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Recently Formed Twin Rivers District Survives "Perfect Storm" By Implementing Budget Flexibility to the Max

By Jeff Hudson - June 29, 2011

(Third in a series)

In late May, the RAND Corporation released a preliminary report, “Deregulating School Aid in California - How Local Educators Allocate Flexible Tier 3 Categorical Funds: Findings from 10 School Districts in the First Implementation Year, 2009-2010.”

After examining the situation in ten school districts, the report concluded that California school districts – wielding new fiscal flexibility granted by state lawmakers – had cut deeply into several popular programs to balance local budgets, due to financial hardship brought on by the state budget crisis.

As a follow-up, EdBrief sought opinions and feedback to the RAND report from some high level administrators in California school districts. This week’s conversation is with Rob Ball, who is Associate Superintendent Business Support Services and Chief Business Official with the Twin Rivers Unified School District (TRUSD), in the Sacramento area.

The Twin Rivers District encompasses over 120 square miles in the communities of Del Paso Heights, Foothill Farms, McClellan Park, North Highlands, North Natomas, North Sacramento, Rio Linda and other unincorporated areas in northeastern Sacramento County and southwestern Placer County.

The District Office is on the old McClellan Air Force Base, now a business complex known as McClellan Park.  The Twin Rivers District came into being on July 1, 2008 with the unification of three elementary districts (Del Paso Heights, North Sacramento and Rio Linda) and the Grant Joint Union High School District.  

The communities served by the Twin Rivers District were hit hard by the recession, with a significant number of closed businesses, vacant storefronts and housing foreclosures.  Additionally, there is also a moratorium on new construction in the low-lying North Natomas and Rio Linda areas due to a change in flood plain maps and levee construction mandated by the U.S. Army Corps of Engineers. 

The Twin Rivers District’s student demographics include many schools with high percentages of Latino students, many of whom are English Learners coming from low-income households.
The Twin Rivers District serves around 30,000 students, 81% of whom receive free or reduced price lunch, spread over 57 school sites, including five district-approved charter schools.
Rob Ball began as the second employee hired in TRUSD on January 1, 2008 and has served in a county office and four other school districts throughout California over his career.

When asked what budget flexibility had meant to the Twin Rivers district, Ball said, “without the flexibility from Tier III programs, federal ARRA funds and employee concessions, we would have been in receivership early in this fiscal crisis.”

“As the state budget crisis kicked in beginning with the 2008-09 first fiscal and school year for TRUSD, we knew from the beginning that we would be in fiscal crisis, with our hands tied,” Ball said.  Upon unification, the district could not lay off any certificated employees since the March 15th deadline had passed.  Also, Education Code required that no reductions could be made to classified employees for two years after unification.

Although unification should have provided additional Revenue Limit funding of $18.7 million to “level up” salaries and benefits, the amount provided by the State is limited by law to 10% ($15.3 million) and the state applied a deficit to that amount in the first year with no ability to reduce salary and benefit expenditures.

“So we began the new District with the perfect storm,” Ball said. “No new money, and higher expenditures, with no way to reduce 85% of those expenditures, and a 7.844% deficit applied.  Fortunately, we had good reserves starting the first year, or we could not have made it through”.

“That first year, we tightly limited expenditures anywhere we could.  When we got flexibility, we implemented fund shifts of over $1.8 million and swept ending balances totaling over $4.3 million just to make ends meet,” Ball continued.  “In 2009-10 we swept an additional $365,000 and flexed over $5.4 million after convincing our school board that these were necessary for fiscal stability and their own jobs as Board members.   There are always programs that a school board trustee doesn’t want to cut.  But over time, as the state budget crisis got worse and worse, the school board saw the necessity of making cuts to programs that they would have preferred to leave intact.”

As was the case in the Pajaro Valley and San Mateo Union High School districts (profiled earlier by EdBrief), one of these programs cut in Twin Rivers was Adult Education.
“We had a very large Adult Ed program,” Ball said – a reflection of the district’s low socio-economic demographics with a high percentage of immigrants from Mexico, as well as significant numbers of California-born citizens who did not finish high school.

“In the first round in 2008-09, we only took $500,000 from Adult Ed,” Ball stated. “But in the second round, our board realized that we either cut more programs that benefit the kids or reduce our Adult Ed.”

