The Abridged version:
- Sacramento City Unified leaders said this week they have a path to keep the school district’s budget funded — so long as the county office does not overrule their approach again.
- District leaders have sought the help of state Superintendent Tony Thurmond, who holds the power to step in as overseer of Sacramento City Unified.
- A new agreement between the district and its teachers union extends provisions from an earlier contract, with which the county office originally took issue.
Sacramento City Unified leaders say they have solidified a way to fund the school district for at least the next two years.
Their plan includes a new agreement with the Sacramento City Teachers Association. Last time the district struck a deal with the union, the Sacramento County Office of Education intervened and blocked the contract.
District officials are now asking the county office to walk back that decision by next week. And if the county advisers do not support the district’s approach, Sacramento City Unified is looking up the chain of command.
“We respectfully ask Superintendent Thurmond and his team … to support a timely resolution of this matter,” district Superintendent Cancy McArn wrote in an email to multiple employees and elected officials Wednesday.
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State Superintendent Tony Thurmond became involved last month in the ongoing conflict between Sacramento City Unified and its county overseers.
The top state education official previously put the county office on notice, threatening to take over its authority as supervisor of the cash-strapped district.
Terms of the new deal
The first agreement with the teachers association, ratified in late July, touted almost $100 million in savings. Most of that came from temporarily shifting the funding source for retired teachers’ health benefits.
Instead of using money from the district’s general fund, payments would come out of a special reserve fund for the next three school years.
This new contract update adds another year of leaning on that trust fund.
County officials had criticized the original agreement for closing bargaining with the district’s largest labor union until 2030. And they raised concerns about dipping into a reserve pot of money.
District officials argued that’s exactly what that fund is meant for.
“This payment is not considered a loan and is not required to be repaid,” the latest agreement states.
The union deals are not the entirety of the district’s plan, McArn said in her email this week.
“They are, however, a necessary bridge toward solvency,” she wrote.
“They further demonstrate the progress we can make with our labor partners even when our collective bargaining agreement is closed,” McArn added.
Review of the numbers
District staff Thursday presented the agreement and their latest budget outlook, while reviewing an annual audit of last year’s finances.
At this time last year Sacramento City Unified leaders became aware of about $43 million in unknown expenses and the larger multimillion-dollar crisis came to light.
But this year, Chief Business Officer Gerardo Castillo offered a notably more optimistic report.
“We still have work to do,” he said. But, Castillo said, they are no longer expecting a negative balance at the end of this or next year.
Having updated numbers to refer to and rely on has been the “crux of the issue” throughout the past year, said Trustee Jasjit Singh.
“I think this provides a much more clear picture on where our budget was,” he said, “and provides a much better baseline on where our budget is headed.”
‘Monopoly money’
But financial advisers said the district’s projections are dubious, based on their preliminary reviews of the new financial reports.
“They’re using Monopoly money,” said Michael Fine, CEO of the Fiscal Crisis and Management Assistance Team.
He pointed to two pieces — a block grant and a portion of state funding withheld in this year’s budget — which are each one-time revenues, but the district team has included in their plan as recurring sources.
Fine said district staff presented both items last week during a meeting with his team, and county and state officials.
“I certainly was hopeful they’d change that,” he said.
In his presentation Thursday, Castillo said even though the grants are technically one-time funds, the state has tended to provide them each year. So, staff included the items in their accounting.
“Yes, it’s riskier,” Castillo said.
