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Sacramento City Unified Interim financial officer Lisa Grant-Dawson provides a fiscal solvency plan update during a board meeting at the Serna Center In February.<\/p>\n
JOS\u00c9 LUIS VILLEGAS<\/p>\n
jvillegas@sacbee.com<\/p>\n
The Sacramento City Unified School District board did not take well Thursday night to news that the district\u2019s financial situation looks worse<\/a> than it did earlier in the year despite the adoption of a fiscal solvency plan back in November.<\/p>\n When last updated on the budget, board members were told that $63 million in fiscal solvency plan savings put them about $71 million from making up a $134 million deficit.<\/p>\n But the second interim budget update showed that the district was another $37 million in the hole, meaning that it is still looking at a deficit of $108 million by the end of June. The district also has to make up additional money to account for the state required 2% reserve.<\/p>\n SCUSD will also bring in outside help, including former chief business officers from other school districts, to untangle the budget situation.<\/p>\n Despite the harrowing shortage, the district will remain cash solvent<\/a> through the end of the school year. In essence, the district will have money in its checking account while it waits for a large credit card bill to arrive in the mail.<\/p>\n But cash is running out quickly. New projections show the district running out of spendable funds by the fall \u2014 an event that would trigger a takeover by the state.<\/p>\n Slow path to fiscal solvency<\/p>\n Interim Chief Business Officer Lisa Grant-Dawson presented the findings of the second interim budget Thursday night.<\/p>\n \u201cWhy is the deficit still here?\u201d she asked, \u201cBecause we needed a concentrated plan some time ago in order to prevent us from getting here in 2026.\u201d<\/p>\n Grant-Dawson said that a $100 million deficit has been \u201cchasing\u201d the district for years, and pointed out increased costs due to the labor contract signed in September with the teachers union.<\/p>\n Trustee Taylor Kayatta defended the board\u2019s actions to address their fiscal situation in the past year, pointing to an adopted plan to reduce administrative positions that he says was not implemented by staff in a timely manner and $80 million in unexpected spending that wasn\u2019t identified until after the contract was ratified.<\/p>\n \u201cLooking back a little bit further, we approved a series of bargaining agreements in this year and in the previous year that we knew were going to make our budget be tight, but we had a plan to fund it,\u201d he said.<\/p>\n Board President Tara Jeane shared frustration about the district\u2019s path to fiscal solvency. She urged Grant-Dawson to accept additional support to hurry the process.<\/p>\n \u201cYour job is to bring us numbers \u2014 and we can be very upset about the numbers \u2014 but I hope it\u2019s clear that for us, it\u2019s not just the numbers, it\u2019s the process,\u201d she said. \u201cA month ago, I made a request that we would be able to look at a potentially qualifying budget, and the budget we have in front of us is definitely, obviously negative.\u201d<\/p>\n Earlier in the evening, Interim Superintendent Cancy McArn said that the district will recruit the services of two recently retired chief business officers from other school districts and the board voted to hire for the previously frozen chief business operating officer position.<\/p>\n \u201cI\u2018m excited to see that we\u2019ll have a right hand and a left hand for you, additional CBO supports, so that we can uncover things faster, so that we can get to decisions faster,\u201d she said. \u201cBecause the team needs the info it needs to be able to work collectively on the fiscal solvency plan that\u2019s going to get us not only qualified, but back to positive.\u201d<\/p>\n Spending still out of control<\/p>\n The second interim budget presentation also revealed that spending with third party contractors has not gone down as much as was projected at the first interim update. The district is set to spend about $34 million more than expected on contracts, most of which are related to special education.<\/p>\n Special education costs continue to skyrocket \u2014 the district expects to spend $172 million on special ed this year. Last year the district contributed $134 million to special ed, which was $13 million over budget.<\/p>\n Carl Pinkston of the Black Parallel School Board, which sued the district over its treatment of Black students with disabilities, voiced his concern about these figures in a public comment.<\/p>\n \u201cI\u2019m really concerned in the sense that in the past, it\u2019s never been this high,\u201d he said. \u201cThen all of a sudden, one year it exploded. So is it because non-public services got out of hand? Is it because nobody\u2019s not watching the shop as they\u2019re just spending money all over the place? I\u2019m just deeply concerned.\u201d<\/p>\n In an effort to get its finances under control, Sacramento City Unified School District is looking at hiring a consulting firm to help fix its fiscal crisis that will put it in a $394 million deficit by 2027-28.<\/p>\n \u201cWe need help helping ourselves,\u201d McArn said.<\/p>\n McArn presented the district\u2019s \u201cmulti-layered\u201d approach to fiscal solvency at a board meeting Thursday night, which included the prospective contract for the consultant among several other concurrent strategies and the addition of several additional support positions for the budget department.<\/p>\n The district recently issued pink slips to every member of its central office, a move to entirely restructure the central office amid the financial crisis.<\/p>\n The Serna Center will not be empty come July 1, but it will look entirely different. In the next few months, leaders will not only lay off dozens of employees but reorganize remaining workers into new departments and teams.<\/p>\n Trustees also opted to hire an external auditor to evaluate its financial practices in the 2024-25 school year.<\/p>\n
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