“The next year we cut over $2 million out of Adult Ed and we are expanding that to $3.5 million for 2011-12.  This leaves Adult Ed with just over $2 million to operate.  They have a commitment to expand the fee-based classes such as truck driving, carpentry and HVAC repair and reduce the number of classes such as ELA that don’t receive direct income.”

“Our teachers bargaining unit stepped up to the plate and agreed to a salary schedule that Y-rated quite a few employees and accepted a reduced work year in 2008-09 that took away 3.5 work days before the State reduced the school year to 175 days.  The teachers agreed to reduce the school year by 4 days and take another half day off outside the school year.  Our classified bargaining unit finally agreed to a uniform salary schedule and a ‘me too’ clause for furlough days.  We have managed to schedule the days within the calendar to have the least impact on student learning.  Few people feel that reducing the amount of time students are in school is a good idea, but finances dictated big cuts, and salaries and benefits make up the biggest expense” in the district’s budget,” Ball said.

“However, we are one of the few school districts who can still afford a Summer School program,” Ball added. “Although we had a full program last summer, we had to tighten the belt this year.  We are running programs at most of our schools for students who are below or far below basic.  We found funds to include home-to-school transportation.”

“We have also used flexibility to the maximum,” he continued. “For example, Class Size Reduction (CSR) classes in grades K-3 will be filled to the maximum (31 students) in 2011-12 (they were at 25:1 in 2010-11) and we have to accept the 30% penalty.  However, that lost income is less than the cost to hire back additional teachers to keep the classes smaller.  We haven’t purchased new textbooks, even though each of the three elementary districts used different texts before the merger.  We reduced counselors at the junior highs and high schools to a maximum of one per grade level, which greatly increased the student to counselor ratios.  We also eliminated them in elementary schools.”

Ball believes the State fiscal crisis won’t be over soon.  “I expect to see this extend into 2015-16 at a minimum and possibly beyond.  Flexibility will remain a critical component for our district as long as flexibility is around.  Our negotiated staff furlough days and no salary COLAs end June 30, 2013.  If we don’t negotiate for additional years (for these measures), we will need to come up with another $3 plus million for that.  In 2014-15 when the CSR flexibility ends, we need to come up with more than $5.8 million to replace teachers and reduce class sizes.  Then, if Tier III flexing ends we need an additional $7.3 million to go back to normal operations.”

Ball said “I agree with (Pajaro Valley Unified’s CBO) Brett McFadden that the funding flexibility has been the best categorical policy reform I have ever seen.  Even though we had reductions to categorical programs years ago when the State instituted the categorical block grants, there are still too many categorical programs.  I believe Assembly Bill 18 (Brownley - D Santa Monica) is a great start to streamline these programs to allow us to get the money to where it’s most needed . . .  the kids.  We can’t afford to hire additional teachers with our categorical funds; we hire additional district office staff to track the expenditures and complete the required reports.  We can’t go back to the way the state funded us in the 20th century.  Back then we created categorical programs just because some special interest group went to the Legislature and got attention.”

“We need to look at this from a systematic standpoint,” Ball said. “I like the additional funding categorical programs provide, but we don’t get enough funding to provide a decent education for all.  We can’t continue to provide an equivalent education when we spend over $7,200 less per student than they do in the state of New York.  Our teachers can’t educate our students when our ratio of teachers to students ranks dead last in the nation.  We can’t continue to educate the way we’ve always done it when our demographics are so dramatically different.  California has identified about 25% English language learners compared to New York’s 7.6%.  We have fewer white students than New York (28% to 52%), more Hispanic/Latino students (48% to 21%) and more Asian/Pacific Islanders (11% to 7%).  We have greater demands on our limited funds and fewer funds to compensate for those needs.  We need to improve the K-12 education funding and continue to provide greater flexibility at the local level.”

To read the May 26 story in EdBrief about the RAND Corporation study, “Deregulating School Aid in California - How Local Educators Allocate Flexible Tier 3 Categorical Funds: Findings from 10 School Districts in the First Implementation Year, 2009-2010,” click the link below:
http://www.educationmediagroup.com/reports110526_135.php

To read the complete report, click on the link below:
http://www.rand.org/pubs/reprints/RP1426.html

Editor's Note:  Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writer in print, radio and television media.