Oakland Unified’s journey: When the state stepped in, ‘we lost all local control’

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What’s in Sac City Unified’s future? Oakland may provide a clue

A possible state takeover is looming for Sacramento City Unified School District. Nearby Oakland Unified went into receivership in 2003. Here’s what happened, and how the story is still unfolding.

Sacramento City Unified School District is scrambling to plug a $35 million budget hole, with a possible state takeover looming if it can’t balance its books by June. Nearby Oakland Unified went into receivership in 2003, one of only nine California districts since 1990 to declare insolvency and submit to state control. Here’s what happened, and how the story is still unfolding.

Like Sacramento City Unified, Oakland had been warned. The state said as early as 1999 that a financial crisis was looming.

The district nonetheless was unprepared.

In spring 2003, Oakland Unified School District Superintendent Dennis Chaconas announced that a giant budget hole had appeared, masked by problems with a new computer program.

Administrators scrambled to fill the sudden chasm, which turned out to be $35 million. They approved $17 million in cuts and laid off nearly 600 teachers, counselors and supporting staff.

It wasn’t enough. By June 2003, the state had taken over. It extended an emergency line of credit up to $100 million – the largest school district bailout in California history.

What followed was a long and complicated journey. But one theme voiced by many in Oakland Unified was that the state acted as a “colonizing force” that took draconian measures such as closing schools.

Some also say they aren’t convinced the state makes better financial decisions than the local officials stripped of control.

School closures, pay cuts, layoffs

Right off the bat, Chaconas was fired, and the state brought in Randy Ward as administrator. He had resuscitated Los Angeles’ Compton Unified and returned it to independence from 1996 to 2003.

He also was “notorious” for his cuts, said David Kakishiba, former Oakland school board member.

Ward instituted staff furloughs, and by fall, the teachers union agreed to a 4 percent salary reduction.

Also under Ward’s leadership, five schools closed, and more than 30 custodial positions were eliminated, along with several administrators, counselors and food service employees.

At one point, Ward considered auctioning off the district’s historic headquarters building – on the advice, some community activists contend, of then-state Superintendent of Schools Jack O’Connell.

“It sent a clear political message out to the Oakland powers that he wasn’t messing around. He was going to win by cutting the workforce,” said Kakishiba.

Kakishiba said enrollment had declined only slightly from 55,000 in 2002, and that Ward’s plan to shutter more schools was too aggressive.

Trish Gorham was a labor negotiator and teacher at Washington Elementary School, which Ward closed in 2005, its centennial year.

“I was teaching students of my previous students,” Gorham said. “It was a churn of uncertainty and chaos. They were threatening to close the school, then said they think they will close it, so many students just didn’t come back.”

The closure was attributed to declining enrollment, but the campus immediately reopened as a new K-8 school with a new name, which didn’t sit well with families. Its middle school eventually closed as well.


Why we reported this story

Sacramento City Unified School District is in crisis, swimming in red ink and racing to balance its budget under threat of a state takeover.

Officials from the Sacramento County Office of Education and the Fiscal Crisis Management Assistance Team, the state-created financial adviser for schools, have repeatedly warned Sacramento City Unified of the harsh consequences when a district cedes local control to an administrator. We wanted to get a better picture of what a state takeover would mean, from the perspective of a nearby district where the process is ongoing: Oakland Unified.

Read more by clicking the arrow in the upper right.

How we did it

Oakland Unified School District entered receivership in 2003 and has not yet regained full autonomy. We researched and constructed a timeline of events. We talked to students, families, teachers, administrators and other officials from Oakland Unified who experienced the state takeover. We also gathered data about the cities and school districts to show how they compare.

Read complete coverage of the Sacramento City Unified crisis and teachers’ strikes here.

“In 2007 when I joined the district four years into the state administration, there was still tremendous animosity and hostility,” said Troy Flint, former spokesman for Oakland Unified and current spokesman for the California School Board Association.

“At the risk of being melodramatic, people considered the state to be sort of an occupying force or a colonizer,” he said.

Enrollment plunged (though it has fluctuated considerably since). Teachers and after-school providers fought to keep their schools open. Several campuses were able to buy more time.

“(Ward) took over everything the minute he got here,” said Hutchinson, who is now running for school board in Oakland. In 2003, he ran an after-school program at Maxwell Park Elementary, which closed in 2012. “We thought he would just have oversight over the district’s finances, but he took over everything. We lost all local control.”

Some autonomy returned

The district spent six years in receivership. “It was six years of being like chickens running without any heads,” said Kakishiba.

It regained some autonomy in 2009, when a trustee took the place of the administrator, returning powers to the board of education.

But in Oakland, recovery attempts were severely hobbled by the Great Recession. Schools that had survived Ward’s closures began to shut down in another wave of massive cuts. Enrollment took a deep dive.

