A little weekend review

As we prepare to make difficult decisions, we remind you of the difficult decision last spring. That decision was to take a vote of no confidence in the district’s chief financial officer, Sandy Rotella. You did not take the decision lightly. Many of you say you cannot remember ever having taken that kind of a vote in SKEA history.

But you listened to the facts and you voted your conscience. Your SKEA officers and bargaining team will not ever ask you to take any kind of vote unless you have the facts and you have the time to discuss debate and vote the way you choose to vote after hearing all of the facts.

The good news is that our new superintendent took your action seriously. She listened and she acted upon your action. Michelle Reid hired two veteran independent financial consultants, both experienced in school district budgeting, to review the budget and to make suggestions. Both Debra Aungst and Bob Boesche shared the results of their report at the recent board meeting at SKHS – one in person and one who was on the phone available for questions. SKEA believes the findings in the report will help SKSD remain upon sound financial footing rather than continue in the downward spiral that was occurring. However, we also believe that the new district revenue not addressed in the budget review – new state funding, levy money and savings from the layoff – a total more than $11 million – is enough to address our class size concerns and other issues at the bargaining table.

For those who may need a little review about where we are as we continue bargaining, a blast from the not so recent past. These are excerpts from T Michael Birch’s statement to SKEA membership last spring before we took a vote of no confidence.

On April 12th of this year, SKEA was notified that South Kitsap School District chose to eliminate 26.5 FTE positions. Two hours later, the email notifying staff of this plan was sent out by the superintendent. SKEA leadership and members were shocked. Our contract specifically states that we will have a chance to audit the budget and have input into any decisions to RIF.

The shock did not come from the fact that they did not inform us earlier although that would have been nice. The shock came from the fact that the district just discovered that there was a budget problem. In the past, discussions started taking place in December or January. These facts are what gave us first concern about SKSD’s Chief Financial Officer, Sandy Rotella.

Part of a CFO’s job is to monitor the budget. If there are problems, they need to be aware of what is happening with the budget so that they can adjust expenditures and start having conversations about the future. This did not happen under Sandy Rotella’s watch. These conversations did not start taking place until April.

On Monday, April 14, SKEA’s bargaining team sat down with the school district’s bargaining team for our second bargaining session. Our team had adjusted our initial pay proposal to more closely match the pay raise for the superintendent’s position. This would equal a 6.9 perecent increase for teachers. Sandy Rotella started saying that this was a 65 percent pay increase. It took district attorney nearly 30 minutes to explain to her that our percentages were correct. This raised our second concern about her ability to perform the duties of Chief Financial Officer.

We specifically set an agenda for the May 9 bargaining session to include a discussion about the budget. On May 8, the night before this meeting, we asked the school board and our former superintendent, “What is the projected budget shortfall?”  They said that it was $3 million.  We pointed out that they were cutting $4.7 million in teachers alone.  They did not really have an answer as to why there were more cuts. Sandy Rotella was at this board meeting and did not speak to the budget.

The next day, May 9, when Sandy Rotella came into the bargaining meeting, she informed us that she didn’t really plan anything, but she could show us a power point, or we could ask questions if we want. Every person at the table, including the school district’s bargaining team, looked surprised that she was not more prepared. We started by asking, “What is the projected budget shortfall?” She stated that it was $3 million dollars. When we pointed out that it was $4.7 million in cuts to teachers alone, she started to talk about sequester. The effect of sequester on our school district is less than $300,000. She also said that we don’t know how much is coming in from the state, and thus far they refused to use even the safest number from the Senate in our added revenue. 

I pointed out that the district chose to make cuts based on a number, and asked what that number is. She could not answer. I told her that to find a budget shortfall, you take your current programs and staffing and figure what that will cost for next year.  Then you take what you will get for funding next year and subtract it from your projected costs and you will get the projected budget shortfall. I then asked if she could give me that number. She said, “I don’t know that number off the top of my head.” The entire bargaining table, including the school district’s bargaining team, was shocked. With 61.3 FTE in cuts to certificated teachers resulting in people losing their livelihood and our students having increased class sizes, it was shocking that they didn’t know how much money they are projecting they need to save!

