12 responses to “SMUHSD Financial Disaster-$3.5M”

1. Joanne

   August 31, 2006

   To the person who posted this: Where are you getting your information? The opinion expressed in the post “that the SMUHSD is in serious financial trouble” would carry more weight if it were backed up with facts that could be verified. Does the SMUHSD publish annual balance sheets and P/L’s? Does the statement “3.5 million in the hole with no reserves” mean that the SMUHSD spent 3.5 million more last year than it took in in income and it exhausted its reserves to pay for that deficit? Or does it mean that this year the project spending is 3.5 million more than the project income and reserves will be depleted if spending is not cut back? Or does it mean that the SMUHSD has 3.5 million of liabilities with no cash assets/reserves — i.e that it is insolvent? What does that statement mean? The reason we elect school boards is for oversight…If it is true that the SMUHSD is in trouble, where is the board?

2. anon

   August 31, 2006

   good questions, which need to be answered.
   Sounds like a visit to the school board meeting or an emai to all our board members to have them explain.

3. guest

   August 31, 2006

   Teachers at BHS were informed by Assoc Superintendent that some newly hired teachers at BHS would be “let go” at the end of September because of financial difficulties and that overstaffed teachers from other schools would be taking their place. Some of these teacher who will be released had left tenured positions in other districts to teach in the district and now they are told they will have no job after September.

4. San Fran

   August 31, 2006

   Yes, please, poster – tell us where this information can be located and confirmed before we all storm the SMUHSD offices.

5. guest2

   August 31, 2006

   The SMUHSD sent out a letter to its members yesterday. The district also presented this material to its members last week. Call your school principal for information.

6. Joanne

   August 31, 2006

   To Guest: Did the Associate Superintendent say how many teachers in the district would be let go? Was this discussed at a public school board meeting? If not, why not?

7. Joanne

   August 31, 2006

   Guest2: No, I’m not going to call my school principal for information….If this is a budget screw-up the faulty budgeting lies with the SMUHSD, not at the school site. Someone bothered to start this thread and if that person cared enough to start the thread, I think the person owes it to the rest of us to do it responsibly. YOU get the facts (that can be verified) and post them here. Who, what, when, where and why. Good facts don’t need arguments — they speak for themselves. So please, if you want us to listen to what you have to say, give us some FACTS…

8. guest2

   August 31, 2006

   Dear Colleagues,

   Several weeks ago (August 2), I wrote to you and introduced the budget challenge confronting the District. In this communication I wish to provide you with more detail.

   The distinctive characteristic of the District’s finances is its Basic Aid status. The local property taxes for most school districts are not sufficient to fund the State Revenue Limit? per pupil apportionment. A Revenue Limit’ school district does not focus on its local property tax receipts because any shortfall in funding is backfilled by the State. Furthermore, any increase in student enrollment results in additional funding.

   On the other hand, Basic Aid school district property taxes exceed the State per pupil Revenue Limit? apportionment and a Basic Aid school district is allowed to retain the excess amount. As a result, Basic Aid school districts receive greater funding but are also extremely dependent on local property taxes. Ninety-two percent (92%) of the San Mateo Union High School District’s Unrestricted General Fund revenues are composed of local property taxes.

   Property tax revenue can be very volatile and subject to unforeseen dramatic changes. Thus, while the additional revenues a Basic Aid district receives can be substantial, the financial picture can change quickly without any notification. Unfortunately and, never more so than now, San Mateo Union High School District, along with other Basic Aid school districts in San Mateo County, has experienced the volatility of local property tax fluctuations and must address the budgetary ramifications.

   For years, the District has developed balanced budgets that were based upon several factors: the collaboration it has with teachers, classified staff, and principals about the vision of the District; reports it receives from the County and state on anticipated revenues including property tax revenue projections developed by the County Assessor’s Office; and, ultimately on the advice of the leadership in the Business office as to how one dynamic affects the other in accomplishing District goals and maintaining District Standards. We find ourselves today at a point where these dynamics are out of harmony.

   Disturbingly, for the past two years, the District’s actual property tax revenues were $4.3 M less than the original property tax projections; however, it was on the advice from the leadership in the Business office about these projections that the District based its recommendations for program funding and salary increases. The substantial shortfall, we have learned, was the result of unforeseen rebates and litigation settlements by the County with commercial property owners.

   To further complicate the matter, the reductions in revenue to the District did not occur at the beginning of each school year; rather, the reductions occurred at different intervals throughout the year. In fact, as recently as July 12, 2006, the Controller notified the District that property tax revenues were being reduced by an additional $400,000 after the close of the fiscal year. This was the fourth unanticipated notification of property tax reductions during the 2005-2006 fiscal year.

   Therefore, when the Board adopted the budget for 2006-2007, it was clear that the unanticipated property tax shortfalls had depleted the mandatory reserve the state requires that a district maintain for economic uncertainty. With the arrival of a new Associate Superintendent Business July 1, the Governing Board requested a new analysis of the budget and for the findings to be presented in a study session with recommendations for reinstating the reserve. The Study Session occurred on August 10.

