Sacramento City Unified may lay off 800 employees amid impending insolvency
In September, former Chief Business Officer Janea Marking described Sacramento City Unified School District’s financial crisis as an impending tsunami. The wave is now crashing down.
The district will cut 136 full-time equivalent central office positions as a result of a budget deficit that is likely to place it into receivership next school year, according to materials released Thursday by the district.
The move to cut Serna Center staffers will save the district a big chunk of change — $23.7 million — but it isn’t enough to save the district from insolvency in the following school year.
Thursday the district board is slated to discuss a report from the Fiscal Crisis and Management Assistance Team, whose leader is recommending that the district borrow money from the state sooner rather than later to prevent a situation in which 5,000 Sacramento City Unified staff members could go unpaid, ceasing school operations.
This month the district board will also consider finalizing lay off notices for 42 teachers, 605 classified employees and 15 preschool employees.
All central office departments will see staffing slashes. The academic office will see the most dramatic cut, going from 273 to 201. The positions cut dealt with early learning, multilingual literacy, college and career readiness and the GATE program.
Many leadership positions have been consolidated or demoted. The chief officers of communications and technology will no longer be a part of the superintendent’s cabinet, becoming deputy superintendents instead.
Insolvency looms
According to FCMAT’s cash flow analysis, there is no hope that the district can stay afloat next year without state intervention. Even with massive layoffs and closing schools, Sacramento City Unified is likely to run out of cash and all borrowing options by February.
Michael Fine, FCMAT’s CEO, will present the board with two options: borrow now or borrow later.
Accepting a loan from the state amounts to receivership — a tragic fate Sacramento’s students of today and the future. Only about 10 districts in California have ever had to endure it. In exchange for the bail out, the Sacramento City Unified School District board would lose local control and interim leaders would make heavy-handed cuts to make sure the district pays back its loan, with interest.
Interim Chief Business Officer Lisa Grant-Dawson says that she has been clear-eyed about this outcome since she came on board in January. The board, however, hasn’t been on the same page, expecting moves from staff that would save them from a nine-digit structural deficit that has been building for years.
“State receivership is not an option,” trustee Taylor Kayatta said at a meeting in February, a sentiment echoed by several fellow board members.
