THE GENERAL OF THE TO
ACCOMMODATE SOME SCHEDULES -- I
HAVE A MEMBER WHO.
NEEDS TO MAKE A PRESENTATION ON
K. THROUGH -- TWELVE SCHOOL
FACILITIES AN ALTERNATIVE
PROPOSAL FOR PURPOSES OF
POTENTIALLY ENDING INTO THE
BUDGET IT'S ISSUE NUMBER.
FIVE WE'LL GO AHEAD AND TAKE
ISSUE NUMBER FIVE FIRST AND THEN
WE WILL MOVE -- TO ISSUE NUMBER.
ONE SIR REQUIRE PLEASE JOIN US.
WE ARE ON PAGE SHOULD TWENTY
EIGHT OF MY AGENDA.
SIR PLEASE PROCEED.
GOOD MORNING MISTER CHAIR I I
WANNA TAKE A MOMENT TO SAY THANK
YOU FOR THE OPPORTUNITY TO BE A
TALK ABOUT PROP FIFTY ONE IN
FRONT OF YOU AND THE COMMITTEE
TODAY ALSO AS A THANK YOU YOUR
STAFF.
FOR REVIEWING THE PROPOSAL IS
WELL I IN -- BE -- QUITE QUICK --
BUT WANTED TO BE TO PROVIDE SOME
BACKGROUND ON WHY IN FRONT OF
YOU TODAY PURPOSE AND YOU KNOW A
BIPARTISAN COALITION OF MEMBERS
FROM BOTH THE STATE SENATE.%
IN THE ASSEMBLY.
CALIFORNIA VOTERS SPOKE LOUD AND
CLEAR IN NOVEMBER OF TWO
THOUSAND SIXTEEN WHEN THEY
PASSED PROPOSITION FIFTY ONE
WHICH IS THE SCHOOL BY MEASURE.
FOCUSES FOCUSING ON CONSTRUCTION
AND MODERNIZATION IN K. TWELVE
SCHOOLS COMMUNITY COLLEGE PUBLIC
SCHOOLS.
THE VOTERS OVERWHELMINGLY VOTED
IN SUPPORT OF INITIATIVE WHICH
WAS SUPPOSED TO REBUILD AND
MODERNIZE BECAME PUBLIC SCHOOLS
IN EVERY CORNER OF THE STATE TO
THE TUNE OF ABOUT NINE BILLION
DOLLARS. TO START WITH SOME GOOD
NEWS MISTER CHAIR WE'RE GRATEFUL
THAT GOVERNOR NEWSOME IS
RECOMMENDED ONE POINT FIVE
BILLION A PROP FIFTY ONE BOND
FUNDS IN ITS BUDGET.
ALONG WITH AN ADDITIONAL TEN
POSITIONS AT THE OFFICE OF
PUBLIC SCHOOL CONSTRUCTION -- IN
THESE.
POSITIONS ARE DESPERATELY NEEDED
TO BE ABLE TO PROCESS THE BACK
LOVER REQUEST THAT CURRENTLY
EXIST LET ALONE -- PROCESS THE
SIGNIFICANT NUMBER REQUESTED --
YET TO COME.
SINCE THE INTRODUCTION OF THE
TWO THOUSAND EIGHTEEN NINETEEN
BUDGET PROPOSAL FROM THE
GOVERNOR THE BACKLOG OF SCHOOL
CONSTRUCTION APPLICATIONS READY
FOR PROCESSING AND FUNDING HAS
INCREASED FROM ABOUT THREE POINT
TWO BILLION. TO FOUR POINT SEVEN
FIVE BILLION WE ALSO KNOW THAT
THERE ARE BILLIONS MORE OUT
THERE I THAT MAY NOT EVEN MAKE
THIS ROUND OF FUNDING.
AS A REMAINS AN URGENT NEED TO
INVEST THE REMAINING PROP FIFTY
ONE FUNDS AS QUICKLY AS POSSIBLE
WE NEED TO SELL THE REMAINING
FIVE BILLION VOTER APPROVED
PROPOSITION FIFTY ONE BONDS IN
FISCAL YEARS.
EIGHTEEN NINETEEN NINETEEN
TWENTY IN ORDER TO HAVE ALL
FUNDS APPROPRIATED TO LOCAL
EDUCATION EDGY AGENCIES BY JULY.
