SCHOOL BOARD PRESENTATION

The following is the text of my statement to the East Side School Board at its meeting on January 13.

“The East Side Teachers Association urges you not to adopt that portion of the superintendent’s proposal that would bring about the reassignment of librarians and counselors and the unnecessary resultant termination of low-time teachers.

“While we do not represent the fine cadre of Classified staff who work along side of us in this District, we also urge the Board not to rush to action in the termination of these employees as well.

“In 1965 and again in 1973, the governing boards of this District purchased raw land as a hedge against future need. Both of these purchases preceded the final Serrano-Priest court decision, handed down in 1976, establishing new processes for the acquisition and ultimate disposal of real property by public school districts. Therefore both of these property purchases were made with General Fund dollars. They were, in essence, investments made with District resources that could have been otherwise spent.

“Now, the governing board of the District has disposed of a portion of both properties. It is important to note that one of these land sales was forced by the eminent domain process and was not voluntary, and the other land sale was of an excess piece of real property upon which no school facility had ever existed.

“ESTA believes that, under these two differing circumstances, the entire proceeds from both land sales transactions are rightfully mandated to be placed back in the General Fund of the District. We are prepared to seek a Declaratory Relief Action from the Superior Court in this County to obtain the necessary clearance in removing the hurdles to cause this to happen. We ask that the School District join us in this endeavor.

“One impediment to this process has been identified. It appears as if the governing board of this District was provided with faulty legal advice when it was informed that it would be necessary to constitute a so-called 9-11 Committee, and ultimately to declare the Quimby Road excess property as “surplus” prior to its sale. That property should not have been declared surplus, inasmuch as it had never been built upon nor occupied with a district facility. It may be expedient now for this Board to rescind that action.

“Together, the proceeds from these two property sales approach seventeen million dollars. A significant portion, even the majority, of those funds remain unspent and unencumbered at this time. We urge the Board not to proceed with the proposals for reassignment of personnel until this matter can be adjudicated.

“Apart from the land sales proceeds matter, there remain other significant questions regarding the actual financial condition of the District. For example: In the Unaudited Actuals of the District, submitted to the State at the close of the 2003/04 fiscal year, it was revealed that East Side spent approximately $7.0 million general fund dollars on “Books and Supplies”. Of that amount, approximately $1.4 million was unrestricted general fund funding, and the remaining $5.6 million was restricted general fund.

“Prior even to the release of the Unaudited Actuals, the Board adopted a budget for the current year in June, 2004, that projected a $9.3 million expenditure for this same “Books and Supplies” category. This represents nearly $2.3 million more budgeted to be spent in the current fiscal year than was actually expended in the previous fiscal year.

“Furthermore, in a document released as a part of the First Interim Report in mid-December of 2004, the total projected budgeted amount in this particular category had swelled to nearly $16 million.

Books and Supplies (object codes 4000-4999)

Document	Unrestricted	Restricted	Total
Unaudited Actuals for 2003/04 year	1,392,265	5,590,837	6,983,102
Adopted Budget for 2004/05 year	1,517,607	7.805,875	9,323,482
First Interim for 2004/05 year	2,801,701	13,035,548	15,837,249

“Does the District believe that, in light of the revelations regarding imminent insolvency, that budgeting 227% in expenditures for this category from last year to this is prudent? Questions have been raised at Budget Task Force meetings about this seeming inconsistency, but no satisfactory answers have been provided. This is but one of a number of unresolved issues.

“I need not point out to the Board the wildly different succession of values in a dozen or more summaries of the projected District general fund ending balance plus reserve to which we have been subjected in the past eight months. What is the real number?

“Even something so apparently simple as the projected savings to be had by reassigning librarians and counselors has shrunk by $200,000 or 29%, in one month’s time.

Proposed Cost Reductions due to Personnel Reassignment

Proposal

Date

50% Librarian

reduction

10 Counselor

reduction

Total Projected

Savings

December, 2004

255,000

425,000

680,000

January, 2005

180,000

300,000

480,000

“The wild fluctuation of numbers is bewildering and confusing, and contributes mightily to skepticism regarding the true plight of this district finances. Coupled with the distinct possibility that the entire $17 million in land sales proceeds will be found to appropriately placed in the general fund, I will close my remarks tonight by once again pleading with the Board not to implement the reassignment of Librarians and Counselors until more clarity is available in the financial picture of the District.”

At the conclusion of my remarks, a succession of other people rose to address the school board on the topic of the cuts proposed by the superintendent. All to no avail. Upon a motion made by Craig Mann, and seconded by Manuel Herrera, the Board voted 3-2 to adopt the full proposal of budget cuts for the current year made by the superintendent. Patricia Martinez-Roach and Lan Nguyen were the dissenting votes.

Prior to the vote, Herrera announced that, in recent days, two additional expense items had been identified by District financiers that would affect the bottom line of the current year’s budget in a negative way. The first of these was acknowledgement of a misplaced decimal point in what was earlier identified as undiscovered income. (This reduced the sum from some $1.8 million down to $180k, a difference of around $1.6m). I was so angry after hearing that report that I failed to write down the second amount, or its source. What does it matter, really? We might as well be reading tea leaves.

