The San Dieguito Union High School District projected a $9.2 million deficit at its March board meeting. At the May board meeting, the projected deficit was recalculated at about $8.5 million.
Some might consider that a positive trend. But $8.5 million in the hole is nothing to smile about, with less that two months left until the end of the fiscal year, on June 30.
In March, SDUHSD superintendent Eric Dill expressed confidence that revenue will grow by the time the books are closed.
To support his hopeful outlook, he pointed to last year when a $2 million deficit turned into a $4 million surplus.
But, as the saying goes, “Hope is not a plan.”
Complicating the situation further, the district showed projected reserves dwindling fast – from 12.2 percent in 2016-2017, to 8.8 percent in 2017-2018, to 4.9 percent in 2018-2019, to 3.3 percent in 2019-2020.
“Multi-year deficit spending continues to erode the reserves,” Dill wrote in his March 9 board report.
Then there’s that pesky pension problem.
The troubled California State Teachers Retirement System (CalSTRS) is demanding increased pension contributions from school districts to stay afloat.
According to the San Diego Union-Tribune, school districts were required to provide 8.25 percent of teacher salaries in 2013-2014 to CalSTRS, and that number is projected to go up to 19.1 percent by 2020-2021.
The California Public Employees Retirement System (CalPERS), which manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families, is in no better shape.
School districts can be expected to increase their contributions in coming years to CalPERS as well.
According to the California School Boards Association, the new projected rate for 2020-2021 approaches 24.9 percent, with a top rate of 28.2 percent in 2023-2024.
This brings us back to that $6.5 million annual expense for 12.5 percent district-wide salary increases, approved by a 3-2 board in late 2015 and early 2016, discussed last week.
In email conversations at the time the contract was up for approval, Bob Croft, head of the San Dieguito Faculty Association (teachers union), wrote, “Our new contractual agreement provides the financial security, health benefits, and contractual language stability that our members deserve.
“This agreement also provides the budget certainty and security for our district’s future. I can only speak with great confidence that San Dieguito’s educators have very much earned every aspect of this new agreement.”
“It provides budget stability,” said then Superintendent Rick Schmitt. “Our community has supported our employees over the years.”
To justify the raises, the district emphasized that teachers have not received a “master contract raise” since 2007. The wording is important.
Although it’s true that there has not been a contract raise in years, teachers receive salary increases annually based on what’s called step-and-column adjustments, given for longevity and educational credentials. These step-and-column raises occur yearly regardless of whether there’s a change in the contract.
Annual step-and-column increases float between $850,000 and $950,000, according to Dill. He estimated about $250,000 per year for column increases when we spoke last year.
As discussed before, a first-year teacher at Step 1 and Column 1 before the contract change would earn $42,545 for a standard 186-day work year.
Add in a $1,000 stipend for the required English learner credential, $11,000 from a flexible health spending account transferred into salary, and the 12.5 percent raise.
So in one year’s time, that teacher’s salary goes from $42,545 to $61,573 – and that’s excluding any step-and-column raise.
Square all this with Dill’s comment about the deficit at the March 9 meeting: “We need to hold tight on expenditures.”
Last year Del Mar resident Michael Robertson filed a complaint about the teachers’ contract to the state’s Public Employment Relations Board, claiming insufficient time was provided for public review of the proposed labor contract.
It’s a reasonable claim, given that the contract was first posted on the district website late in the day on Dec. 16, 2015, for a board vote to take place the next day.
That gave the public less than 24 hours to review the document – assuming the public even knew it was there to review.
His complaint was denied, as Robertson expected.
“It’s long odds because the system is rigged,” he said. ”The people judging my complaint are union sympathizers.”
He appealed the decision. Although Robertson’s tenacity is legendary, his challenge failed.
“This makes a mockery of the entire process,” he said, adding that the principles of open government are violated when the public is given less than one day to review such an important document.
Schmitt did attempt to post the proposed contract early, but SDFA union president Croft refused to ask his members to ratify the agreement until the day before the board meeting.
The district, by advice of counsel, was told the document could not be made public until the union approved it.
“It is nonsense that a public document cannot be made public unless the union ratifies it,” said attorney and education activist Sally Smith. “The board failed in its fiduciary duty to the people by hiding the contract.”
Smith cited Government Code 3547 which states in part: “Meeting and negotiating shall not take place on any proposal until a reasonable time has elapsed after the submission of the proposal to enable the public to become informed and the public has the opportunity to express itself regarding the proposal at a meeting of the public school employer.”
SDUHSD Associate Superintendent of Human Resources Torrie Norton said the district was forced to delay posting the contract until it was ratified by a majority of union members “to allow more teachers the chance to vote.”
Said Croft, “The SDFA Executive Board decided to allow an extended time in which our members may submit their ballots on the new agreement.”
But by delaying the deadline for teachers to vote, the public was effectively denied the opportunity to review the contract.
And it’s not like there was any dissension among teachers – it was a done deal, and a great deal which was ratified overwhelmingly by union members.
Responded Croft at the time: “With the district deciding on the delay – not SDFA – why wouldn’t SDFA then want to take advantage of that opportunity to ensure our membership had additional time to submit their ballots? SDFA’s Executive Board most certainly wanted to do our best, given the circumstance, to allow as many members as possible to submit ballots and have their voices heard. I believe that is simply SDFA working to meet the needs of our members.”
It’s clear the public was not given sufficient time to review the contract, one that was in serious need of public scrutiny given the startling size of the salary increases.
When board members Joyce Dalessandro, Beth Hergesheimer and Amy Herman voted in favor of this labor contract, they also voted in favor of secrecy and against public disclosure. Transparency and open government took a big hit that night, as did the district’s bottom line.
Nevertheless, the November 2016 election saw voters reaffirm their faith in Dalessandro and Hergesheimer by re-electing them – indicating taxpayers are comfortable with their positions on fiscal issues.
Still, this rosy optimism seems unwarranted and feels more like a head-in-the-sand approach to governance.
Trustees have three primary duties: to hire and review the superintendent, to enact policies, and to ensure fiscal solvency for decades to come, not just until their next election.
In a May 12 San Diego Union-Tribune article, Calif. Gov. Jerry Brown is quoted as saying, “[T]he economic recovery is not going to last forever … We don’t live in a world of straight-line revenues that go higher every year.”
There are serious financial issues facing San Dieguito because of the contract approval, escalating pension costs and declining reserves. Ignoring these problems does not make them disappear.
Voters decided last November that the status quo is what they wanted. So be it.
Let’s hope things go well. Then again, hope is not a plan.
Opinion columnist and Senior Education Writer Marsha Sutton can be reached at firstname.lastname@example.org.