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In an effort to spend down bloated reserves and help the students who need it most, the Mountain View Whisman School District’s board of trustees agreed earlier this month to its second straight year of deficit spending. The red ink comes despite big increases in property tax revenue and the passage of the Measure B parcel tax in May.
The 2017-18 budget calls for a $69.6 million spending plan — adding up to just shy of $3 million in deficit spending — that would pay for new staff and expansion of an instructional program targeting students in need of either remedial help or more challenging classwork. The “Response to Instruction” program (RTI) will be spreading to all the elementary school sites in the 2017-18 school year, requiring eight new teachers at a total cost of about $1.2 million annually
Another big increase comes from rising pension costs for the district’s teachers and classified staff. California is ratcheting up the amount school districts have to pay into the state’s retirement fund each year until the 2020-21 fiscal year, and for Mountain View Whisman that means more than $1 million in additional costs are tacked on to each annual budget.
The school district’s spending-heavy trajectory is expected to continue for at least a few more years. The combined costs of new pilot programs like the Sobrato Early Language Acquisition program ($2.7 million), the annual cost of opening Slater Elementary ($700,000) and the heavy yearly bill to pay off debt for the district’s capital fund ($2.64 million) are necessitating a steady $3 million in deficit spending through the 2019-20 school year.
That’s not necessarily a bad thing, said Robert Clark, the chief business officer for the district. The school district had a huge reserve fund in 2015 when he joined the district, and the conventional wisdom is that school districts ought to spend money on the students they have now, rather than hoard large sums of money for a rainy day. The school board agreed, and the plan has been to spend down reserve until they reach around 17 percent of the annual budget.
“When the superintendent and I arrived, the district was sitting on 33 to 34 percent of its annual budget as reserves,” Clark said. “Unless you are in a really volatile market, that might be excessive.”
The district’s questionably large reserve fund was a big target for the district’s teacher union back in 2014, when the union leadership claimed the district was opting to put away money when many teachers were struggling to pay the rent. Reserve levels have decreased since then, but still remain at about $22.7 million. The debate at the time was fierce, with former Superintendent Craig Goldman arguing that the district’s fiscal responsibility and big reserves was what prevented a spree of layoffs during the Great Recession.
The district is expected to reach the new target reserve level of 17 percent of the annual budget at the end of the 2019-20 school year, at which point district officials need to find ways to “streamline” the cost of school programs, Clark said. The goal is to have a balanced budget by 2021, and a Budget Advisory Committee will be put together to make sure parents and community members have a say in creating the leaner the budget.
Clark said he is confident that three years is plenty of time to figure out a way to level off spending, and avoiding painful budget cuts where teachers and staffers face losing their jobs.
“If we were at 2019-2020 and we were sitting on a $3 or $4 million deficit, I would be nervous,” he said. “But I know we have a few years.”
The big new line-item expenditure added to the budget this year is paying off what’s called a Certificate of Participation (COP), a board-approved finance option for school construction that infused the district’s construction budget with an additional $40 million. The COP was taken out specifically to help fund construction of a new, mostly two-story campus at Slater Elementary, which is slated for completion in 2019.
The district is relying heavily on its leased properties to pay off the annual $2.64 million cost of the COP, Clark said. The district will draw from developer fees first, and once that’s exhausted, will use lease revenue from the German International School of Silicon Valley, which is located on district-owned land at the former Whisman Elementary School. When the German school money dries up, lease revenue from Google’s day care center on the northern end of the Slater campus will be used to offset the remaining cost of the bill.
Ayinde spends money on any bright and shiny objects that fascinate him without worrying about cost (or quality). Just like the disastrous Teach to One program!
And the Board just goes along!
Just wait until they spend down the reserve and the really hard choices have to be made!
If you keep doing things the same way you’ve always done them ( i.e. teaching methods), you get the same results. If you need to change and want to be innovative and try different interventions, you need to spend money.Thank goodness the district has a visionary leader and also had the money to support changes.
“In an effort to spend down bloated reserves”
How about this modest proposal: return the money to the taxpayers. The school board has long history of wasting money from paying $250K bonuses to superintendents who are being fired to signing up for unproven math programs.
“Another big increase comes from rising pension costs for the district’s teachers and classified staff.”
This is a huge issue that is still being mostly ignored. California still assumes a totally unrealistic return about 7% above inflation on the pension fund investments to arrive at the required contributions by government bodies like the school district. A more realistic 2-3% would require much higher amounts to be set aside. But that is a future school board’s problem so like the song says “don’t worry–be happy.”
Thank you former Trustee Chiang.