I told the district that they are asking us to take their word that there is a money problem, but we could not even get a straight answer from their CFO. The next day, May 10, Sandy Rotella came in with a sheet showing a $4.6 million dollar shortfall. This was up from the $3 million dollars reported at the May 8 school board meeting. This sheet had the school district putting approximately $1.4 million into savings and another $1 million dollars into capital projects. It is also important to note that this budget shortfall did not include any money coming in from the state. I tried to ask more specific questions regarding the activity code in which instructional specialist were budgeted, and she told me they were probably budgeted for but did not know which code.

The South Kitsap School District has traditionally been very well run financially. Although we had disagreements about how money should be spent, we always pointed out that this district was very responsible with the money. In the last 18 months, something changed. There has been a significant change in spending patterns. There seem to be no budget controls. These are the concerns we have regarding Sandy Rotella. Although we have been extremely frustrated in trying to get this straightened out, the idea to have a no confidence vote did not come from SKEA leadership. It came from the members at our general membership meeting on May 22. Our rep council unanimously supported it after hearing the story last Tuesday, May 28. I ask you to vote your conscience.

T. Michael Burch is a math teacher at John Sedgwick Jr. High and has served on the Executive Committee for several years as the Junior High Rep.  Last spring he was elected by the membership to be the SKEA Vice-President for the 2013-14 school year. He is also a member of the Bargaining Team.

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8 thoughts on “A little weekend review

  1. Keep up the good work, and keep asking these questions. Do the math, make sure it adds up, and hold them accountable for their claims. I’m a parent of two kids in the district, and we are standing in solidarity with you all to keep class sizes reasonable, and fully agree that while financial health is important, what took several years to happen should not be corrected in one year. Please let us know how we can help.

    Don’t let them blame this on the ‘sequester’, seems like everyone is pointing to that these days because it’s an easy excuse, but it never pans out.

  2. Gerry, Thank you for your support of our team. You can help us by sharing this blog with other parents. We don’t want any surprises for our community members. Sincerely, Judy Arbogast, immediate past president of SKEA.

  3. I attended last nights meeting, and learned a lot.

    I nearly suggested that since declining enrollment is driving the budget problems, that perhaps we should cut health classes and sex ed. That way our students have more future students.

    Humor aside, the differences do not seem that far apart. I hope you all can come to an agreement.

  4. Thank you Judy for the information, I’ve attached a letter I sent to the board below.

    In solidarity, -Gerry

    ***
    Hello,
    My son will be a first grader at Orchard Heights and my daughter will be in kindergarten next year. I attended Wednesday’s meeting out of concern for much of what I’ve been hearing in the community.

    I am saddened to hear that the virus of ‘austerity’ has infected our school district, and once again, children are bearing the entire consequences. While I agree with the sentiments expressed by many board members that fiscal stability is important, I am dumfounded by the suggestion that our district should achieve reserves sufficient to cover 50 days worth of operating expenses. Fifty days may be a worthwhile upper end goal, as in why would any district need to maintain more than this amount, but for this board to place a higher emphasis on long term reserves over the immediate wellbeing of our students is leaving me very angry. I also heard you say that the State grades us on our level of reserves… is obtaining an ARBITRARY grade from the state, who has failed to adequately fund education in the first place, worth causing IMMEDIATE harm to our students and teachers? If we actually had a negative balance sheet, with outstanding debt, I would be more inclined to support your strategy, however, that is not the case.

    Since declining enrollment is the cause of many of these issues, perhaps we should stop teaching sexual education to ensure that our pregnancy rate increases and we see enrollment increases in a few years? While this suggestion is not intended to be serious, it demonstrates that too often we look to children to carry these burdens, instead of keeping their best long term interests in mind.

