Blog note: this article references a grand jury report.
OAKLAND — The debt-ridden Oakland Unified School District is poised to receive a $34.7 million bailout from the state over the next three years, but it may mean the district will have to close schools and sell some of its property.
The bailout is the result of California’s Education Trailer Bill, AB 1840, which Gov. Jerry Brown signed Monday. The bill allows for some school districts, including Oakland Unified, to receive additional state funds if their revenue from enrollment will not cover their expenses. Oakland Unified is amid a multi-million budget crisis, and still owes the state money after going into receivership in 2003. Earlier this year, district officials determined that it needs to cut $30 million over the next year in order to remain fiscally solvent.
The district maintains that this agreement with the state is not the same as going under state receivership. Under this agreement, the district and school board still have autonomy over Oakland Unified’s finances, officials said.
Keith Brown, president of the local teacher’s union, the Oakland Education Association, said the fact the bailout is different from going into state receivership doesn’t necessarily put his mind at ease. Though he said state financial support for Oakland Unified is justified, the union is strongly opposed to school closures.
“Our position is that our students need stability, not school closures,” Brown said.
Assemblyman Rob Bonta, D-Oakland, who helped pass the legislation, said the district has already started taking steps to stabilize its finances. Still, the district has a ways to go.
“Despite these efforts, the district still forecasts the need for additional and even deeper cuts in the tens of millions of dollars over the next couple of years. These reductions would likely cause severe impacts to the District’s ability to effectively educations Oakland’s students,” Bonta said.
Superintendent Kyla Johnson-Trammell, in a statement, said this type of debt relief is unprecedented but will not prevent the district from having to make tough budget cuts it was already poised to do.
“It will not be without pain,” Johnson-Trammell said. “Reductions are required to address our structural deficit, and our portfolio of schools must be examined to right-size the district’s facilities footprint.”
The district estimated a fiscal shortfall of $30.3 million beginning in the 2019-20 school year. State funds provided to the district under AB 1840 will cover up to 75 percent of the deficit during that year, up to 50 percent of the deficit the next year and up to 25 percent of the deficit in the third year. All together, the district will be getting $34.7 million from 2019 to 2013, according to the bill.
But the school district has to do its part, too, to reach fiscal solvency, and prove so each year before receiving the money.
“The state will be monitoring the district’s activities to ensure their investment is used wisely,” Oakland Unified officials said in a presentation on the district’s website.
First, the district must submit short-term and long-term financial plans “based on reasonable and accurate assumptions” and expenditure data from current and past years, according to the presentation. Those plans are due March 1.
Every year after that until 2021, the district will have to give the state a progress report on its efforts to achieve the goals laid out in the plans. The progress reports will be certified by the Alameda County Office of Education and an independent Fiscal Crisis Management Assistance Team. The state will assess how the district is doing balancing budgets, selling or leasing its surplus property, saving money for a rainy day and taking other money-saving step — which could include closing some schools.
“The (state fund allocations) are not guaranteed,” Oakland Unified officials said in the presentation.
An Alameda County civil grand jury report issued in June found that the district was operating more schools than it had money for, and many had low enrollment. The school board, in its official response to the report, agreed with the assessment, though it indicated hopes it can trim the budget elsewhere and not have to shut down campuses.
Brown said he is hopeful that the process will add another level of transparency for Oakland Unified’s school board.
“Historically, there have been concerns around mismanagement or lack of authentic engagement at the Oakland Unified School District,” Brown said. “But I do see this as an opportunity for educators to work together with parents and the community to demand true accountability of our school board and district.”
September 19, 2018
East Bay Times
By Ali Tadayon
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