   In accord with protocol, the District’s budget was forwarded to the County Office of Education. Because the requirement for the reserve for economic uncertainty was not met, the County Office has fiscal oversight until the district replenishes the State’s mandated reserve for economic uncertainty. The County requires now that the District immediately implement a recovery plan that returns the District to financial health by September 29, 2006. This will require a budgetary reduction of $3.5M.

   In order to further inform all district employees about the state of the budget, we are scheduling a meeting on September 7, at 4:00 p.m. at the San Mateo Performing Arts Center, to discuss proposed short-term and long-term recovery. While the meeting is, of course, not mandatory, we are hopeful that all staff will attend and participate as we work together to find short-term and long-term solutions to enhancing the fiscal health of the District.

   In closing, I reiterate that which I wrote to you earlier this month: an academic renaissance has occurred within the District during the last three years of which you should feel justifiably proud. The District has implemented the Academic Core and the seven period day schedule to support academic success for all students. High expectations for ALL students have led to student academic performance being unequalled in the District’s rich academic history.

   The challenge of achieving a $3.5 M reduction by the County’s September 29 time line requires that we work collaboratively and in the spirit of confidence that we can overcome this difficult and unanticipated obstacle while preserving the foundation of the District’s success – a longstanding partnership between District, school, and parents that is tirelessly committed to providing excellent educational opportunities for the students we serve.

   Sincerely,

   Samuel Johnson, Jr.
   Superintendent

9. Anonymous

   September 1, 2006

   So, now the Business Office is at fault for giving bad advice?

   Hundreds of parents and staff showed up almost two years ago, objecting to the 7th period day schedule, which most parents and teachers knew we couldn’t afford to impliment. This has been a one man show all along, with blind faith from a District Board that has facilitated each and every action along the way.

10. Joanne

    September 1, 2006

    Thanks, Guest 2. This is a start; here’s my additional questions:
    1) What is the total size of the SMUHSD budget (I thought it was about 80 million, but I’d like an accurate number).
    2) What is the state mandated reserve? I thought it was 3 percent; can anyone confirm?
    (3) The letter quoted above states that “when the board adopted the budget for 2006-2007 it was clear that the unanticipated property tax shortfalls had depleted the mandatory reserve.” Is this a typo? If the board knew that the mandatory reserve had been depletd why did they approve the budget? When was this budget approved? Are they really telling us that they approved a budget that put us under the supervision of the county? Earlier (in March 2006) on this blog and in local papers it was reported that the SMUHSD’s board UNANIMOUSLY approved a new budget that would put the SMUHSD with a 3.57 reserve — a reserve that was close to 3 percent, but obviously not under 3 percent. Did I miss something between March and now? The numbers don’t match…and the $400,000 August adjustment wouldn’t account for a dip below the reserves (if my 80 million figure is correct that would only be .5% nor would a $400,000 “hit” explain the need to cut $3.5 million)…
    (4) The letter mentions that for the past TWO YEARS the income has been off by $4.3 million..and that this has come in several different stages…I understand that numbers are always estimates, but budgets based on property taxes shouldn’t be that much of a suprise…And if there were one downward adjustment previously (in an otherwise soaring real estate market) wouldn’t your budget analysis require you to ask whether there is other similar litigation or rebates issues outstanding that might affect your estimates? The SMUHSD and the board need to answer these questions clearly and concisely in “plain speak” and without the usual fallback that school budgeting is a “complicated process and it’s very difficult to understand.” Try us. We’d like to understand it.

11. guest2

    September 1, 2006

    It doesn’t matter how you spin it… the district knew that they were in financial trouble and continued to spend anyway. The expansion of the 7-period day cost almost $2 million. The district is still saying that can afford the 7-period day! Why? Because they have always intended to cut other programs to pay for the 7 period day. They knew that they could not get the program through on its own merits (and pricetage!) so they moved it into the schedule and waited for the deficit to hit, then they planned to cut other programs (sports) and keep the extended day. The only problem is that they got caught!

    Don’t believe the B&*% S*&% from the district. A true leader would not be putting together a wish list for cuts, he would be accepting responsibility for the problem and leading with solutions. Johnson is once again over his head in his one man show. Its time to get to the truth. The Board needs to act and ask for some serious answers.

12. Rich Grogan

    September 2, 2006

    It appears Samuel Johnson Jr. is attempting to deflect his mismanagement of the district’s funds to those individuals, who work in that nebulous placed called LEADERSHIP IN THE BUSINESS OFFICE. Well it is time for Samuel Johnson Jr. to step forward and place names to those individuals within the LEADERSHIP IN THE BUSINESS OFFICE, who assisted him in making his decisions, so they can be contacted and hear what they have to say.