Beyond the Blackboard

CUSD to Patch: Public Records Request will Cost $269,000

This from Jenna Chandler at the Capistrano Patch site:

I learned firsthand last week that the cost of getting public information from the Capistrano Unified School District comes with a big price—$269,064.95.

I believe that this over-the-top price tag is the latest in a series of moves to deter Patch from learning how the school board enacted restorations of teacher salaries and school days and what message the district wanted the public to hear about those restorations.

It would take 3,272.50 hours at a cost of $82.22 hourly to retrieve the copies of the communications Patch is attempting to obtain between district staffers, trustees, Teamsters, unions, etc., since December about the restoration, district spokesman Marcus Walton wrote in an e-mail to Patch on March 9. Walton said that because the district's backup and storage policy for e-mail was created for disaster recovery and discovery purposes, it does not have an e-mail archiving server solution for easy access.

See the rest of her column here.

State: Redevelopment Agencies Have Cheated Schools

Redevelopment agencies failed to pay into a school fund that forced the state to make up $40 million in education funding last year, according to a report released Monday by California State Controller John Chiang.

Chiang released the results of a five-week, limited-scope review of 18 redevelopment agencies (RDAs) across the State of California. The Controller found no reliable means to measure the impact of redevelopment activity on job growth because RDAs either do not track them or their methodologies lack uniformity and are often arbitrary. The review exposes the difficulty of holding RDAs accountable for their funding decisions when existing legal standards are so loose that any area can be deemed “blighted.”

The review did not include any South Orange County redevelopment agencies. The only Orange County agency in the study was Placentia. The report is sure to be used the political tug-of-war over redevelopment agencies: Governor Brown has proposed doing away with redevelopment agencies, while cities have voiced support for the programs.

Chiang’s report also identifies several alleged missed payments to school districts and widespread accounting and reporting deficiencies, questionable payroll practices, substandard audits, faulty loans, and inappropriate use of affordable housing funds.

“For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayers are receiving optimal return for each invested dollar,”  Chiang said in a statement. “Locally-controlled economic development is vital to California’s long-term prosperity. However, the existing approach – born in the 1940’s – is not how anyone concerned with performance, efficiency, and accountability would draw it up today.”

The 18 selected agencies represent 16 percent of all redevelopment dollars in fiscal year 2009-10. Auditors from the Controller’s office conducted the review by interviewing redevelopment staff and analyzing financial statements, reports, plans, budget documents, ledgers, job creation data, and payroll records.

The report notes that the 18 RDAs share no consensus in defining a blighted area. While run-down sections of Los Angeles with abandoned buildings show obvious need for redevelopment, other cities were far broader in their declaration of blight. Coronado’s redevelopment area covers every privately-owned parcel in the city, including multi-million dollar beachfront homes. In Palm Desert, redevelopment dollars are being used to renovate greens and bunkers at a 4.5 star golf resort. That RDA receives the 10th-highest tax revenue in the State, with a fund balance worth $4,666 for each of the city’s 52,000 residents.

Only 10 of the 18 RDAs attempted to track the number of jobs created by their projects. Of those ten agencies, four could provide no methodology or explanation for their figures. The remaining six all used different methods to find the number of jobs created. The County of Riverside used projections from developers, while the City of Desert Hot Springs looked at permit and employment records.

Employee compensation levels for RDAs were largely consistent with the salary and benefits offered to other local government employees. But the report found that redevelopment dollars often went to city or county payroll without evidence that those dollars actually supported redevelopment services. In the City of Pittsburg, the redevelopment agency signed a service agreement with the city and transferred $3 million to the city’s general fund. But no documentation exists to show that the $3 million actually went to redevelopment services.

Five of the 18 RDAs failed to make $33.6 million in required payments to schools within their redevelopment areas. When RDAs fail to make these payments, it increases the State General Fund’s financial obligations to local school districts. While RDAs are able to borrow funds in order to make these school payments, none of the five agencies attempted to do so.

While all the RDAs made the required deposits into their Low & Moderate Housing funds, the review found that many of them made inappropriate charges to this account that were not directly related to affordable housing, as required by the State’s Health and Safety Code.

* The City of Los Angeles inappropriately charged 20 percent of its redevelopment administration costs to the fund (amounting to $833,000).

*The City of Calexico also charged a percentage of its administrative costs, but also charged the fund for code enforcement and the cost of performing audits of the RDA.

* The City of Desert Hot Springs inappropriately charged $162,000 for “code enforcement.”

*The City of Parlier inappropriately charged the cost of purchasing a daycare center.

*The City of Hercules inappropriately charged $9,600 of its lobbyist expenses.

