s budget grew from $333,320,568 million to $395,468,056 in state and local unrestricted general fund revenue sources. The larger revenues led to hiring more staff at all levels of the organization to implement programs and services dedicated to low-income, foster, and English Learners paid for with these revenues. By comparison, the number of teachers employed by the district also grew during this time period. For example, in 2014-15 there were 2,298 certificated (i.e. teaching) FTE employees in the district. In 2017-18 that number grew to 2,521 certificated FTE employees in the district—an increase of 223 teaching positions*. That increase in hiring of teachers would be equivalent to fully staffing classrooms at McClatchy High School three times. See chart below for how Sac City Unified’s administrative expenses as a percentage of its budget compare to surrounding districts.
* Source for number of FTE certificated (teaching) positions: Sacramento City Unified School District Financial Database
By when does a new budget have to be adopted?
State law requires the district has until October 8, 2018 to readopt and submit a budget to SCOE.
What happens if an adopted budget is not approved by SCOE’s deadline?
The October 8, 2018 deadline is not SCOE’s deadline.The Education Code requires the district to revise and adopt a budget and file the revised budget to SCOE no later than October 8, 2018. No later than November 8, 2018, the County Superintendent approves or disapproves the revised budget.
If the County Superintendent disapproves the revised budget, the Education Code calls for the formation of a Budget Review Committee, unless the district and the County Superintendent agree to waive the requirement. Once a waiver has been approved, the County Superintendent shall invoke his duties under Education Code 42127.3 and can stay or rescind any action inconsistent with a budget that would allow the district to meet its financial obligations.
Why can’t the district just continue borrowing from savings?
Based on the district’s budget projections for 2018-19, 2019-20, and 2020-21, the district will exhaust its savings account and deplete its savings within two years. The County Superintendent has a statutory obligation to intervene before this happens. The fiscal advisor will be working with staff and reviewing the accuracy of the district’s projections as part of the assessment of the district’s finances.
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 for many years to address its financial sustainability. Now, district projections show that our reserves will be gone by the end of 2019-20. Therefore, 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?
The district addressed these challenges by making central office cuts, executing a hiring freeze in the central office and making other administrative cuts to avoid impacting classrooms. The district will continue working closely with the fiscal advisor and the state’s Fiscal Crisis Management Assistance Team (FCMAT) as they review the district’s options for making cuts and reducing costs. The district goal is to keep the cuts as far away from the classroom as possible.
Do you have a timeline for the budget cuts that the district will be implementing?
The district is in the beginning stages of looking at what those cuts look like but the district is committed to transparency and we will be providing the public with that information when it becomes available. Please sign up for the budget updates to receive the most updated information. The deadline for the district’s Board of Education to adopt a revised budget is October 8, 2018.
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. The district must identify cost savings in other areas or increase revenues in order to cover these costs in future years.
Why can’t the district just “cut from the top” to balance the budget?
The money being spent on administration cannot 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 4.5% of its total budget. While further cuts in this area will 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 this 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.
How can I submit a question?
Submit your question by clicking here.