Oak­land can’t seem to break red ink habit

San Francisco Chronicle - - BAYAREA - OTIS R. TAY­LOR JR.

Chang­ing a cul­ture is hard to do.

But un­til the Oak­land Uni­fied School District dras­ti­cally shifts the way it op­er­ates in­ter­nally, the district will be mired in an in­ter­minable fi­nan­cial cri­sis.

The most re­cent penny-pinch­ing emer­gency is a $15.1 mil­lion deficit in this year’s bud­get that will re­quire schools and the cen­tral of­fice to slice, carve and cut costs as if the ex­pen­di­tures were a Thanks­giv­ing turkey.

The Oak­land school board is ex­pected to vote

on pro­posed cuts on Nov. 27. That means peo­ple will prob­a­bly get laid off, mak­ing this year’s hol­i­day sea­son one to re­mem­ber for all the wrong rea­sons.

Oak­land has been here be­fore.

In 2003, the district ran up a $37 mil­lion deficit and had to take a $100 mil­lion bailout from the state. The state took con­trol of the district for six years, and the district re­mains on the hook for $40 mil­lion of the bailout loan, which should be fully re­paid in 2026.

The state De­part­ment of Ed­u­ca­tion ap­pointed a trustee to mon­i­tor district fi­nances in 2009. But even with the trustee, as well as over­sight from the Alameda County Of­fice of Ed­u­ca­tion, fi­nances still have been bun­gled.

“We all ques­tion where the state trustee was,” said Tr­ish Gorham, pres­i­dent of the Oak­land Ed­u­ca­tion As­so­ci­a­tion, the lo­cal teach­ers union. “How did those purse strings get un­rav­eled?”

A lot of fin­gers point to­ward Ant­wan Wil­son, the pre­vi­ous schools su­per­in­ten­dent who packed his book bag in Fe­bru­ary and left to run the Wash­ing­ton, D.C., schools. With Wil­son at the helm, the district’s spend­ing went into over­drive.

As re­ported by my col­league Jill Tucker, the school board last year bud­geted $10.4 mil­lion for su­per­vi­sors and ad­min­is­tra­tors but spent $22.3 mil­lion.

“It was clear that the district was be­com­ing top loaded with ex­pen­sive per­son­nel,” Gorham said.

“What we saw were in­creases in those ar­eas, but not in­creases nec­es­sar­ily in spe­cific sup­port for kids and school sites to al­low them to serve chil­dren,” said Kim Davis of Par­ents United for Pub­lic Schools, an ad­vo­cate for par­ents with chil­dren in Oak­land pub­lic schools. “You shake your head and it makes you sick to your stom­ach, be­cause the kids are the ones that are ul­ti­mately go­ing to suf­fer.”

Here’s what made me sick: In 2016, the district planned to spend $20.1 mil­lion on books and sup­plies, but spent less than half of that — $6.8 mil­lion, ac­cord­ing to the district’s bud­get.

Re­ally, what’s more im­por­tant: pay­ing ex­ec­u­tive-level salaries or en­sur­ing schools have the re­sources kids need so they have a chance in this world?

Last year, the district’s en­roll­ment was 400 stu­dents lower than ex­pected, yet Wil­son failed to ad­just staffing to re­flect that. It cost the district mil­lions.

If the cen­tral of­fice adds staff, it should be only for crit­i­cal po­si­tions, such as a chief fi­nan­cial of­fi­cer and an in­ter­nal au­di­tor, two po­si­tions cur­rently un­filled that are es­sen­tial for fi­nan­cial over­sight.

“It’s hard to re­tain staff like we’d like to when it feels like there’s con­stant chaos and cri­sis,” said Shan­thi Gon­za­les, a first-term school board mem­ber. “We have some is­sues in the school district with in­ter­nal con­trols.”

Gon­za­les sits on the bud­get and fi­nance com­mit­tee, which meets twice a month. The com­mit­tee, which formed early last year, has been dig­ging into the district’s ac­count­ing. It’s helped sharpen fo­cus on is­sues that might get only a pass­ing men­tion at board meet­ings where drilling down on de­tails isn’t pos­si­ble with the raft of items typ­i­cally on an agenda.

“When you en­counter the in­for­ma­tion more of­ten, you be­gin to no­tice trends, you be­gin to no­tice themes over and over again from staff,” Gon­za­les told me.

One trend Gon­za­les is in­tent on stop­ping is the pil­lag­ing of the district’s re­serves — the rainy-day fund that’s sup­posed to cover, say, a $15 mil­lion bud­get hole. An ad­e­quate re­serve fund would en­sure that the district could weather some storms with­out hav­ing to do midyear bud­get cuts.

What’s more: $1.2 mil­lion of the $15 mil­lion the district has to cut is for re­plen­ish­ing the re­serve fund so it reaches the state-re­quired level.

It’s clear that Kyla John­sonTram­mell, the su­per­in­ten­dent who re­placed Wil­son, in­her­ited a fi­nan­cial quag­mire. What isn’t clear is if she can trans­form the cul­ture that led to this mess. Still, she cur­rently has sup­port.

“The good news is Dr. John­son-Tram­mell is very com­mit­ted, I think, to mak­ing the changes that are nec­es­sary,” Davis said. “I do think that they now un­der­stand the mag­ni­tude of what the prob­lem was. They un­der­stand that there were sys­tems that were not in place to pro­tect our kids.”

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