TWENTY TWENTY DELAY IN THE SALE
OF SCHOOL FACILITY BONDS NOT
ONLY UNDERMINES THE WILL OF THE
CALIFORNIA VOTERS WHO SPOKE LOUD
AND CLEAR BY PASSING PROPOSITION.
FIFTY ONE BUT IT ALSO DEPRIVE
STUDENTS OF SAFE IN MODERN
CLASSROOMS WHILE INCREASING
TAXPAYER COSTUME REDUCING BUYING
POWER.
NEW FACILITIES ARE DESPERATELY
NEEDED IN DISTRICTS AN AGING
SCHOOL FACILITIES REQUIRE
REPAIRS AND RECONSTRUCTION TO
ENSURE THE HEALTH AND SAFETY OF
OUR STUDENTS.
ELAINE NEEDED STATE FUNDING AND
BOND SALES INCREASES TAXPAYER
COST IS WELL AS WELL AS REDUCES
BUYING POWER THE FEDERAL
GOVERNMENT IS CONTINUE TO LOOK
AT INCREASING INTEREST RATES.
IN THE BOND MARKET IS RD
REFLECTING HIGHER INTEREST COSTS
TO SELL BONDS.
FURTHER STATEWIDE CONSTRUCTION
COSTS ARE ESCALATING
SIGNIFICANTLY -- BY 68% PER YEAR
WITH MUCH HIGHER RATES IN
MULTIPLE REGIONS DUE TO THE
DEVASTATING FIRES. FOR THESE
REASONS -- WE RESPECTFULLY
REQUEST TO MOVE FORWARD ON THE
REMAINING PROPOSITION FIFTY ONE
SCHOOL BONDS FOR THOSE PROJECTS
NO LATER THAN THE FISCAL YEAR
NINETEEN TWENTY AS THE VOTERS
HAVE CLEARLY STATED THEIR DESIRE
FOR THE STATE TO INVEST IN THE
CONSTRUCTION.
RENOVATION REPAIR A SCHOOL
FACILITIES AND MISTER CHAIR
AGAIN SINCERELY MEANNESS THANK
YOU FOR ALLOWING ME TO PRESENT
TODAY VERY VERY GRATEFUL SIR I
AM HAPPY TO ANSWER ANY QUESTIONS.
JUST TO JUST.
TO DO YOU HAVE AN IDEA AS TO
WHAT THE AMOUNT OF THE INCREASE
IN DEBT SERVICE WOULD BE.
ASSOCIATED WITH -- MAKING THE
FULL FIVE BILLION DOLLARS IN
REMAINING BOND FUNDS AVAILABLE
THROUGH US THE NEXT TO TWO
THOUSAND NINETEEN TWENTY OF
BUDGET PROCESS YES SIR IT'S IT'S
ESTIMATED SAYS AN APPROXIMATE
NUMBER FOR EVERY BILLION DOLLARS
WORTH OF BONDS IS GOING TO BE
ABOUT A SIXTEEN MILLION DOLLAR.
INCUMBENTS WITH THE STATE
GENERAL FUND. SIXTY MILLION FOR
EACH ONE BILLION AND BOND
APPROXIMATE YES SIR OKAY.
AND HAS IT BEEN ANY ASSESSMENT
OF THE MANNING SITUATION OFFICE
OF PUBLIC SCHOOL CONSTRUCTION
AND WHETHER THE AS TO WHETHER
THE ADDITIONAL MANNING THAT THE
GOVERNOR PROPOSES WILL BE
SUFFICIENT TO PROCESS -- THE
ADDITIONAL BOND -- APPLICATIONS
THAT YOU ARE PROPOSING IN THIS
ALTERNATIVE PROPOSAL.
I DON'T WANNA SPEAK FOR THE
GOVERNOR'S OFFICE IN NOR DO I
BUT WHAT I WOULD SAY THIS IS MY
OWN EDITORIAL -- WHAT'S BEING
RECOMMENDED.
