The county schools superintendent took the unprecedented step of rejecting Sacramento City Unified School District’s budget because some funds expected to renew in 2018-19 had actually expired, and some costs had increased, resulting in a $22 million shortfall, according to data presented at a district board meeting on Thursday.
John Quinto, the district’s chief business officer, explained at the meeting that between March, when the district certified that it would meet the state’s 2 percent reserve requirement for the next two years, and July, just after the now-defunct budget was proposed by the district, a $22,068,043.71 hole appeared as non-renewable grants and one-time funds that had been listed as a placeholder on the budget expired, and some costs went up.
Some of those non-renewable grants would have been put to student and faculty programs, ranging from youth development services to teacher induction programs, Quinto said.
Sacramento City Unified spokesman Alex Barrios said Friday it was difficult to anticipate the impact of expired or non-renewed grants, calling the district’s budget a “fluid” one that depends on many different grant funds.
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“At different times during the year, you’re getting letters from different agencies telling you whether you’re getting funding or not,” Barrios said. “They don’t all come at the same time, which makes it so hard to predict these things.”
Barrios said that in previous years, the district could pull from a then-healthy reserve fund if grants didn’t come through. Compensation increases resulting from last November’s deal with the teachers union have cut into reserves, he said.
“We were told we were in the best financial position in history,” Barrios said, referring to comments he said the teachers union made ahead of the deal reached in early November. “We were bombarded with emails and other communication because the teachers union was telling people, ‘The district has too much money. Tell them to spend it.’ ... So if there was any doubt a year ago, when we said we need to maintain reserve to pay for uncertainty, hopefully this is clear now.”
The district still must discontinue the practice of deficit spending to maintain healthier budgeting practices, Barrios said.
“This is why you should not use one-time funds to pay for ongoing expenses,” Barrios said. “Because you can’t rely on them.”
The district will attempt to craft a new budget before its Oct. 8 deadline along with Terri Ryland, a fiscal adviser appointed to the district by the county superintendent, in accordance with a three-step process Quinto outlined at Thursday’s meeting.
First, the district will review the proposed budget to identify the accuracy of information; then it will determine a target dollar amount of cuts that need to be made to draw up a solvent budget; and finally it will look into cost-saving options with labor partners and other stakeholders, Quinto said.
District Superintendent Jorge Aguilar said that although the board has a significant task ahead of it in proposing a new budget, he also viewed it as an opportunity to improve structural processes.
“The reality is that I think that we have depended too heavily on grants and one-time funds, and this will give us the opportunity begin to prioritize what are the programs that our students need, then protect, build a fencepost around those,” Aguilar said, although he did yet not know what programs were facing possible cuts.
David Fisher, president of the Sacramento City Teacher’s Association, which released a budget cut proposal in response to the disapproval on Sept. 13, spoke out against what he called administrative bloat.
“Just looking at the budget,” Fisher said, “we have questions about why percentage increases sometimes in the millions (of dollars) in certain departments happened, and well, let’s look closely at that and look at administration before we talk about cutting close to the kids.”
The district Board of Education plans to vote on a new budget at their next meeting on Oct. 4, Quinto said, but added that there will be no guarantee that the county Board of Education will accept it.
A previous version of this story misidentified the appointment of the fiscal adviser.