School board ponders big budget cuts if state proposition, local parcel tax fail

The possibility of deep, immediate mid-year budget cuts to the Davis school district if Gov. Jerry Brown’s Proposition 30 fails in the Nov. 6 election colored the discussion at several points during Thursday night’s school board meeting.

Associate Superintendent Bruce Colby gave a report on the Davis school district’s preliminary general fund actuals for the 2011-12 year. He warned the ongoing state budget crisis — with the state repeatedly deferring payments to local school districts — has left Davis (and other school districts) in a financially precarious situation where they have very little in the way of actual cash.

“All of our fund balance now is made up of IOUs from state government,” Colby said. “We closed the year with $14 million of IOUs. This is not a healthy balance sheet.” In the event that California voters do not approve Prop. 30, the Davis district would see about $3.5 million in immediate “trigger cuts.”

“And even if Prop. 30 passes, we aren’t going to see a dime of it until June (2013),” Colby warned. “If Prop. 30 fails, and the district does not have enough contingency plans (including employee salary concessions) in place to counteract the resulting round of mid-year budget cuts, the Davis district could literally run out of cash during the current school year. Revenues from the school district’s local parcel tax on the Nov. 6 ballot, Measure E, would not come in during the current school year, either.”

Superintendent Winfred Roberson gave the school board trustees a copy of a letter received a few days ago from the Yolo County Office of Education, which — under state law — reviews the budget of each of the county’s school districts, and issues warnings if a school district’s cash reserves and ability to meet future financial obligations appears to be in jeopardy.

The letter from the Yolo County Office of Education includes a terse warning that “the (Davis) district and its governing board need to be realistic regarding the ability to implement contingency plans … should the governor’s proposal (Prop. 30) and (the) local (parcel) tax measure (Measure E) fail. … Slow reactions and waiting to correct fiscal issues tend to escalate matters very quickly … The necessary but difficult measures must be taken.”

The Yolo County Office of Education also said “We strongly recommend … contingency language” in agreements with the district’s bargaining units in the event that there are revenue cuts during the coming instructional year.

Trustee Tim Taylor summarized the Yolo County Office of Education’s letter in these words: “They’re saying ‘You’re skating on the margin of being able to make your payroll.’ ”

Colby answered “Yes.”

Some weeks ago, the Davis school district announced a tentative agreement with the California School Employees Association (representing secretaries, groundskeepers, custodians, food workers and others) containing such contingency language. Negotiations with district’s other bargaining unit, the Davis Teachers Association, are ongoing.

Frank Thomsen, president of the Davis Teachers Association, announced that during negotiations on Thursday, “the DTA negotiating team presented a proposal offering five furlough days for the current school year to help the district in the event that Prop. 30 does not pass.” (At a previous school board meeting, Roberson called on the DTA to consider up to 10 furlough days.)

Thomsen also said that “we received notice that the Public Employment Relations Board (PERB) had denied the district’s unilateral declaration of an impasse” in negotiations at the current time. A declaration of impasse, if approved by the PERB, would result in a third-party mediator joining the talks. Thomson said there is “still much to be gained at the bargaining table.”

After the meeting, Roberson confirmed that the school district is continuing to negotiate and also continuing to seek a declaration of impasse. “We appreciate that the (DTA) has come to the table with a counter-offer,” he said. “However, the association’s current proposal does not allow us to meet our goal for fiscal solvency in 2012-13. But I’m pleased that we’re getting closer to an agreement.”

— Reach Jeff Hudson at jhudson@davisenterprise.net