I HAVE TO IMAGINE IS WHAT THE
OFFICE OF PUBLIC SCHOOL
CONSTRUCTION IS NEEDING ON AND
IS CURRENTLY SUPPORTING WITH IN
THE BUDGET -- THAT THE GOVERNOR
HAS PRESENTED -- WHAT I CAN TELL
YOU JUST FOR AT FIRST HAND
KNOWLEDGE THEY HAVE BEEN
EXTREMELY SHORT STAFFED AND THE
NUMBER OF BONDS IT NEED TO BE
PROCESSED AND I THINK THIS IS
GOING TO GO A LONG WAY -- PSC
HAS SENT A FABULOUS JOB WE WERE
WITH HIM VERY CLOSELY AND MANY
PROJECTS.
AND THEY NEED FOLKS IN THEIR
BEING ABLE TO GET THESE DOLLARS
PUT THE WORK AND I THINK IT'S
GOING TO MAKE SOME SERIOUS
HEADWAY I WITH THE INVESTMENT OF
TEN ADDITIONAL POSITIONS.
WELL I THINK -- I THINK WE ALL
ARE INTERESTED IN.
IN MOVING THE SCHOOL
CONSTRUCTION EFFORTS FORWARD AT
A RAPID PACE CONSISTENT WITH THE
DEMANDS ON THE GENERAL FUND IN
THE BUDGET AND YOUR IN -- YOU'RE
IN THE QUEUE THERE WAS WHERE
THANK YOU FOR PRESENTING THANK
YOU SO MUCH RICHER AND AGAIN I'M
GRATEFUL FOR YOUR TIME THANK YOU
FOR ALLOWING THE OPPORTUNITY
THANK YOU MEMBERS.
WE'RE GOING TO RESERVE PUBLIC
COMMENT UNTIL THE END OF ALL OF
THE ISSUES SO WE WILL NOW MOVE --
TO THE TOP OF THE AGENDA ITEM
SIXTY ONE HUNDRED ISSUE NUMBER.
ONE UPDATE ON K. THROUGH TWELVE
SCHOOL DISTRICT FISCAL HEALTH
THIS IS AN INFORMATION ONLY I
DON'T.
FINE THANK YOU FOR JOINING US.
YOU'RE FAMILIAR FACE AND THIS
BUDGET SUBCOMMITTEE I HEAR.
DESCRIBE SPENT SOME TIME HERE
[inaudible]
THANK YOU.
GOOD MORNING MISTER CHAIR -- IN
MEMBERS AND STAFF.
SENATE ROTH ALWAYS OF PLEASURE
TO INTERACT WITH YOU --
APPRECIATE YOUR SERVICES MY OWN
REPRESENTATIVE AT HOME AND IN
RIVERSIDE.
MIKE FIND A CHIEF EXECUTIVE
OFFICER OF THE STATE'S FISCAL
CRISIS AND MANAGEMENT ASSISTANCE
TEAM -- JUST HANDED OUT TO YOU
IS THE OUTLINE THAT I'M GONNA
FOLLOW HAPPY -- TO PAUSE AND
TAKE QUESTIONS AT ANY POINT --
SLIGHTLY DIFFERENT DATA THAN
WHAT IS IN YOUR STAFF REPORT --
SIMPLY BECAUSE WERE RIGHT AT THE
POINT WHERE SCHOOL DISTRICTS
WERE REPORTING THEIR SECOND IN A
ROOM.
REPORTING DATA AND THAT BECAME --
THE FINAL OF THE FIFTY EIGHT
COUNTIES REPORTED THAT TO US
YESTERDAY WHICH WAS JUST HOURS
AFTER STAFF PREPARED THEIR
REPORT AND SO -- HI I'M HAPPY TO
ADDRESS ANYTHING THAT'S IN THE
STAFF REPORT BUT WHAT I'VE
HANDED YOU OR AT LEAST THE
ATTACHMENTS I'VE HANDED YOU.
ARE UPDATED AS OF YESTERDAY
AFTERNOON.
SO AT FIRST INTERIM BACK IN
DECEMBER WHICH IS REFLECTED IN
YOUR STAFF REPORT -- THERE WERE
FORTY TWO QUALIFIED -- DISTRICTS
OF HISTORY HERE REMEMBER IT AT
BUDGET ADOPTION COUNTY
SUPERINTENDENTS REVIEW -- A
DISTRICTS BUDGET AND THEY GET
THREE OPTIONS ARE PROOF THE
BUDGET APPROVE IT WITH
CONDITIONS OR DISAPPROVE THE
BUDGET -- AND WE'LL TALK ABOUT
THOSE JUST APPROVALS IN JUST A
MOMENT.