None of the 18 reviewed agencies met all of their filing requirements. In some cases, annual financial reports were fed to the RDA governing bodies in pieces, while others simply did not file. According to the news release, auditors from the Controller’s office found that many of the RDAs’ department staff were confused by filing requirements, and the report recommends strong training improvements for financial staff. The report also found that independent audits often failed to identify major audit violations and did not include all required information.

“The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety,” Chiang said. “In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care.”

Two of the RDAs made questionable loans to their cities’ general fund. In Pittsburg, the agency loaned $16.6 million in fiscal year 2009-10 without interest to the city for specified projects. By the end of the fiscal year, $15.4 million was unspent, allowing the city to earn interest on those funds. The City of Calexico’s RDA loaned $1.75 million to the city in 1993 with six percent interest. The City Council, acting as the RDA board, lowered the interest rate to 1.42 percent in 2004. While the loan was supposed to be fully repaid by 2009, the city still owes $1.1 million to the redevelopment fund, based on information provided to the State Controller’s office.

 Click here to see the full report:

Download 03-2011_RDA_Review

More Layoff Notices Coming to Capistrano Unified

Facing another year of deep budget cuts, the Capistrano Unified School District is poised to eliminate 346 temporary certificated positions, including 10 counselors and two school nurses.

The jobs also include 103 positions in grades K-6, but the bulk of the cuts are in secondary instructional services, including 47 in English, 39 in Math and 24 in Social Science.

District officials must plan their budget even before the state spending plan is in place. Statewide, school officials are working on two scenarios: If the Governor’s proposal to extent certain taxes moves forward, CUSD will see what Superintendent Joseph Farley calls “relatively minor” cuts of $1 million. But if the tax-extension plan is rejected, CUSD cuts are expected to hit $17.5 million. Additionally, the district expects to enroll fewer students, causing another decline in revenue.

“Preparing for a significant budget shortfall creates the need to consider an increase in class size as well as the possibility of reducing or eliminating programs  and services,” Farley says in a staff report.

The board meets in a special session to consider the cuts at 6 p.m. on March 8 at district headquarters, 33122 Valle Road.

CUSD Budget Update: Bad, Bad News

Even after $90 million in cuts over the past three years, the Capistrano Unified School District will need to trim at least $8.4 million more from its 2011-2012 budget, administrators told trustees Tuesday. 

And that’s in the “best case” scenario. Already the pressure is building to support Governor Jerry Brown’s push to extend state taxes. If that fails, CUSD will likely need to cut $350 per student. Projected enrollment for the next year is 50,523, Superintendent for Business and Support Services Ron Lebs told trustees. 

The worst-case scenario could see $25 million in cuts, Lebs said. In addition to the state budget’s woes, the district must grapple with a potential $2.8 million increase in mental-health costs for educating students who require special situations, $700,000 for new charter schools and other issues.

Trustees on Tuesday approved the timeline for getting the budget approved. Lebs warned the district will likely returned to a “qualified” status with its budget, meaning more county oversight because CUSD is admitting it might not have enough cash to pay its bills. Additionally, Lebs said, the budget issue could become so dire that CUSD returns to “basic aid” status, meaning the district is funded by local property taxes instead of state money.

[I asked Lebs if Basic Aid would be worse -- they haven't run the numbers but Lebs said the first year would be pretty painful. After that, the budget would at least be stable because it's based on property taxes and not average daily attendance or state cuts. He also cautioned trustees that the chances of the change were slim.]

But the budget situation, Lebs said, is ever-changing. Trustees will get another update and discuss potential cuts at their March 8 meeting.

Trustees approved the calendar -- Ellen Addonizio voted no. Trustee Sue Palazzo sniped staff throughout the night for not getting information to trustees sooner.

Meetings, for the time being at least, are being run by Vice Pres Gary Pritchard who handles the Robert's Rules pretty smoothly. Jack Brick remains president.

Here's Leb's budget presentation: Download Agenda Item _25 Budget Presentation 2-8-11[1]

Turns Out Most of Those School Fees Were Illegal ...

School districts across the state are scrambling in the wake of a settlement in the ACLU lawsuit that alleged illegal fees were being charged on campuses for what's supposed to be a free education.

Capistrano Unified School District was among six districts in Orange County singled out in the December lawsuit -- students at San Clemente High were forced to buy a book for a class, while those in advanced government courses at Dana Hills were forced to subscribe to a news magazine.

The lawsuit didn't even touch sports, but the settlement does. No fees for extracurricular activities or much of anything else outside of a well defined list.

Marcus Walton, CUSD's spokesman, said district officials hope the settlement won't hurt district programs, because the groups are allowed to fund raise and parents can make donations. Still, Superintendent Joe Farley is pulling together a task force of parents, educators, students and other stakeholders to figure out how to implement terms of the settlement.

