Budget Updates: 2019-20 1st Interim Report & Revisions Needed for Next Year’s Budget to Avoid Mid-Year Cuts

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Note: If this meeting is “willfully interrupted, the Board may move to the Committee Room as soon as practicable and resume the meeting. If the Board moves to the Committee Room, it will allow public comment–as necessary and if feasible–from the Great Room.” 

Item #19-2344 and Item #19-2253

Today, the district will be presenting its annual first interim report the 2019-20 school year to share the status of their budget as of October 31, 2019:

Revenues and Expenses: When we look at the changes made to the unrestricted funds–money that the district has the most flexibility in allocating–from the revised budget and the projected year totals, we see very minimal changes to revenue (+$83K) and expenditures (+$6.7M). For restricted funds – money that the district can only use in limited ways – we see increases in both revenues and expenditures due largely to carryover funds from last year.

Slide 4

Reserve: The district is not expecting any mid-year budget reductions this school year and will still maintain a 3% reserve (emergency funds). 

Long-Term Outlook: When looking at their multi-year projections, we see that the district’s expenses will continue to exceed their revenues for the next three school years (see slide 9), largely due to state funds not keeping up with the district’s necessary expenditures (i.e. rising pension costs and minimal increase in LCFF). To stay solvent and maintain a 3% reserve in the coming school years, the district must consider cutting $15.5M from the 2020-21 school budget and another $10.5M from the 2021-22 budget (see slide 10). Note: This calculation takes into account using up their unassigned funds to pay for the expenditures. 

We are encouraged to see that the district is committed to maintaining its 3% reserve intact in case a short-term emergency happens and that they don’t plan on making any painful mid-year budget cuts this school year. At the same time, we are worried that additional cuts need to be made over the next couple of years, largely due to not being able to keep up with rising expenditures. We hope that we can find a way to work together locally and state-wide to figure out how we can generate additional revenue for our underfunded schools. 

Item #19-2517

Tonight the district will be presenting and discussing the first draft of the 2020 Facilities Masterplan, which describes the process that district will use to determine a set of building and renovation projects that a district will pursue to ensure students have safe and quality spaces that allow students to learn. Projects can include modernizing aging campuses, building and/or fixing athletic facilities (fields), and having fully accessible facilities for SPED programs across the entire district.

The 2020 OUSD Facilities Masterplan:

  • incorporates work from previous data sources, numerous initiatives, and engagements that have been pursued as part of the Citywide Plan and carries forward areas of the Plan that have a facility component (i.e. enrollment trends, program trends, and local trends). 
  • provides direction for significant capital expenditures (~%3 billion) for facilities improvements over the next ten years and is a critical step for obtaining state and local funding to support these projects. 
  •  is an important tool in ensuring that the District can accommodate OUSD program-level priorities with practical bricks-and-mortar solutions over the ten-year planning horizon. 

The board will be discussing the overall direction of the plan, including the table of contents, narrative clarity, process clarity, presentation of quantitative insights, and proposed project categories. Critical comments will be used to revise this version of the masterplan, which will then be presented to the larger community in January and February 2020 for input before the final plan is approved by the board.

Last year, the 1Oakland campaign made recommendations on how to approach the facilities aspect of the Citywide Plan. We believe that all areas of the city-wide plan should be considered when making facility decisions that ultimately impact all students in Oakland, including the charter schools community. We cannot make decisions in isolation and hope that the district is able to share a comprehensive plan that has a clear decision-making process on determining the future of our facilities. 

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