The Abridged version:
- Sacramento County education officials overturned a key piece of the new financial recovery plan approved by Sacramento City Unified School District.
- The county office has upped scrutiny of the school district as its budget situation worsened, including implementing new spending reviews.
- Experts say that without another major solution, Sacramento City Unified leaders may need to turn to state lawmakers for an emergency loan.
Officials from the Sacramento County Office of Education hit the brakes on a key provision in the Sacramento City Unified School District’s fresh financial recovery plan.
The county office has upped scrutiny of the cash-strapped district since the start of the year, following a less-than-confident midyear budget update in December.
Part of that increased oversight included county Superintendent Dave Gordon appointing Luz Cázares as a fiscal adviser, with the authority to overturn decisions she and Gordon believe would worsen the district’s situation.
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Before last week, Cázares had exercised that power one other time, to block the district’s use of outside advisers.
On Friday, Cázares acted again, this time to rescind a recently approved deal between Sacramento City Unified and the Sacramento City Teachers Association.
The agreement would equal almost $100 million in savings over three years, according to district and union leaders. It represented about a third of the district’s updated solvency plan, which trustees reviewed and approved last week.
County leaders, though, expressed concerns about where the bulk of that money was coming from, as well as the implications of extending a contract with teachers.
Sacramento City Unified trustees are expected to discuss appealing the county’s decision to the state superintendent at a special board meeting Tuesday.
County clamping down
As circumstances at Sacramento City Unified seemed to grow grim throughout the spring, county officials stepped in and curbed some of the school board’s authority.
Tensions between trustees and the county education office simmered during the school year, flaring in March when Cázares made her first recission.
“I think it’s fair to say that the board is continually frustrated,” Tara Jeane, board president, told Abridged at the time.
Board members were amicable last month when Sacramento County and Sacramento County Office of Education officials announced additional reviews of the district’s budget process.
“I think this is appropriate,” Trustee Taylor Kayatta said at the time. “I’m glad, as a taxpayer, not just as a parent and a board member here, that there’s a check in place.”
Help versus hurt
Trustees were banking on the new deal with the teachers, as part of a broader fix to escape a $135 million hole and avoid turning to the state for a loan.
The four-year agreement included a combination of savings, but the primary source was a temporary change in how the district would pay for retired teachers’ health benefits. Instead of using money from the general fund, officials would lean on a special reserve fund for the next few years.
The adjustment was estimated to save the district about $48 million in 2026-27.
Gordon, in a letter to district leaders, expressed concern that depleting part of the savings account would cost Sacramento City Unified more in the long run by losing out on interest earnings.
The county superintendent also noted that extending the union contract locks up bargaining through 2030.
School board members and Superintendent Cancy McArn rebuffed county-level concerns, saying the agreement would address immediate cash needs.
“It also allows the district and its largest labor partner to shift their focus away from ongoing negotiations and toward student achievement, staffing stability, program quality and successful fiscal recovery,” according to a statement from district spokesperson Al Goldberg.
Part of a broader plan
District staff identified other savings opportunities in a lengthy 2026-27 fiscal sustainability plan, unanimously approved by the board Thursday.
The list of potential cuts or changes included ending use of Golden 1 Center for high school graduations, more efforts to address chronic absenteeism — attendance levels weigh on state funding amounts — and eliminating a sixth-grade science field trip.
Trustees said they were confident in this new and improved plan to stay out of state receivership.
However, Gordon and other statewide school budget experts found the recovery plan lacking in details and feasibility.
“(The) Board must now adopt immediate, specific, and viable solutions before the district runs out of cash,” Gordon said in a statement Friday.
Trustees try to dodge help
If district leaders do not soon come up with another solution to their budget deficit, they may need to turn to the state Legislature for an emergency loan.
With the aid comes strings, specifically losing board authority to an outside administrator.
Trustees have resisted warnings that, due to the Legislature’s calendar, they may need to act and request that loan as soon as this summer.
Mike Fine, CEO of Fiscal Crisis and Management Assistance Team, said he has seen reluctance from other troubled school boards with which he has worked.
“But not this big,” Fine said. “And not this late.”
Ten districts since 1990 have gone through state receivership. If Sacramento City Unified were to follow suit, they would need the largest loan to date.