Trustees mentioned the "ACLU Settlement" several times in cautionary tones during the last board meeting. And for good cause: Violating the terms of the settlement will spur the state controller to withhold money from the district until the issue is corrected -- and "corrected" means the district repays the money with interest.

We've talked about fees here before -- anyone have any fees stories to share?

In the meantime, here's Farley's letter and the district's Q&A on fees.

Download ACLU Settlement Fees

Download Letter to Community re ACLU Settlement

Good News: Schools Spared from Brown's Budget Cuts

K-12 is the only areas spared from budget cuts in Governor Jerry Brown's proposed budget.

This release from the Governor's Office:

Governor Brown’s Budget Slashes State Spending by $12.5 Billion

Sacramento – Governor Jerry Brown will release a balanced state budget today that slashes spending by $12.5 billion, including an eight to 10 percent cut in take-home pay for most state employees, and proposes a “vast and historic” restructuring of government operations.

“These cuts will be painful, requiring sacrifice from every sector of the state, but we have no choice,” Brown said. “For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”

Brown’s budget also calls for temporary continuation of taxes while the state pays off debt, moves forward with his realignment plan and consolidates or eliminates functions.

“Since it will take some time to fully implement these changes, I propose to ask the voters for a five-year extension of several current taxes so that we can restructure in an orderly manner,” the Governor explained.

He said the proposed spending plan, which puts $1 billion into a “rainy day” reserve fund, closes California’s budget deficit “now and into the future.”

The Governor said his realignment plan, which he called “vast and historic,” will return decisions and authority to cities, counties and schools and “allow government at all levels to focus on core functions and become more efficient and less expensive” by reducing duplication of services and administrative costs.

The one area of state spending spared from cuts is kindergarten through 12th grade education.

“Schools have borne the brunt of spending reductions in recent years, so this budget maintains funding at the same level as the current year,” the Governor said.

Brown’s budget proposes total spending of $127.4 billion for the 2011-12 fiscal year. Of this amount, proposed General Fund spending is $84.6 billion.

The spending plan eliminates an 18-month budget gap estimated at $25.4 billion, comprised of a current year shortfall of $8.2 billion and a budget year shortfall of $17.2 billion. A combination of $26.4 billion in actions is needed in order to have a $1 billion reserve. In addition, the deficit will grow to $26.6 billion if the proposed sale of state office buildings, blocked by court order, does not proceed, requiring $27.6 billion in budget actions in order to have a reserve.

Brown’s budget proposes $12.5 billion in spending reductions, $12 billion in revenue extensions and modifications, $1.9 billion in other solutions to close the gap and provide for a $1 billion reserve.

Major spending reductions include $1.7 billion to Medi-Cal, $1.5 billion to California’s welfare-to-work program (CalWORKs), $750 million to the Department of Developmental Services, $500 million to the University of California, $500 million to California State University, and $308 million for a 10 percent reduction in take-home pay for state employees not currently covered under collective bargaining agreements. Brown also plans to trim state government operations by $200 million through a variety of actions, including reorganizations, consolidations and other efficiencies.

The Governor’s spending plan proposes additional reductions throughout state government, including corrections, the judiciary and resources.

The budget also proposes to change the role that state and local governments play in local development activities by eliminating state tax benefits for enterprise zones and phasing out the current funding mechanism for redevelopment agencies. This will return billions in property tax revenues to schools, cities and counties and help pay for public safety, education and other services.

The revenue component of the budget calls for an election this coming June where voters will be asked to continue current personal income and sales taxes, as well as the Vehicle License Fee rate, for five years. Brown said revenue from the sales tax and the vehicle license fee will be transferred directly to local governments to finance the first phase of his realignment plan.

Brown’s budget also requires all corporations to use a single sales factor when measuring income attributable to California and calls for an amnesty program for taxpayers who have avoided or underreported income owed to the state.

Brown called the spending plan “a tough budget for tough times” that will close the state’s structural deficit and provide a “strong and stable foundation” to meet future needs.

“Without decisive action, the state’s severe budget problems will persist, threatening economic recovery, job growth, public education and the quality of life in California,” he said. “The adoption of this budget will position the state to lead the country as it slowly recovers from the Great Recession.”

The Governor’s spending plan assumes that all statutory changes to implement budget actions will be adopted by the legislature in March, allowing the necessary ballot measures to be put before the people at a June special election.

The Governor’s news conference will be streamed live this morning at 11:00 a.m. at www.calchannel.com. The budget, in full, will be posted online shortly after the news conference begins at: www.ebudget.ca.gov.