AT FIRST OR SECOND INTERIM
REPORT SO FIRST IN A ROOM IS
DATA THROUGH OCTOBER REPORTED IN
DECEMBER.
THAT SENIOR STAFF REPORT SECOND
ENORMOUS DATA THROUGH JANUARY
REPORTED -- MID MARCH THAT WOULD
BE IN DATA THAT -- UNOFFICIAL
DATA THAT I'M SHARING WITH YOU --
THAT WE'VE SURVEYED EACH OF THE
COUNTY OFFICES OVER -- THE
COUNTY SUPERINTENDENT WHEN THEY
REVIEW INTERIM REPORTS -- THE
DETERMINATION SLIGHTLY
DIFFERENCE NOT AN APPROVAL OR
DISAPPROVAL PROCESS THE
DISTRICTS SELF CERTIFIES WHETHER
THEY'RE POSITIVE QUALIFIED OR
NEGATIVE.
POSITIVE IS THAT FOR THE CURRENT
INTO SUBSEQUENT YEARS THE
DISTRICT CAN MEET ALL OF ITS
FINANCIAL OBLIGATIONS
QUALIFIED IS THE DISTRICT MAY
NOT MEET ALL OF ITS OBLIGATIONS
IN THE CURRENT PLUS TWO
SUBSEQUENT YEARS AND IN NEGATIVE
WOULD BE THAT THE DISTRICT.
WILL NOT MEET ITS FINANCIAL
OBLIGATIONS IN THE CURRENT PLUS
ONE SUBSEQUENT YEAR.
AND THE COUNTY OFFICE IN THEIR
REVIEW THEN -- THE CURSOR DOES
NOT OCCUR WITHOUT SELF
CERTIFICATION AND IF THEY DON'T
CONCURRED IN THERE'S GENERALLY
SOME TYPE OF DOWNGRADE -- OF OF
THAT SO IF THE DISTRICTS OMITTED
POSITIVE THE COUNTY BELIEVES ARE
QUALIFIED THE COUNTY HAS THE
OPPORTUNITY TO CHANGE THAT.
THE SECOND IN REPORTING DATA
THAT I SHARE WITH YOU TODAY IS
ALL SELF CERTIFICATIONS JUST
TURNED IN IN THE LAST WEEK.
AND SO THE COUNTY OFFICES NOW OR
IN THEIR THIRTY DAY PERIOD OF
REVIEW AND SO ALL OF THIS COMES
FROM DISTRICTS IT IS NOT THE
RESULT OF ANY COUNTY OFFICE
REVIEW.
AT SECOND IN ROOM.
SHOW ME BACK UP AT FIRST AN ARM
DECEMBER THERE WERE FORTY TWO
DISTRICTS THAT WERE QUALIFIED
THIRTY NINE SELF QUALIFIED IN
THREE WHERE THE COUNTY OFFICE
CHANGE THEM.
FROM POSITIVE TO QUALIFIED. FOR
NEGATIVE BOND SELF
CERTIFICATIONS IN ONE COUNTY
OFFICE OF EDUCATION NEGATIVE
WHICH WAS A A QUALIFY DOWNGRADED
BY THE DEPARTMENT OF EDUCATION --
BEEN A LONG TIME SINCE WE'VE
SEEN A COUNTY OFFICE IN EITHER
THE QUALIFIED FOR NEGATIVE
CATEGORY.
AT SECOND IN REPORTING -- THERE
ARE TWENTY FIVE QUALIFIED SELF
CERTIFICATIONS DOWN FROM FORTY
TWO AT FIRST INTERIM.
AND REMARKABLY THE SAME NUMBER
THAT WE HAD A YEAR AGO ITSELF
THAT THE SECOND IN A ROOM AND
JUST A FOOTNOTE.
THE FIRST INTERNET FORTY TWO IT
FIRST IN ARM WAS THE SAME NUMBER
WE HAD A YEAR AGO IN DECEMBER --
SO WE'RE ON A ROLL HERE MATCHING
YOUR YEAR TO YEAR.
IT IS NOT UNUSUAL TO SEE A DROP
IN QUALIFICATIONS.
