Why is the SFUSD out of funds for air purifiers? First part in a multipart series on the Budget.
Parent and Site Feedback Go to a Black Hole
At agenda item D1 of the May 28, 2019 San Francisco Board of Education (SFBoE) Board Meeting, 6 politely dressed students and parents sat and gave their detailed Community Feedback for the Local Control and Accountability Program (LCAP) Budgeting Process for school year 2019-2020. One item in their written presentation, but not their slides, was a strongly worded concern:
“Consistent Themes: During the past six years of LCAP stakeholder engagement we have consistently heard the following:
Stakeholders continue to have questions about how decisions are made when allocating resources, and asked for more clarity and transparency about these decisions.” (bolding in original)
Figure 1: Screenshot from SFGovTV video recording of May 28, 2019 Board Meeting. Parent volunteers, students, and members of advisory committees present the LCAP findings to the Board of Education
Who makes the decisions on how much money goes where? The parents and site councils did their part of the state-mandated budget dialog. They conducted hundreds of conversations with over a dozen Advisory Committees and Community Based Organizations.
On the other side, the San Francisco Unified School District (SFUSD) staff put answers to the LCAP questions on a piece of paper, then submitted the budget. The effect of that one-way response resembled a saying: “Thanks for all the work. We got it from here.” Such an action may seem incongruous to a body which posts this belief: “Authentic partnerships are essential to achieving our vision for student success.”
2019: 4 new Commissioners
Maybe the 2019 budgeting process would be different with turnover at the SFBoE. Commissioners Alison Collins, Gabriela López won for the first time in November 2018. Commissioner Faauuga Moliga kept the seat that Mayor London Breed gave to him a month before the elections. Commissioner Jenny Lam received Mayor Breed’s appointment in January 2019. These 4 joined sitting Commissioners Mark Sanchez, Stevon Cook, and Rachel Norton.
What does the law say about how the sausage is made? California Education Code is pretty wordy, but, in short, the Superintendent and staff do the budget work. The governing board, the SFBoE, votes on it. Thus, all decisions must meet a majority of the Board’s approval.
For the SFUSD, planning work goes on year round. District staff provide regular updates at the SFBoE Budget and Business Services Committee meetings. In calendar year 2019, that Committee was Moliga, Norton and Chair Collins.
How 2019 was shaping up
Going back a few months to February 2019, Budget staff provided Advisory Committees a slide deck to start their Community conversations. One slide presented the worrisome idea that expenditures were on a multi year trend of outpacing revenues (Figure 2). For 2019-2020, $653 million of unrestricted budget expenditures compared to $49 million less in revenues (numbers changed a bit almost every meeting). Most of this rise of expenditures was due to increases in salary and pensions.
Subsequent slides gave high-level qualitative reassurances that cuts would be limited to the central office. Teacher salary increases and funding for focal population programs would continue as priorities.
Figure 2: Slide from deck from February 2019 by Budget staff for Advisory Committees to share with the public for LCAP discussions. Projected budget gaps expected to be $49 million in 2019 and $47 million in 2020.
A couple months later, Budget staff presented to the public April 30, 2019 Budget Committee meeting a slide of how all the feedback turned to numbers (Figure 3). LCAP recommendations were jumbled in a hopper with Superintendent’s priorities, SFBoE resolutions, compliance, student needs, and other items. After the Budget staff made such choices, any opportunity for public or Commissioner to seek changes was not mentioned. Since budgets were due in Sacramento on July 1 each year, all items would need to be sorted by a late June SFBoE Board Meeting.
Figure 3: Slide from Budget Committee presentation by Budget staff on April 30, 2019. Advisory Committee Recommendations just one of many inputs in budget decisions.
For Revenues, several sources gave numbers that often changed through the planning phase. State and City funds arrived from budget negotiations and oftentimes new bills. Unrestricted funds from City-voter approved PEEF (Public Education Enrichment Fund) added a significant figure in late May. Yet the backup plan to address the gap was always to tap the Rainy Day fund, then a bit over $50 million.
At the next Budget Committee meeting, May 29, the proposed budget updated a few big numbers from the February estimates. It was a good news/ bad news story. 2018 actual expenditures estimated to $592.4 million, much less than the projected $621.7 million. Thus for the current year, the budget looked to be in the black, raising the rainy day fund to $57 million.
Unfortunately continued growth in expenditures meant tapping those reserves for $30.4 million in the 2019 budget. Further, the 2021 projected budget imbalance would turn the rainy day fund into a $8.3 million hole.
Small print on the slide read: “Reductions would be needed to maintain a positive fund balance and meet mandatory designated reserves.” Budget staff sought direction and assistance from the Board Commissioners.
Figure 4: Slide from Budget Committee presentation by Budget staff on May 29, 2019. 2018 Expenditures were lower than budgeted, raising rainy day fund. But that fund was projected to turn negative in 3 years.
That last May meeting was the culmination of all the budget planning. The next step was a presentation to the Board for first reading and feedback. At such a meeting a year prior, several Commissioners asked detailed questions and the staff responded with a 7 page written document. An example from the Q/A:
“Commissioner Mendoza-McDonnell: How do revenue increases compare with the rising costs of pensions?” Response: “… a three-year review of pension costs shows a rise of nearly 2% of overall payroll costs.”
While the Commissioners did not attempt to change the budget, they at least had specific answers to specific questions. No such document was found for 2019, just one for the smaller PEEF budget.
Figure 5: Screenshot from 7 page written response to questions from SFBoE Commissioners for 2018. No such document was posted for 2019.
Budget Chair Collins drops the ball
Perhaps Chair Collins was not paying attention during the presentation of that May 29 budget slide with the plea for expense reductions. Perhaps she was busy with all the contemporary efforts on the George Washington High School Murals and her arts equity resolution (a future newsletter post). Her comments at the June 11, 2019 Board Meeting (Item M), intended as a report on that May 29 Budget meeting, reflected a passive, superficial understanding of the budget:
“I think it highlights where we got an overview of how decisions are made, how they are informed around the larger budget. We also got an overview of a perspective of where we are going based on the state budget. That is always a moving target, but I have heard folks are interested. It was nice because we got a high level view, and I would encourage folks to do presentations that are available and they can go into the board docs. And they can see that online.”
Figure 6: Screenshot from SFGovTV video recording of May 28, 2019 Board Meeting. Budget Chair Collins gave Committee report to the Board.
Board unanimously approves 2019 budget with $23 million draw on Rainy Day fund
A few meetings later on June 25, 2019, the SFBoE voted 6-0 (Norton absent) to approve the budget. The budget imbalance would take the $51.1 million rainy day fund down $23 million to $28.1 million.
For 2019 planning, the parents and school sites were again shut out of budget decisions. The District did remove $2.5 million from the Central Office, yet also added over $2 million in new programs. The SFBoE sought no changes to the District’s plans.
Halfway through that 2019-2020 school year, the COVID-19 pandemic and revenue uncertainty would make budget planning much harder.