“We suffered losses in revenue that dwarfed what we had to go through with the state loan,” Kakishiba said.

As recently as January, 24 more schools faced possible closure or reconsolidation until a teachers strike brought a short moratorium.

FILE - In this Thursday, Feb. 21, 2019 file photo, teachers, students and supporters rally at Frank Ogawa Plaza in front of City Hall in Oakland, Calif. Teachers in Oakland are preparing to strike for a third day after negotiations with the school district broke down over the weekend. (AP Photo/Jeff Chiu, File) Jeff Chiu AP file

Ward left the district in 2006.

His final act at Oakland Unified was to draw down the last $35 million of the state line of credit, which the board – with little power – voted against. Kakishiba said O’Connell directed him to do so.

The credit line differed from the fixed loan usually made to school districts in distress. The district could borrow up to $100 million but was obligated to use no more than it needed to balance its budget.

“There was no economic distress that justified it,” said Kakishiba. “The state is not any smarter or any more disciplined than any of us in this situation.”

The Sacramento Bee was unable to reach Ward for comment.

Leadership has remained unstable at the top of Oakland Unified. Eight superintendents have walked in and out the door during receivership.

Long after the most pressing years of the budget crisis, Kakishiba said he isn’t convinced that state intervention is a solution, because administrators often make serious financial missteps.

“A takeover should have an alarm clock,” he said. “It should not last more than two years.”

Errors with significant budget impact haven’t ended under state leadership. Last year, reports by the Financial Crisis and Management Assistance Team, a state-created financial adviser for school districts, stated that Oakland Unified can’t produce accurate reports on finances, and that the district has an unsustainable spending problem.

The current state-appointed trustee for the district, Chris Learned, provides fiscal oversight. He and FCMAT said they don’t believe the inaccuracies were intentional. Rather, they said, the district thought it had more money than it did because it did not employ basic accounting practices.

“Having a state trustee is no guarantee that errors are not made,” Gorham said, “If oversight did not happen, what is the trustee for?”

Oakland Unified has not made a dent in its debt. It still owes about $33 million – roughly the same as its initial budget shortfall. It won’t pay off its loan until 2026.

What changed in Oakland?

In Oakland Unified, receivership ushered in an era of instability. While the district saw some gains in academic performance, the message from all sides is that stakeholders lost much of their voice.

Educators in Oakland said any benefits of the state takeover are difficult to pinpoint because the upheaval was accompanied by an environment of constant change, in which alternatives to traditional school models took root.

For example, Kakishiba pointed to the “small school movement,” a grassroots effort that broke up large schools into smaller educational settings on the same campus.

Before the state takeover, many schools in the Oakland flatlands were already seriously under-resourced, said Kakishiba. The small school movement, implemented from 2003-07, helped curb high school dropout rates and closed the gap between students in the flatlands and the hills.

But the lingering budget crisis, continuing drops in enrollment, and little improvement in test scores prompted district leaders to revisit the experiment, and schools were reconsolidated.

East Oakland School of the Arts, where Ghatala taught, closed in 2013. The school and three others on its campus became Castlemont High School.

Charter schools also popped up throughout the city.

Oakland Unified has the highest concentration of charter schools in California – which has more charter schools than any other state.

“You see a loss of confidence in the institution,” said elementary school Principal Peter VanTassel, an Oakland native who joined the district in 2003. “We saw families flocking to charters with the inaccurate belief that there was more stability.”

Just before the start of receivership, the district had 10 charter campuses. From the 2003 state takeover to the 2009 transition to a trustee, charter schools proliferated.

Today, Oakland Unified has 45 charter schools, 35 authorized by the district. The remaining 10 are independent charters. About 30 percent of the district’s entire student body attends charter schools, according to the California Department of Education.

Roughly 80 percent of school-age children in Oakland attend public schools in the district -- public or charter -- according to the district. The remaining students are in private schools, in independent study or in neighboring districts.

Overall, the number of high performing schools increased in the district, particularly in the flatlands, after the state took over, said Flint. In 1999, more than 40 schools had extremely poor Academic Performance Index scores (lower than 500), but in 2009 only six schools scored that low.

“It’s still below where anyone should want our students to be,” Flint said. “The goal should be to achieve those gains for students to provide better support and services for students organically working with community without an outside entity having to come in.”

But with those advances, Flint said he wouldn’t call a state takeover beneficial.

The process is important, and changes to an institution can become too disruptive for students and the community, he said.

“People need to feel heard, they need to feel valued, they need to feel a part of the process and there needs to be a respect for people’s experience, their history and their culture,” he said. “I think as part of state administration we weren’t always sensitive enough to that.”

Follow more of our reporting on Sacramento City Unified in Crisis

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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.