Sac City Unified school district says it will be broke in November 2019

The Sacramento City Unified School District announced Wednesday it expects to run out of cash by November 2019 after months of financial crisis.

In a statement sent to the community, the district said unless major savings are found, it will be unable to pay employees and make necessary purchases.

The statement suggested that moving forward with recent plans to reduce health care costs is the next best step to reach solvency, especially considering it pays more for health care than any other Sacramento-area school district.

At last week’s Dec. 6 Board of Education meeting, four of the district’s five labor unions agreed to work toward trimming health expenses with the district.

The district still needs cooperation from the Sacramento City Teachers Association, which has long been at odds with the district over administrative costs.

SCTA did not sign onto a tentative plan proposed at the board meeting to work with California Education Coalition for Health Care Reform, a nonprofit group that helps districts reduce health care costs. SCTA had already been discussing possible savings with CECHCR last year, but talks between the district and the union have since come to an impasse.

District officials estimate working with CECHCR could save up to $16 million without affecting coverage.

In its statement, the district said it has already found about $19 million in savings in other areas, with $5.4 million coming from removing vacant positions and freezing hiring, $3.8 million from cutting a summer learning program, and $1 million from indefinitely postponing the launch of a new arts initiative.

District spokesman Alex Barrios said the district saved over $1 million under a “use it or cash it out vacation policy.”

The district’s statement said that due to understaffing, many employees have been unable to use vacation time, resulting in large accruals of hours. Barrios said if the district waits to pay out accrued time, it will have to pay at whatever salary level employees are at in the future, which would likely be higher, so paying vacation time now saves money in the long run.

“There has never been a shortage of administrators in Sac City,” SCTA executive director John Borsos said. “There is no reason for people not to have taken vacation except as yet another example of poor fiscal oversight.”

The district also announced that it had offered SCTA three dates this month to meet and continue talks regarding health care savings.

Borsos said the SCTA will have a response soon.

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