OUSD Budget Update

The road ahead...

This year GO launched a Budgeting For Impact campaign to engage our network about the current fiscal challenges facing OUSD and the best practices that can be adopted to improve the district’s finances.

 

On May 7th, from 2-8pm the OUSD School Board will hold an open meeting retreat to discuss the current status of the 2017-2018 budget and the plans for the 2018-2019 budget.  We see the board’s retreat as an important opportunity to further support OUSD’s commitment to fiscal vitality. We encourage our network to stay engaged in the important topics that will be discussed at this meeting, and to reach out to your school board members to advocate that this retreat accomplish the following:

 

(1) Re-establishing community trust and confidence in OUSD budgeting,

(2) Continue building the organizational foundation for fiscal vitality, and

(3) Ensure strategic alignment of budget to positive impact for students.

 

Within these three goal areas, GO has identified and is advocating for the following nine priorities for board and staff to address during the budgeting process:

 

Re-Establish Community Trust & Confidence in OUSD Budgeting

  • Ensure no mid-year cuts for the 18-19 school year.  The top concern of our network is that school sites are not disrupted for a third year straight with mid-year cuts. Each of the last two years, OUSD has discovered overspending of ~$6 million (2015-16) and ~$9 million (2016-17) which contributed heavily to mid-year cuts.
    • Anticipate Actual Costs & Cost Increases.  Fully anticipate actual cost of items with historic overages, i.e. SPED, ECE, Nutritional Services, as well as items with increasing costs, e.g. pension contributions, SPED costs, potential salary increases from collective bargaining.
    • Set aside discretionary dollars beyond setting 3% reserve goal. Set aside ~$5M of discretionary funds for 2018-19 beyond the 3% reserve goal to ensure overages or unexpected expenses don’t reduce the reserve or lead to mid-year cuts.  If these discretionary dollars are unspent in 2018-19, invest them in OUSD’s longer-term goal of a 5% reserve.
  • Set & meet goals for restoring critical funds to appropriate levels to avoid state receivership.  Articulate funding level goals for this fiscal year and beyond for critical funds, including but not limited to: Self-Insurance fund, Reserve for Economic Uncertainty, and the Health Benefits Governing Board Reserve.  Allocate resources for 2018-19 accordingly.
  • Address community concerns about classified supervisors’ and administrators’ salaries.  Based on financial information posted by the California Department of Education, OUSD spent $952 per ADA on this category in 2016-17, which was 675% of the average Californian district. If OUSD spent at the average per ADA level for all districts if would mean a reduction of about $28 million in this category. The board and staff should broadly communicate answers to the following questions when addressing this issue:
    • Is Oakland Unified simply classifying these expenditures differently from other districts? If so, do we have a good reason for the differing classification, which is confusing to community members examining public data?
    • If this is not a classification issue, what is the justification for Oakland Unified’s disproportional investment in this area? What impact on students do we expect these expenditures to have?
    • If there is not adequate justification, then what are the necessary steps and timeline to correct and better allocate our limited resources?

Build the organizational foundation for fiscal vitality

  • Appropriately staff the finance department. Ensure that OUSD’s new Chief Business Officer and Chief Finance Officer have the the right positions filled and are building staff capacity to do their 2018-19 work, including fully resourcing necessary implementation of the district’s FCMAT findings resolution plan.
  • Implement recently adopted board policies with fidelity.  Key new policies include reserve policy, zero-based budgeting practices, structurally balanced budget policy, and improved budget presentation guidelines.
  • Invest in necessary infrastructure.  Be clear what investment remains to be made to improve financial management infrastructure and relevant communications, and invest accordingly.
  • Articulate approach to strategic compensation. The district should have a clear, fiscally-responsible approach to bargaining with labor partners and should communicate that approach more transparently with employees and the community to build understanding.

 

Ensure Strategic Alignment to Positive Student Impact

  • Align priority investments to strategic planning and Superintendent’s work plan. The budget should support Superintendent Johnson-Trammell’s work plan and the development or refresh of OUSD’s strategic plan.
  • Align resources to support Blueprint Process recommendations. The 2018-19 budget should align to the Blueprint process and answer the following questions:  
    • If school communities will be undergoing transitions (mergers, consolidations, etc.) in the coming year, what supports will they receive and how will they be funded?
    • How is the 2018-19 budget informed by the “cost of quality” discussions during the Blueprint process?
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