The West Contra Costa Unified School District could soon face up to $30 million in budget cuts or be forced to dip deeply into its reserves to close deficits that surfaced last month in budgets for the current year and next year.
Like nearby Oakland Unified, the district is grappling with uncertain numbers for its 2019-20 budget after its chief business official resigned in May, forcing it to seek help from the county to create its budget report.
The board approved a resolution on July 17 resolving to identify budget cuts by Nov. 30, along with possible “planned and prudent” use of the district’s 6 percent reserve for “fiscal uncertainties” to ensure it will be able to pay all its bills for the next three years without deficit-spending.
But board members Consuelo Lara and Mister Phillips objected, saying they wanted to wait until the newly hired associate superintendent of business services was on board to help guide the process. Lara voted against the resolution and Phillips abstained.
Board member Valerie Cuevas, however, pushed for a sense of urgency, saying one of the board’s primary responsibilities is its fiduciary responsibility over the budget.
“Whatever the circumstances that exist, I will do whatever I can do to ensure that this district remains solvent because failure is not an option,” she said. “We are guaranteed to have kids suffer if we don’t do this work.”
Officials in the West Contra Costa district that includes Richmond and surrounding communities say they won’t really know how much money they may need to cut until they receive a report on actual revenues and expenditures based on the closing of the books for the fiscal year that ended June 30.
After closing 2018-19 with a projected deficit of $9.1 million, the board adopted a 2019-20 budget of $360.7 million in June that did not include any money set aside for vacant positions. Superintendent Matthew Duffy said during the board’s Wednesday night meeting that “all the real salaries” and “all the real costs” would be included when the district presents its updated budget next month.
The budget included raises for teachers and other employees that the board previously approved to help retain and attract staff. To pay for raises that teachers began receiving last year and that were slated to rise each year through 2020, the amount for their salaries increases from $107.3 million in 2018-19 to $110.6 million in 2019-20.
The board has received warnings that its spending was outpacing its revenues.
Bill Clark, associate superintendent of business services for the Contra Costa County Office of Education, told board members last month that they will need to closely watch how far expenditures shoot over the $9 million deficit already projected.
The board’s budget executive summary presented June 12 warned that salary increases in 2019-20 and 2020-21 would “significantly affect” future non-salary expenditures.
“Without significant state revenue increases in the following years, the district may need to take action to reduce salaries and salaried personnel,” according to the summary.
Like Oakland Unified, West Contra Costa is one of the few districts in the state that has fallen under state receivership in the past due to fiscal insolvency that forced it to seek a loan. It repaid that loan several years ago and regained control of its budget, but has struggled to make ends meet after approving class size reductions and raises for teachers and other employees.
It has also seen a turnover in chief business officials, with two each serving only one year after the district’s longtime associate superintendent of business services left in May 2017. Oakland is still paying off its loan and is still under oversight of a trustee who has veto power over budget decisions, but the board and superintendent control the district’s day-to-day operations and budget.
West Contra Costa’s salary and benefits exceed 90 percent of the budget, which is higher than the state average of 85 percent, according to Clark,who helped the district finalize its adopted June budget. At that time, Duffy said he asked for the county’s assistance because he did not feel the district had a clear grasp on why expenses had risen more than expected.
During the budget presentation last month, Clark said the loss of the district’s chief business official can cause a district to get off course, which he saw happening in West Contra Costa. John al-Amin, associate superintendent of business services, resigned in May.
Similarly, Oakland Unified eliminated its chief business official position last spring and its chief financial officer resigned in May, while that district has sought intensive support from the Alameda County Office of Education to help implement best practices in its fiscal department.
Although no fiscal staff members presented an official budget report to the board Wednesday, the district’s principal accountant Gustavo Aguilera raised concerns about the budget during public comment. He encouraged board members to educate themselves about the budget and to ask questions to ensure that students won’t be adversely affected by cuts.
“I know where our budget’s going,” he said. “It doesn’t look good. I hope we all communicate and we work together for the best interests of the children.”
The board also unanimously appointed Tony Wold as its associate superintendent of business services on July 17 with a salary of $215,570 a year. Wold, who was not present at the meeting, has spent the past four years as the assistant superintendent of business services in the Westminster School District in Orange County.
He will oversee the district’s budget control department.
Editor’s Note: As a special project, EdSource is tracking developments this year in the Oakland Unified and West Contra Costa Unified School Districts as a way to illustrate some of the most urgent challenges facing many urban districts in California. West Contra Costa Unified includes Richmond, El Cerrito and several other East Bay communities.