Blog note: this article references a 2015 grand jury report.
OAKLAND – The Peralta Community College District is facing an estimated $7.3 million shortfall in its tentative 2018-19 budget, and administrators are rushing to close the gap by proposing cuts in discretionary spending, freezing vacant positions and taking back recent raises.
The budget crisis comes as the district administration faces allegations by the faculty union that it has systematically misallocated money from a voter-approved 2012 parcel tax, even as it prepares to ask voters to extend the tax.
The proposed $146 million budget for the four-campus district was presented at a hearing last month and is scheduled for approval in September. The timing of the cuts angered some trustees and one questioned the validity of the proposals outlined by Chancellor Jowell Laguerre’s administration.
“I don’t know why we start this process at the end of the school year when we know most of the faculty is going to be away, Trustee Julina Bonilla said. “We were assured we would start the process earlier.”
“It feels often to me we’re constantly in crisis mode, that we have to make decisions immediately, like we have to make decisions yesterday,” added Trustee Karen Weinstein, who represents Berkeley.
Vice-Chancellor of Budget and Administration Romaneir Johnson blamed the problem in part on a drop-off in enrollment that resulted in a reduction of state aid. “We did not meet our target” of full-time equivalent students, she said.
But the district is also overspending, she added. “We’re spending more on expenditures than we’re taking in,” she told trustees.
Laguerre said one cut that is certain is a rollback of a 1.5 percent raise given to all employees last year.
“It was not permanent,” he said Thursday in a phone interview. Rather, the salary increase was contingent on enrollment remaining stable.
“It’s challenging as a trustee to look at the numbers and actually trust them,” Trustee Nicky Gonzalez-Yuen said at the budget hearing. He called for “significant and fairly radical changes” in the district’s budgeting process.
Other cuts are being decided by administrators at the district’s main office and its four campuses — Laney and Merritt colleges, the College of Alameda and Berkeley City College.
Laney College President Tammeil Gilkerson said she now cannot fill vacant positions that totalled $1.6 million in salary costs and has to reduce discretionary spending by $300,000. “The cuts are fairly deep,” she said.
The budget isn’t the district’s only problem. It has also had to contend with a lengthy whistleblower complaint lodged last year by its former chief spokesman, Jeffrey Heyman. The complaint focused largely on fiscal matters.
Heyman complained that Laguerre had set up a “shadow finance department” to manage money outside the district’s general fund and that Laguerre had provided “false/misleading information” to trustees and the public about district finances.”
Those allegations were dismissed, according to a letter sent to Heyman Friday — the day after this news organization asked Laguerre about the year-old complaint.
The investigation by an outside law firm did find that trustees overspent their travel budget by $19,500 between 2015 and 2017 and that the district violated the state public records act by failing to release documents to an unidentified reporter. It also failed to respond to records requests within the time frame required by law, according to the letter written by attorney William Prather.
Heyman said he was disappointed by the findings and stood by the complaint.
Laguerre has been accused of improper financial management in the past. In 2015, a civil grand jury criticized the Solano County Community College, where Laguerre was president, for “misleading and contradictory” language on a $348 million bond measure.
While state law calls for specific details on projects to be built with voter-approved bonds, Laguerre admitted in a letter the college “deliberately elected to not tie its hands with an exact list” of projects. The grand jury wrote that “the loose manner in which the college conducts its business leaves it open to the potential appearance of misfeasance.”
At Peralta, the faculty union accused Laguerre’s administration of misusing money from the 2012 Measure B parcel tax. The proceeds, meant to pay for academic instruction, have instead been spent on salaries and benefits of non-classroom administrators, the union alleges. Michael Mills, head of the citizens’ committee appointed to oversee how the tax dollars are spent, told this news organization in May that he was concerned about the use of the funds, despite an audit finding that there was no misappropriation.
Laguerre said this week he disagreed, claiming “the parcel tax is used the way it should be used.” He also said that another parcel tax will likely go to voters in June 2020. It would not increase the current $48 per year rate. Trustees may vote on the ballot measure as early as this month, he said.
July 8, 2018
The Mercury News
By Thomas Peele
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