Opinion: Natomas Supe’s Report On State Takeover

Natomas Unified School District Superintendent Bobbie Plough gave the following report during the Natomas school board meeting on Nov. 9 and has submitted it to THE NATOMAS BUZZ as an opinion piece.
Given our district is approaching the deadline of Nov. 30 to submit a balanced budget demonstrating adequate cash flow to the Sacramento County Office of Education, Superintendent Bobbie Plough provided an extensive report to the board of trustees and public explaining 1) the timeline and process associated with an impending state takeover; 2) specifics regarding the state loan; and 3) anticipated affects of a state takeover.
Timeline: With the assistance of the Sacramento County Office of Education (SCOE), our district has cut expenditures, economized extensively and developed the best possible financial scenario in the revised budget and cash flow analysis. However, our district remains $8.9 million dollars short of maintaining an adequate cash flow necessary to meet financial obligations over the next two years. California Education Code establishes Nov. 30 as the final date that a school district can meet to avoid a negative budget certification and referral to the state legislature for a state loan — we are 21 days from that date. When the new state legislature reconvenes in January, our state senator or assemblymember will introduce a bill authorizing the State to seek an emergency appropriation for Natomas Unified. This action will allow the state to sell a bond on Wall Street. SCOE has already alerted the California Department of Education that Natomas Unified is in imminent danger of a state takeover.
Updated Information: Since the Nov. 9 board meeting SCOE has alerted the district that once the Governor signs the legislation in January or February, we are financially obligated to the state loan and at that point there is no turning back. (Originally, we thought it wouldn’t be financially binding until the bonds were sold.)
Once the loan is secured, two actions occur immediately: The State Superintendent of Public Instruction will remove 1) the district superintendent, and 2) the decision-making authority of the board of trustees. With these two actions, all accountability to the community ceases and all power is turned over to one person—the state administrator.
Amount of the State Loan: The Sacramento County Office of Education has the authority to determine the amount of the loan needed to insure coverage of the $8.9 million dollar cash shortfall, balance the budget for a minimum of three years, plus interest on the loan at an estimated 6 to 7 percent, the costs associated with the state administrator and his/her staff, and the required quarterly audits completed by the State Controller’s office. SCOE estimates the loan would be $20 million to as much as $30 million as opposed to the $8.9 million in salary concessions that all district employees are being asked to take over the next two years. (This equates to 7.9% in concessions for all employees to balance the multi-year projected budget and maintain adequate cash flow to meet the district’s financial obligations.) If employee concessions are not agreed to and the state loan goes through, the District must develop a plan to immediately begin repaying the loan in its full amount with interest.
Supt. Plough expressed grave concern regarding many false rumors circulating regarding a State Takeover. She stated that there is no doubt that a state loan will hurt our students, employees, as well as the community! In an effort to understand exactly what this will mean for our district, Supt. Plough had lengthy conversations with two former state administrators who explained that:

The state administrator will immediately seek employee concessions—much larger than the current proposed concessions of 7.9% over the next two years.The bargaining unit agreements remain intact; however, if an agreement regarding employee concessions cannot be reached, the state administrator will find alternative methods in order to balance the budget and maintain adequate cash flow. Here are examples of action taken from school districts previously under the direction of a state administrator:
  • Teacher lay-offs and increased class sizes of 36 in elementary and 40+ in middle and high school
  • School closures to consolidate administration and support staff and respond to declining enrollment that accompanies a district under state administration (Oakland closed 15 schools).
  • Additional reduction of classified support staff providing assistance and services to students, i.e. only one clerical staff member per school office.
  • Additional reduction of certificated staff i.e. counselors, nurses, psychologists and assistant principals.
  • Additional reductions to school site budgets
In closing, Supt. Plough stated that staff has made every effort to reduce expenditures and economize in every way, shape, and form in order to minimize the effect to students and refrain from asking employees to make huge sacrifices. In fact, the Governor’s recent call for a special legislative session due to an increased state budget shortfall indicates that our current district budget projections definitely portray a “best case scenario.” It is entirely possible that the state will force schools to endure additional cuts, thereby causing increased budget reductions for all school districts throughout the state. There is simply nothing left to cut without jeopardizing health and safety, and further impacting our instructional program.
The future of our students, staff, and the community rests in the hands of the employee bargaining units. The district will continue to make every collaborative effort to attain the 7.9% concessions needed over the next two years to avoid the state takeover of the Natomas Unified School District.

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