    Austerity, and the idea that hoarding cash will somehow solve all the worlds problem has been shown time and time again to be a failure in government policy. For a business, yes, reserves are important and can be an adequate measure of health, but YOU DO NOT OPERATE A BUSINESS, YOU ARE STEWARDS OF A PUBLIC INSTITUTION. One of the public comments I heard at the meeting, suggested that the board should develop a marketing and revenue plan. I disagree with this viewpoint. Our schools do not have a mission to make money. They have only one mission, to provide a high quality education to our students. Any activities which do not support this mission, such as building arbitrary reserves, should NEVER be prioritized over the needs of our students. I also heard you reference the opinions of many consultants that you have hired… this frustrates me even more. There is only one opinion that matters, those of the parents, students, and teachers. Teachers are the only people who are providing any real ‘value added’ work in your district. To neglect their concerns over those of consultants and bureaucrats demonstrates how misplaced your priorities are.

    Throughout the country, good teachers are frustrated and giving up. My uncle, a 4th grade teacher in Wisconsin with 30 years experience, quit this month and is now a long haul trucker. This is what happens when you try to run a school like a business. You become cutthroat in your value determinations, spend tons of money chasing ‘efficiencies’ that only exist in the minds of the consultants you have hired, overrule the judgment of the professionals actually doing the work, and focus on arbitrary benchmarks to determine in you are succeeding or not. As a LEAN Six Sigma Green Belt myself, I’ve seen this pattern repeatedly in industry, where simple draconian solutions are often preferred over risky solutions that will yield better results. I am concerned that the same thing is happening here, and strongly urge you to reconsider your reliance on the budget balance sheet and arbitrary reserve levels as your guiding principles.

    What I did not hear at this meeting was the boards strategy to address declining enrollment trends. I heard you talk about redrawing boundaries and shifting students from one school to another, but these neglects the flexibility of the resources you have, and once again places the entire burden on students and families. Why not negotiate with teachers to gain more flexibility in shifting resources from one school to another? I understand this would disrupt the institutional administrative hierarchy, but knowing that my children are in reasonably sized classes, and dealing with some churn and flux in faculty is preferable than to having to deal with the disruption that would result from redrawing lines. Alternatively, if you provided parents with an incentive to change schools via magnet programs, I feel that a solution could be achieved without a large disruption, and one that would provide for a greater value for all stakeholders.

    I was absolutely shocked to see class sizes well above 30 students. Aside from the quality of education, I am also deeply concerned about student safety in classes this large. I do not believe that classes of this size provide a reasonable level of supervision and even in my son’s kindergarten class of about 22 children last year, I often felt that the class was teetering on the edge of chaos and that it was impossible for each student to receive the level of support they needed. Our teacher was an excellent resource, but I had the nagging feeling like we keep setting up our teachers for failure through draconian solutions. While I am an involved parent and provide plenty of supplemental education, I am deeply concerned about children of parents who cannot contribute as much time and energy because of their circumstances.

    We were on the fence between homeschooling our children and enrolling them in the district. While we have been happy with the quality of education my son received last year, I can tell you that safety is a paramount concern of ours and if we ever feel that my sons safety or well being is threatened, we will not hesitate to dis-enroll him immediately. The decisions you are making now regarding class sizes is something we are watching closely.

    I was disgusted several years ago when you took up an arbitrary debate about break naming, and as a result decided to disenfranchise all students who do not celebrate Christmas. Perhaps instead of engaging in divisive culture wars, you should have been watching your balance sheet then? While these issues provide us with material for lessons at home about tolerance, integrity, and religious freedom, actions which reduce student safety such as larger class sizes, is one thing that that I will absolutely not tolerate. While today the debate is centered around austerity and larger classes sizes, the manner in which this issue is being addressed is telling of how future issues will be resolved. What will it be tomorrow? Arming teachers in the name of safety? Eliminating science from the curriculum in the name of academic freedom? Who will you listen to? Outside interests or students, parents and teachers? Today it appears you are choosing outside interests.

