Oakland News Now Today Blog – SF Bay Area Daily By Zennie62Media: Oakland CA News OaklandBlog, San Francisco, San Jose, East Bay, LA, ATL, USA, World, NFL, Raiders, sports, movies, politics, tech, YouTube, Comic Con, CES
The Oakland Unified School District (OUSD) sent an email entitled “Understanding the Budget, Facing Our Challenges Head On”. It appears below.
Over the past couple of weeks, OUSD staff shared some important presentations to the Board of Education regarding next year’s budget and our overall educational strategies, goals, and progress. This email will share some general background about the budget and Local Control Accountability Plan (LCAP), as well as some information about some challenges in the future.
We want to share some information on:
OUSD’s Budget Development Process;
California’s budgeting process and how it impacts OUSD;
Progress and Appreciation of Fiscal Support;
OUSD’s financial budget Board of Education (BOE) presentation (from June 12 & 22; Click here for presentation and financial forms); and
The Local Control and Accountability Plan (LCAP) BOE (from June 12 & 22; Click here for presentation and full document).
The budget and LCAP presentations are related, but help tell different parts of OUSD’s overall story. The budget presentation focuses on OUSD’s dollars and cents accounting and the LCAP shares more detail about some of OUSD’s key educational strategies and progress.
Facing challenges head on:
OUSD’s adopted budget has two sections: (1) the 2019-20 budget; and (2) the multi-year projection (MYP) which includes the 2020-21 and 2021-22 school years. OUSD’s proposed budget is balanced for next year, but the MYP shows deficit spending of ~$8.7 million for 2020-21 and ~$17 million for the 2021-22 school year.
OUSD staff looked at the MYPs of six California school districts which are comparable to OUSD and/or have recently settled contracts. Four show steeply declining reserves. Like Oakland, unless these four districts take action to address the challenge of essentially flat revenues and increasing costs, this will threaten their fiscal solvency (click here for a brief overview).
The purpose of an MYP is to identify important issues that need to be addressed before it is too late. The MYP makes educated financial projections about the future by:
looking at the available data (e.g., assumptions around enrollment, increases in employee compensation, projected state funding, etc.); and assuming that OUSD programs remain about the same.
MYPs can and do change as more information becomes available and the district makes adjustments throughout the fiscal year. That is why they are updated frequently. MYPs also allow for district leadership and school boards to make proactive decisions in order to support a healthy budget in the future.
We want to be as clear as possible so we can be proactive about meeting the financial challenges ahead. Many other districts in California are facing similar financial issues.
Similarly, a family might look at their college-bound 16 year old and understand that in two years, they may be paying for college. So they might have to make adjustments before college starts in order to fund that family priority.
Why is this happening?
Projecting deficit spending in out years (2020-21 and 2021-22) is not a surprise. At a high level, this is happening because OUSD has:
Flat Revenue: We are projecting our revenue to be relatively flat (about the same). Although OUSD will see small “cost of living” increases, we believe these will be offset by small drops in enrollment.
Increasing Costs: We are also projecting increasing costs. The same key issues remain – special education, benefits, and employee compensation.
Making the necessary adjustments:
Turning back to the family with a college bound 16 year old, the family will likely face a tough financial challenge in two years. They might have to take out loans, work another job, apply for scholarships, or some combination of those options.
In order to offer the same level of educational programs and services in the future, OUSD will have to make the necessary changes. There are many ways to address these challenges for the 2020-21 and 2021-22 school years.
We will likely have to both increase revenue and reduce expenses:
Increase enrollment and attendance (Student attendance drives most of our funding)
Lease property (Leasing vacant properties will create ongoing revenue)
Increase private funding (pursuing additional grants to fund specific priorities)
Increase partnerships with city and county agencies (e.g., partner with agencies performing similar programs)
Become more efficient in our operations
Further reduce expenditures
Use our restricted funds to support our general funds
Over the summer we will continue to improve our financial processes and procedures. In September, we will close the books on the 2018-19 school year. This will give us a clear picture on the final financial outcomes for this year and ultimately impact next year’s budget.
Zennie Abraham is Zennie62Media, Inc. CEO and Zenophon Abraham Zennie62 YouTube Channel vlogger, and creator of Oakland News Now and Zennie62Media's 100-blog network. He's covered the NFL, San Diego Comic Con, The Night of 100 Stars Oscars Party, The NFL Draft, and CES Las Vegas annually more than 10 years. He created Oakland's first true blog, Oakland Focus, and Oakland's first YouTube Partner Channel. Zennie also holds the distinction of forming Oakland's only bid to host the NFL's Super Bowl Game, in 2000 for the 2005 game that Jacksonville won the right to host. He's also the founder of Sports Business Simulations and the creator of The Oakland Baseball Simworld and XFL Simworld.
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