RETIREES

The $2,000 “door prize” offered to those certificated district employees who agreed to notify the District of their plans to retire at the end of this year drew 33 responses from ESTA members. This number falls one short of the number of ESTA members who retired at the end of the 2003/2004 school year. The deadline for qualifying for the $2k has passed, although there may still be additional persons opting for retirement.

STRS PRESENTATIONS

The first two of three presentations planned by STRS at the Mt. Hamilton Council CTA building have occurred with excellent attendance. A third presentation, entitled “CalSTRS Retirement Checkup” has been planned for February 9. The workshops have been open to teachers in any of the eight CTA Chapters comprising the Mt. Hamilton Council. Unfortunately, the number of signups for this third meeting has resulted in our having to close it to additional attendance.

However, we have been able to secure the STRS presenter to repeat the “Retirement Checkup” workshop on Wednesday, March 16. First priority will be given to those teachers who attempted to register for the 2/9 session, but who were turned away after it filled. Limited additional space is available. The content is geared towards those people who are 50+ years of age, or who have 25 years or more in the CalSTRS system. We will provide detailed information on the retirement process, including: retirement options, Defined Benefit Supplement funds, partial lump sum and distribution.

Call Lori or Ly at 272-0601 to obtain registration info.

STRS IN TROUBLE?

An occasional news report has left some people with the impression that Cal STRS is on the brink of collapse and the inability to fulfill its obligations to current and future retirees. Let me be one of the many to point out that this is alarmist in nature and simply untrue.

One newspaper asserted in print that STRS was currently funded at only 82% of its future obligations. CTA Board Member Bob Nichols points out that the only time STRS was ever been “fully funded” was in the early 1990’s at the height of a boom period in the stock market. The STRS Board is carefully studying the current problem, and CTA (along with other groups) has urged the Board to avoid precipitate action. This is a long term problem, not an immediate crisis.

At present, STRS is a “defined benefit” pension plan. This means that pensions are the result of a specific formula based upon one’s age, length of service, and income at the time of retirement. Any shortfall of the ability of STRS to meet its obligations would be made good by the State of California.

In his State of the State speech, Gov. Schwartz-reneger mentioned his goal of converting STRS from a defined benefits pension plan to a defined contribution plan. Such a conversion would make the CalSTRS system appear more 401(k)-like, resulting in future pensions being dependent upon the whims and vagaries of the stock market. Under such a plan, one’s retirement income could never be exactly calculated. A full discussion of the potential benefits or drawbacks of that sort of pension plan will have to wait for a future Update. In any case, Arnold’s proposal would only affect teachers new to the CalSTRS system after 2007.

EVERGREEN UNIFICATION

For some time, efforts have been being made by a group of parents with children in the Evergreen Elementary School District to unify that district. Such a move, if successful, would bring about the loss of both Silver Creek and Evergreen Valley High Schools from the ESUHSD, and make them a part of a new K-12 district, perhaps named “Evergreen Unified School District”.

The group pushing for this move appears to be motivated, well-funded, and committed. Assorted folks within that group are also exploring other approaches to wresting away two of our high schools, if the unification idea fails.

A spokesperson for the unification group addressed the January 13 meeting of the East Side School Board, in an un-agendized presentation, speaking briefly of the campaign. He stated that it would be necessary for the ESUHSD to dissolve itself as a part of the moves towards Evergreen unification.

There are any number of problematic realities to such a move. Among these are the differing salary schedules and lengths of the work year in the two school districts, the questions of seniority transfer and whether current SCHS and EVHS teachers would automatically be hired by the new unified Evergreen district, as well as a pitfall regarding the Trust currently providing Evergreen teachers with medical benefits that requires a 15 year period for members to become vested.

The rationale being voiced by the promoters of unification includes fears that high-achieving students in several Evergreen School District neighborhoods will suffer academically if they are forced to attend East Side schools.

From my perspective, the eventual outcome of a successful unification of Evergreen would be the likelihood that other neighborhoods and feeder districts to ESUHSD would follow suit. We could be talking about the Oak Grove Unified SD, the Berryessa Unified SD, and other balkanization of East Side within a space of a few years. What may remain behind would be the central core of our current high school district, with the fringes being cherry-picked in moves that would leave a significant ethnic and racial imbalance in the wake.

The Mt. Hamilton UniServ Council, composed of teachers from East Side, Evergreen, Alum Rock, Franklin-McKinley, Berryessa, Mt. Pleasant, Milpitas, and Orchard School Districts, voted unanimously to condemn any move to unify Evergreen at its meeting on January 13.

BUDGET TASK FORCE

Even if the District places the entire proceeds from the sale of property into the General Fund, there exists at least in the mind of the school board the nagging notion that this District has gotten into an annual pattern of spending more money that it takes in. One-time money from property sales will only, at best, forestall future problems unless this trend is corrected. As a means of examining potential cuts for next school year, the school board has convened a Budget Task Force to make recommendations, by late April or early May, to affect the budget adoption process for 2005/06. Three nights of “stakeholder presentations” are scheduled for January 27, February 1, and February 3, beginning at 6:00 p.m. These meetings are to take place in Cougar Hall at EVHS. Watch your email for more details.