Sacramento City schools ‘running out of cash and ... running out of time,’ board is warned

With a possible teacher strike, an approved motion for layoffs and a potential state takeover looming over the Sacramento City Unified School District, the county superintendent delivered a grim message at a Thursday night school board meeting.

“Your district is running out of cash, and you in the district are running out of time,” David Gordon said.

Gordon and an independent fiscal manager repeated their warnings of an imminent state takeover and what that would look like for the district.

“With insolvency and under a state administrator, all of the cuts you need to make now will still have to be made – and then some,” Gordon said. Because the district would have to make large loan payments to the state to close its budget gap under receivership, the result would be “even greater program cuts” and diminished services to students, he said.

In its audit of Sacramento City Unified late last year, the state-created Fiscal Crisis and Management Assistance Team warned the district that if it failed to address its $35 million deficit, it faces a state takeover in six months. The report said the district was likely to run out of money by November.

Gordon said the board and Superintendent Jorge Aguilar were working to identify cuts, but that the plan is incomplete.

He stressed that the district and its labor groups would have to work together to achieve the level of budget reductions needed. “It’s imperative that all employee groups come to the table now, and be part of the solution to avoid cash insolvency and the need for a state loan,” he said.

FCMAT’s chief executive Mike Fine, who presented his fact-finding report warning the district of insolvency last year, reiterated those sentiments.

“You’re not going to make progress until everyone can sit down and rebuild that relationship that’s been hurt over a long period of time,” he said.

Four of the five labor unions have been working with the district. But the Sacramento City Teachers Association is at odds with the district over its salary adjustment schedule, and has signaled deep mistrust over its labor agreements. Earlier this month, a Sacramento Superior Court judge ordered a return to the arbitration table after negotiations were halted when the district filed a court motion last year.

The district’s budget was disapproved twice last year. If its proposed cuts cannot be met soon, it will need to request a loan from the state – placing it in receivership, Fine said.

The district is expected to present a fiscal recovery plan at its March 7 board meeting,

The Thursday night AB 1200 presentation, named after a law meant to ensure that schools are prepared to meet their financial obligations, called for the parties to pull together.

“You’re about out of time to right this ship, and I can’t say that strongly enough,” Gordon said.

The school board also approved a motion to lay off employees, citing a decline in the number of students in the district. Officials said some schools were overstaffed based on projected enrollment, and reducing staff to match the need is routine.

District officials identified full-time positions in several departments that could be reduced, including vacant positions. About 120 of those positions belonged to K-12 teachers.

While the motion was approved, it was unclear how many teachers will receive pink slips.

Certificated employees will be able to request a hearing if they are given a pink slip. Final layoff notices will be issues before May 15.

Teachers union Vice President Nikki Milevsky said she strongly protested the decision to lay off teachers.

“This is how you balance your budget,” she said. “When you issue pink slips to those new teachers that we worked so hard to recruit, they are going to over to the neighboring districts where they are valued.”

The board meeting came two days after the Sacramento City Teachers Association began collecting votes from its members whether to authorize a potential strike. Polling lasts three weeks; the results then go to the union’s executive board for its own vote. If enough members vote yes, the union may then call for a strike date.

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Sawsan Morrar covers school accountability and culture for The Sacramento Bee. She grew up in Sacramento and is an alumna of UC Berkeley Graduate School of Journalism. She previously freelanced for various publications including The Washington Post, Vice, KQED and Capital Public Radio.