BOARD ACTION

March 8, 2017 Board MeetingAgenda Item #17: http://capousd-ca.schoolloop.com/file/1218998819331/1455438848279/3683223076990268567.pdf

Board Audio: 

Staff is asking the Board to approve CUSD's Second Interim Financial Report and to Certify that the District will be able to meet its financial obligations and required reserve levels for the current and subsequent two fiscal years.

 

 

BLUE CARD Dawn Urbanek

Staff recommends approval of 2016-17 2nd Interim Report with a  POSITIVE Certification. This means that based on current projections, CUSD will be able to meet its financial obligations for the current fiscal year and subsequent two fiscal years.

CUSD must maintain a 4% reserve unless SB858 triggers are met, at which time reserves will be capped at 2%

CUSD is currently expected to receive $8 million less in revenues than anticipated over the next 3 fiscal years.

2017-18 ($6,048,716)

2018-19 ($   915,386)

2019-20 ($   799,193)

AT page 309

AT page 199

AT page 202

Salaries, pensions and benefits make up 89% of CUSD's budget. If CUSD does not know the actual cost of 89% of its budget, how can a POSITIVE CERTIFICATION be filed?

AT page 310  

If employees get everything they want in the current negotiations, then Salaries and benefits will represent 91.5% of CUSD's total budget. If some cuts to compensation are forced then it may go as low as 85.5% of CUSD's budget.

 

CUSD uses a "MULTI-PRONGED" Approach to balancing its budget.

STEP ONE: The budget starts with projected increases in salaries, health and welfare costs, as well as step & column salary increases.

If there is a budget short fall after compensation increases then CUSD makes cuts to the budget by:

STEP TWO: Starting with unilateral reductions in staffing and programs at the district level.

then

STEP THREE: Backs into negotiated concessions from all employee groups.

The District has used this approach for several years. Until the 2012 election year it would have been very difficult for parents and the public to understand how unfair this approach is to students. The effect of Prop 30 on District budgets made it very clear how the cuts that are publicized (Disclosed to the Public) at Budget Adoption, are not necessarily what cuts are actually made. When budgets are amended at each Interim report it turns out that the cuts to employee salaries disclosed to the public, are never actually implemented. This is a fundamentally flawed approach to addressing CUSD's budget shortfalls because it protects employee compensation at the expense of everything else (core educational programs, class sizes, decreases in instructional time, and deferring maintenance). 

Since 2006 CUSD has been forced to cut it's budget by $152 million dollars (about 32%). During that same time period, teachers have only seen a 1.2% reduction in their salary schedule. Under California's new education funding law- the Local Control Funding Formula the goal of the State is to reach 2007-08 levels of per pupil funding + inflation by 2021. With the passage of Prop 30, the State guaranteed that all unionized employees would be made hole by 2015. The State; in collusion with its public employee unions, conspired to protect public employee compensation and did so at the expense of the 6 million students that State has a Constitutional obligation to educate. 

 

The Road to recovery for students is as follows:

• Taxpayers must vote to:
• Make Prop 30 taxes Permanent
• Pass the State's $9 billion dollar State Facilities Bond
• Pass CUSD's $2 billion dollar School Facilities Bond (Cost as high as $60 per $100,000 accessed home value - a million dollar home will be taxed as much as $600 more per year)
• Continue to pay Mello Roos taxes on top of the Bond and other taxes
• Assembly Bill 464 increases to 3% (from the current 2% cap) the maximum sales tax rate that can be levied by local governments.
• Parents must continue to fundraise for Art, Music and Science
• Students must continue to pay illegal fees - like paying to park at school

Today California is enjoying record high revenues of over $125 billion. In 2007-08 State revenues were $103 billion.  

The State uses the public education system to generate surplus revenues that should be adequately funding schools, and then uses that money instead to create new programs and entitlements that are not Constitutionally mandated.

California's 2015- 16 5-year Infrastructure Plan contains -0- dollars for K-12 Public Education (the States #1 Constitutionally mandated expenditures) That is by design. The State expects local school districts to raise local tax money to fund facilities maintenance (after it has allowed districts to deplete deferred maintenance funds to fund employee compensation) and will no longer provide matching funds for new construction forcing voters to approve the $9 billion State Facility Bond Prop 51.

The Governors infrastructure plan does not allocate a single penny for facilities funding for K-12 Public Education stating that it is the intention of the State to provide greater flexibility for Cities, Counties and local school districts to borrow money, or raise taxes to fund K-12 infrastructure projects. 

Proof: http://www.ebudget.ca.gov/2016-Infrastructure-Plan.pdf page 3

Taxpayers should know...
 
$51 billion of the $55 billion dollar plan is going to Transportation aka High Speed Rail.

Just as the State and it's public employee unions abuse the State's 6 million students, the continuous lack of adequate district funding at the District level pits what is in the economic interest of employees against what is in the educational interest of students and the financial interest of taxpayers. CUSD in collusion with its employee unions abuse the 50,000 students that CUSD is suppose to educate.

EXAMPLE- 

To balance it's current budget to achieve a POSITIVE CERTIFICATION, CUSD cut $6 million from its budget by cutting spending on books and supplies for students.

AT page 201

AT page 311

AT page 312 CUSD just makes corrected projections for the two subsequent years (kicking the can)

AT page 314 of 381 The District is deficit spending

  • 2016-17 2.7%
  • 2017-18 2.8%
  • 2018-19 2.5%

AT page 323 CUSD unfunded pension liabilities have increased:

First Interim Report $52,818,201

Second Interim Report $57,265,077

IN A NUT SHELL- CUSD fakes a POSITIVE CERTIFICATION by cutting books and supplies and borrowing from its reserves to provide employee compensation increases.

If CUSD funded art, music and science for every student rather than rely on fundraising and donations the district would be financially bankrupt.

If Class sizes were reduced to reasonable levels and the District did not have 8,555 students beyond it's legal capacity, the district would be financially bankrupt.

If CUSD paid for the $889 million dollars in repairs and maintenance that it says CUSD facilities need then the district would be financially bankrupt.

CUSD should be filing a NEGATIVE CERTIFICATION.

Trustees should not approve this resolution.

AT page 338

 

 

BOARD PRESENTATION