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Unable to meet state salary expenditure requirement, school board approves waiver application

The Plumas Unified School District Board of Trustees voted 5-0 on Feb. 14 to approve an application for a state waiver exempting PUSD from a salary-spending mandate.

Education Code 41372 is a mandate for schools in California, not nationwide, and was considered by School Board President Leslie Edlund with Trustees Joleen Cline, Dave Keller, Dwight Pierson and Traci Holt, Clerk of the Board.

“Meeting this requirement at this time would present a hardship for Plumas Unified and there are many, many districts across the state that are having to apply for these waivers,” Lisa Cavin, PUSD Associate Superintendent for Business Services, told the board.

The application for the waiver is required to be submitted to the County Superintendent if 55 percent of all unified school district expenditures are not spent on classroom instruction, according to material provided at the meeting.

Cavin explained that classroom salaries include those of both teachers and instructional aides. She said PUSD has been dealing with extraordinary costs in recent years that have prevented the district from complying with the 55 percent level and suggested that next year’s budget will provide “a more realistic picture” for the board to use in evaluating the salary mandate needs.

It was noted that the district had a shortfall of approximately $946,000 in 2016-17. Cavin said this amount changes every year, based on the total expenditures for the district.“We might be a little closer next year, hopefully,” Edlund remarked thoughtfully.

Speaking as president of the Plumas County Teachers Association, Quincy High School teacher Ron Logan addressed the trustees and said, “I’m concerned this action will become NOT the exception but the rule.”

Logan continued, “I understand that we have been dealing with facilities costs and other large expenses. My records indicate the last time we achieved the 55 percent was in 2011-12. Either we hire more teachers, raise salaries or reduce the overall budget in some places outside of teacher salaries. Let’s recruit and retain those student-centered teachers, which is one of the district’s Local Control and Accountability Plan goals. It needs to be emphasized.”

The trustees were advised that an analysis of district expenditures — especially those related to noninstructional functions such as plant services, pupil services and other needs — made it clear that PUSD’s shortfall is largely due to the “extraordinary costs of facilities upkeep, repair and renovations.”

The board’s background information specified that a large number of one-time expenditures in 2016-17 were part of the source of the challenge.

For example, technology infrastructure costs were incurred at that time.

Additionally, an “odor mitigation” project at C. Roy Carmichael Elementary School cost PUSD over $1.2 million to dewater the CRC site to alleviate hydrogen sulfide gases that were created by a combination of factors, including decomposing organic materials below the surface.

According to Cavin, the district received an award for the way this issue was handled and also received a partial reimbursement from state bond funds.

She explained after the meeting that large facilities projects have been a factor that makes it difficult to meet the threshold.

“On the flip side, the district is also required to spend at least 3 percent of its operating budget on facility maintenance, or we won’t qualify for state reimbursements,” Cavin said. “It’s certainly a balancing act.”

Cavin also noted that the amount PUSD spent on instructional salaries and benefits (for classroom teachers and instructional aides) was just under $10.5 million in 2016-17.

“The district did settle with the union for a three-year salary agreement of 4 percent retroactive to July 1, 2016; 1 percent July 1, 2017; and 1 percent July 1, 2018 (unless the district receives an increase of $1 million in ongoing funds, then it is 2 percent in 2018-19),” Cavin said in an email response to questions.

She added, “The classroom compensation percentage would have been a little higher in 2016-17 if both bargaining units would have settled negotiations prior to June 2017.”

However, according to Cavin, the teachers’ union did not settle until the beginning of the 2017-18 school year for a retroactive salary increase for the prior year.

“So, this skewed the number for 2016-17, since the retroactive portion of the increase (4 percent) was not paid until September 2017 (after the books were closed),” she elaborated.

Addressing the issue of PUSD being subject to large fluctuations in one-time funding sources, Cavin talked about such funding sources not being available for things like ongoing salary increases.

“These sources include mandated backlog payments from the state,” Cavin advised the school board in the agenda materials. “It would be irresponsible to use these one-time revenues to provide ongoing wage increases.”

Contacted later for additional clarification, Cavin provided concrete examples to highlight the challenges PUSD currently faces in meeting the 55 percent salary-spending mandate.

“To use an analogy, it would not be prudent to count on a one-time tax refund to pay your monthly bills, like your mortgage,” she commented. “However, you might want to use that to replace a TV, pay off a credit card or place it in savings.”

Looking forward at the board meeting, Cavin told the trustees that until such time as PUSD can reduce its facility expenses and secure ongoing funding to replace one-time revenues, “meeting the mandates of Education Code 41372 poses a serious hardship to Plumas Unified.”

But there may be a silver lining ahead.

Passage of Measure B by the voters — the projects and proposed spending that are currently being overseen by the school board at frequent trustee meetings — will ultimately alleviate some of the large facility costs that have affected the school district’s expenditures in the last several years, Cavin outlined in her follow-up email to Feather Publishing.

“After full implementation of the Local Control Funding Formula, we hope to see more stable funding,” she explained, saying this would help the district to better predict ongoing funding, which would then provide a better idea of what is available for ongoing costs, such as salaries and benefits.

“We have changed the way we budget and spend on certain items,” Cavin said, “which should also help to level out the swings. For example, rather than making large technology-related purchases in a single year, and then trying to figure out when to refresh, we are leasing and rotating equipment each year in a three-year cycle. This helps to stabilize the budget and plan long term for replacements or upgrades.”

Teacher Logan appreciated the challenges facing the district.

On a break before the school board went into closed session, he said, “There are explanations. We are a geographically diverse district and we’re maintaining more facilities than other districts our size. I doubt we’ll get to the 55 percent (soon), but I’m always going to argue for things like more planning time for teachers.”

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