Sacramento City Unified’s revised budget rejected once again as reserves ‘fall short’

Sacramento City Unified School District’s revised 2019-20 budget has been disapproved by the county Office of Education, district officials said Wednesday – the latest in a long string of such rejections.

County schools officials last month disapproved Sacramento City Unified’s adopted budget because the district — although making “considerable progress towards stabilizing the budget” — fell short of meeting its minimum reserve requirement by $27 million in 2021-22.

The county asked the district to revise and resubmit its spending plan by Oct 8. But the revised budget did not pass muster, according to an Oct. 10 letter from county schools Superintendent David Gordon.

According to the county’s review, the district will meet its minimum reserve requirement for the current and next fiscal year, but will “fall short” in 2021-22, with a negative fund balance of $7.4 million, Gordon said in his letter.

School districts are required to have a minimum reserve two years in advance, including the 2021-22 fiscal year.

Gordon said the district has until Dec. 31 to balance its budget, and reverse its deficit spending. He recommended making cuts immediately.

Sacramento City Unified has failed to win county approval for any of its budgets since a wide deficit opened in August 2018 and threw the district into financial crisis. A threat of state takeover loomed earlier this year for while the district was expected to run out of cash this fall. But officials were able to put off applying for an emergency state loan – buying time to achieve permanent savings through negotiations with its teachers union.

However, the district and the Sacramento City Teachers Association have been warring during that time, with the union staging a one-day strike April 11 for the first time in 30 years.

A major point of contention has been how to lower the amount spent on health insurance coverage. The district says putting less costly health plans on the table is one of the remaining ways to save money. The teachers union has made alternate proposals including cutting administrator salaries and wants to divert any budget savings to classrooms.

In his September letter to the district, Gordon said that labor negotiations between the district and all bargaining unites were “crucial to turning the district around.”

“We have been doing everything we can to protect our students from budget cuts,” read a statement from the district. “However, until all labor partners come to the bargaining table ready to discuss negotiated budget reductions, we will continue to face budget challenges. The District agrees with Superintendent Gordon encouraging all labor partners to immediately accelerate the negotiations process so that all possible savings to the budget can be realized”

On Thursday, the union stood behind its proposals. “In June SCTA representatives met with the District, SCOE and state superintendent Tony Thurmond and presented comprehensive, long-term budget solutions that would also serve to further reduce class sizes and improve services to students,” the union said in an email to The Bee.

“But rather than respond, Superintendent (Jorge) Aguilar and Board President (Jessie) Ryan, with the support of SCOE, have continued to protect bureaucratic bloat and excuse fiscal mismanagement to the detriment of the district’s students. Rather than repeat the same mistakes, the district’s leadership should embrace our solutions.”

Gordon said that following the meeting with Thurmond, the teachers union presented Gordon with a number of questions about the budget, and Gordon answered their questions.

The district filed an unfair practice charge in March with the California Public Employment Relations Board against the teachers union, alleging that the union had failed to respond to requests to schedule negotiation dates. PERB allowed the complaint to move forward on Oct. 4, and plans to bring both parties together in an attempt to resolve the dispute.

The teachers union said it has offered to meet with the district “around the clock” to address the staffing crisis and other major issues., but that the district rejected those offers.

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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.