Good to see that both the Chief Administrative Officer (Rudolph) and the Chief Business Officer (Clark) understand the public policy objectives of the Board that hired them, and have been working for those goals. I hope the new Board will get themselves together – to make sure that high quality, teaching programs, proven by data, will continue.
Trustee Blakely apparently has not paid attention to the “three year rule” for testing and adopting expensive new programs. Her rather short dismissal of the Teach To One fiasco (TTO Math), and the lessons to be learned is troubling! The expensive pull-out program, (RTI) Response To Instruction, was approved for full implementation before the first year even completed. My request for all public RTI summary documents, that I studied, confirmed that there was no academic data report on this program, before the first year pilot trial ended. There may have been weekly updates – but no conclusive academic improvement numbers in the rush to ’try the NEW PILOT PROGRAM, full speed ahead!’ (8 new full-time teacher hires)
Over a million dollars, for full scaling an academic program that needed major revision in it’s first year. A program that does not add even one hour of increased academic instructional time for the district’s most needy students, the LCAP “Target Students” who are vastly underperforming other students.
Along with the “new extra third” principal at Graham, and the half-million dollar per week Nature Bridge curriculum for 8th Yosemite trip, there are three examples of academically unproven (in our district, with our student’s academic improvement data) spending that are ripe for “trims” in the next few years. Teachers have written complaints for years that ‘new programs are added, not review, and endlessly extended.’ This is done by the District Office, not vetted and “not approved by teachers for continuation”.
Hopefully the new Trustees like Blakely, will not be swayed by one-year-pilots (no academic data reports), by “out side experts” (pushing their own Alphabet program), and start to turn to internal teacher-led evaluation of the core curriculum/teacher needs of the school district.
Steven Nelson is a retired MVWSD Trustee, who supported a one year, 4 school RTI pilot
Superintendent evaluation – “a process in need of improvement”. Chris – I have admitted at a Board public meeting that Dr. Rudolph himself started to improve the MVWSD process by bringing in an outside ‘Sup Evaluation’ template document. It is very useful and other administrators have admitted that they have started to use it internally.
However – The last evaluation cycle Board President Ellen Wheeler wrote up the summation of the evaluation, and entered it into the Superintendent’s personnel file WITHOUT SENDING COPIES OR HAVING A FINAL CLOSED SESSION DISCUSSION WITH THE ENTIRE BOARD. Yes – Ellen ‘wrote it herself’ and kept the final copy secret from the Board.
I cannot legally disclose the discussions done a year ago. But Ellen’s secrecy process? The entire community deserves to know what process she uses when she is leader of the Board. CLOSED & SECRET
June is the time of the school board’s greatest fiduciary duties: evaluating the superintendent and approving the budget.
The budget’s a year-long process, and ideally, so should the evaluation of a superintendent, but unlike a budget process that is driven by state law, how and when a school board evaluates a superintendent is at the discretion of the school board. It’s a process in need of improvement.
I hope the school board commends district innovation, but also brings up the concern of on-going non-inclusionary practices and high-risk policies that unravel community trust.
It’s very high risk to spend a surplus on new staffing. Surpluses should go to one time investments or one-time crises (like cyclical state budget cuts). New staffing and structural deficits (pension increases aren’t going away) need to be handled within the annual budget and/or parcel taxes.
The surplus is a wonderful opportunity and should be used, but why not invest that surplus in one-time improvements like classroom equipment, Slater re-opening cost, PD on instructional reforms (like personalized learning) or bold ideas like teacher housing construction. Items that were not in the last bond, and can’t be covered by operational revenue, but are also still one-time expenses (small real-life examples: Crittenden’s new maker space lacks a laser cutter even though the bond built HVAC for it and the new innovation center’s lobby lacks a high powered projector and sound system).
I do not doubt the good intentions of the district’s spend down plans, and they are certainly for the students. But spending a surplus on programs you can’t fund when the surplus is gone should be an unacceptable risk to the board, and sets the community up for a story three years from now titled “fiscal crisis in MVWSD”
I agree with everything presented by Mr. Nelson.
It’s not that pilots or extra staff don’t help students, it’s that they aren’t sustainable if the district is already in a deficit and is spending through its surplus.
Spending the bulk of the surplus on one-time investments in revenue generating infrastructure like solar panels would end up helping more kids in the long term. Benefits of solar deserve more district attention, as do teacher housing.
Mercury ran a succinct story on the fiscal climate for our schools, “K-12: ‘Tidal wave of expenses’ in looming California school budget crisis” http://www.mercurynews.com/2017/07/02/tidal-wave-of-expenses-in-looming-california-school-budget-crisis/