[BOARD WATCH: SPECIAL EDITION] OUSD’s Third Interim Report Presentation

Governor Newsom’s May budget revision is not as promising as we once hoped for. Earlier this year, we had expected to have a $6 billion surplus as a state; however, due to the deep recession caused by COVID-19, California is now facing deficits of $54 billion. The Governor has proposed cutting 10% from the Local Control Funding Formula for the coming year, the major source of the state’s education funding.  

With this uncertainty, now more than ever, it is important for the District to transparently share budget updates with the community. Unfortunately, for the second time in a row tonight’s budget presentation fails to meet our community’s expectations. Click here to see how the Third Interim Report scored on our GO Sunshine Budget Presentation Rubric.  

Our community working group developed this rubric to publicly evaluate district budget presentations focusing on: student impact, accuracy and transparency, anticipation of problems and solutions, and community accessibility. 

We are hopeful that the appointment of Lisa Grant-Dawson as the District’s new Chief Business Office (CBO), the district’s finances will continue to stabilize and she seizes the opportunity to shift the way these budget updates are shared with the board and made accessible to the community. 

Click here to watch a livestream of the meeting tonight at 6pm

OUSD’s 2019-20 Third Interim Report Summary

Item #20-0441

The third interim report is a final update on this school year’s budget and whether the district will be able meet its financial obligations in the next two years (as of April 20, 2020). This report is where changes from one interim report’s projections to the next are highlighted. 

Revenues and Expenses

Unrestricted Funds – When we look at the changes made to the unrestricted funds — money that the district has the most flexibility in allocating — from the second interim report and the projected year totals, we see small changes to the district’s revenue (-$2M) and expenditures (+$1M). 

Restricted Funds – If we look at restricted funds — money that the district can only use in limited ways — we see an increase in revenues (+$4M) due to revisions to Local Control and Funding Formula (LCFF) funding, adjustments to State and Federal awards (including $0.6M in new State COVID relief funds and $1.2M in Medi-Cal Administrative Activities (MAA) funds, and additional local revenues. We also see a large decrease in expenditures (-$13M) largely due to a decrease in supplies to align with prior year spending patterns in restricted resources.

Slide 4

Long-Term Outlook: When we look at the multi-year projections, we begin to see the true impact of the current recession on OUSD. The district is now projecting that LCFF funding will drop by more than $30 million next school year, creating a nearly $35 million hole between the district’s planned expenses and their anticipated revenues. While the district can stay solvent next year based on their reserve, in the 2021-22 school year, they are anticipating a deficit of more than $41 million. We do not yet know how the district plans to close this gap, but should expect to learn more in the coming weeks. 

Slide 9

A Note on Tonight’s Board Meeting Agenda

In addition to the third interim report, the district will share the latest update on the Blueprint for Quality Schools (item #20-1023), a plan to address historic inequities while increasing school quality and financial sustainability across Oakland schools. . Changing school size and location is one way to increase quality, equity and sustainability. The District will share a high-level overview of the current status of the Blueprint process and the latest timeline to decide which schools will be part of Cohort 3 – the next round of mergers, expansions, closures, consolidations. They will use the remainder of this spring summer to begin to engage smaller school communities (i.e. SSC’s) and the beginning of the school year to meet with site communities. The 1st read of Cohort 3 schools will take place in the fall. You can find the full board meeting agenda here.

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