    You guys have a simple choice to make here. Who do you want to please more? Bureaucrats or students? Many other government institutions have faced similar choices, and those who chose austerity have found that the death spiral will only continue… I saw nothing in the documents I’ve reviewed that suggest this problem will be any better in the future. It’s a race to the bottom, and I sincerely hope that you care enough about our community and our children that you will change course and instead choose to support students over the opinions of those who feel that our children need to suffer more in the name of austerity.

    I am paying attention closely, and I vote in every single election. While I have supported many of you in the past, my level of future support will hinge largely on the decisions you make in the coming weeks.

    Will you choose Austerity or students? Are you going to act like the CEO of a business or a steward of a public institution?

    Gerry K. Austin P.E.
    Port Orchard

  5. Two board members responded with an offer to sit down with me and discuss further. Here’s my followup message to then with some specific questions. Depending on availability, I will take them up on their offer to meet.

    Chris and Kathryn,
    Thank you for taking the time to respond and your offers to meet in person. I also thank you all of your years of service. I recognize the role that you all play, that your job is far from easy, and that the vast majority of people have no interest in taking on your role. I thank you for your involvement and also your willingness to be accessible to the public.

    I do not question your personal commitment to the district and all the stakeholders, but I do disagree with the manner in which you are defining “a balanced budget approach and responsible fiduciary controls”. For some people, this many mean simply maintaining a positive balance, for others this might mean having a year of operating capital on hand. I think this is where the confusion and disagreement is. You simply can’t say, well this is “sound financial management” without defending the threshold you’ve set with a value determination.

    I understand that you have taken the states recommendation of 5%, but what is that based on, and what is the immediate and longer term impacts of not meeting that threshold?

    As in, will our bond rating be higher as a result? Will federal or state funding be reduced? Will the frequency of financial audits be increased? Can you all summarize that the tanglible and immediate impacts are of not raising reserves to this level? What is the difference between having 1% and 5% and what are the consquences?

    Also, are the reserves set aside as a dedicated amount, or can already obligated but unspent funds be included in the value of reserves? At the meeting, one of you spoke about end of FY carry over, and the difference between how carry over is managed in the district versus the federal government. As a federal employee, and being one of these people who come up with ideas to spend money at the end of the year, I completely agree with your approach and support the fact that you have given more discretion to schools themselves to carry funds over. Are these unspent fund considered part of the reserve account now? Could they be? If state funding immediately and unexpectedly dried up, it seems like it would be a prudent decision to reallocate unspent funds for more immediate needs. Are there other accounts which could be flagged as reserve contingency funds as well? Has the board ever discussed what services would be immediately curtailed, in order to maintain core services, in the event of a state shutdown? With some creative accounting, it may be possible to creating a revolving reserve fund consisting of obligated funds which would be immediate reallocated in such an event.

    To provide another comparison with the federal government, I was furloughed for six days this summer, because we were told there wasn’t enough money available to pay us because of sequestration. However, on closer examination, there was plenty of money, none of our funds were actually pulled back, and the whole thing was simply a political exercise perpetuated by the Secretary of Defense under the disguise of ‘lack of funds’. The Navy said they had plenty of funds, but the Secretary of Defense ordered them to furlough anyway in the name of being fair, because the Army was short on funds and Congress would not allow reprogramming of funds which were already obligated.

    As it stands now, with the furlough coming to an end this week, overtime is now being encouraged to spend our funding and complete our tasking before the end of the September. It is difficult to understand how an agency can claim there is no money available, while there is actually money available. That’s what I see happening here… Money is there, but you all are making the choice to hoard it in the name of ‘fiscal prudence’ as you call it, or ‘austerity’ as I call it. As I mentioned before, if a genuine deficit existed, I would be more included to support your strategy, however, that is not what I am seeing.

    I am available all day tomorrow on Sunday, and would be willing to find a time to discuss.

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