BETWEEN FIRST INTERMENT SECOND
AN ARM THE MAIN DIFFERENCE
BETWEEN THOSE TWO POINT IN TIME
WHEN WE'RE LOOKING OUT OVER THE
THREE YEAR PERIOD.
IS IN FACT THE GOVERNOR'S --
BUDGET PROPOSAL ON JAN TEN
BUDGET AND THE JANTAN BUDGET
PROPOSAL THIS YEAR -- WAS --
MORE POSITIVE THAN DISTRICTS HAD
EXPECTED LAST DECEMBER WHEN THEY
WERE FILING THEIR FIRST IN ARM
HAS A HIGHER COLOR TO IT -- HAS
THE PROVISION FOR ASSISTANCE
WITH REGARD TO THE STIRS RATE --
AND HAS -- SOME FUNDS ALLOCATED --
IN SPECIAL AT ALL OF THOSE
OBVIOUSLY IMPROVED THE OUTLOOK
THE DISTRICTS HAD -- ON ON THEIR
BUDGET STARTING NEXT YEAR AND
CAN GOING ON THEY'RE ALSO FOR
NEGATIVE SELF CERTIFICATIONS --
SAME SAME AS AT FIRST IN ROOM.
AND THE SAME DISTRICTS THERE
WERE FOUR LAST YEAR THE ALSO
HOWEVER WITH THE EXCEPTION OF
ONE THEY ARE FOR THE THREE OF
THEM ARE DIFFERENT DISTRICTS AND
AS I THINK THIS COMMITTEE.
IS AWARE -- DISTRICTS GENERALLY
DON'T STAY AT THE NEGATIVE
CERTIFICATION LEVEL LONG A LOT
OF ASSISTANCE COMES THEIR WAY TO
IMPROVE THEIR CONDITION.
TURN THE CORNER AND GET THEM
BACK TO FISCAL HEALTH -- THE
DISTRICT THAT REMAINS FEATHER
FALLS -- UNION ELEMENTARY BUTTE
COUNTY HAS BEEN THERE FOR
SEVERAL YEARS THEY WILL CEASE TO
OPERATE AS A DISTRICT THIS JUNE.
THEY HAVE TEN KIDS LEFT FIVE OF
WHICH ARE IN EIGHTH GRADE TWO K.
EIGHT DISTRICT AND ONCE THOSE
FIVE KIDS PROMOTE -- A
NEIGHBORING DISTRICT WILL SERVE --
WHAT IS CURRENTLY FEATHER FALLS
THAT HAS BEEN THE PLAN FOR
SEVERAL YEARS THE COUNTY OFFICE
BUTTE COUNTY OFFICES BEEN
SUPPORTING THEM?
FINANCIALLY TO GET TO THIS POINT --
TO GET THESE FIVE EIGHTH GRADERS --
BASICALLY GET THESE FIVE KIDS
THROUGH EIGHTH GRADE BEFORE
CHANGE WAS MADE.
THE FOUR NEGATIVES BEYOND
FEATHER FULL OF THE ADDITIONAL
THREE BEYOND -- IS SACRAMENTO
CITY UNIFIED WHICH I KNOW WHERE
THE REPRESENT THE AREA OR NOT
YOU READ A LOT ABOUT SIMPLY
BECAUSE OF WHERE WE'RE AT
SOUTHERN KERN IN KERN COUNTY IN
SWEETWATER.
UNION IN SAN DIEGO COUNTY WE
HAVE ONE LACK OF GOING CONCERN
THIS IS VERY SIMILAR TO A
NEGATIVE.
THE DIFFERENCE IS THE COUNTY
OFFICE HAS THE AUTHORITY TO
DESIGNATED DISTRICT AS LACK A
GOING CONCERN AT ANY TIME DURING
THE YEAR AS OPPOSED TO JUST.
IN THE BUDGET REVIEW PROCESS --
IN THAT WOULD BE OFFERED UNIFIED
IN -- RIVERSIDE COUNTY.
AND AS I'VE MENTIONED WE HAVE
ONE COUNTY OFFICE IT'S NEGATIVE
THIS IS AMADOR COUNTY -- UP THE
ROAD A BIT -- FROM HERE -- THIS
IS A SINGLE DISTRICT COUNTY.
ON THE SCHOOL DISTRICT IS
QUALIFIED WITH THE COUNTY
OFFICES NEGATIVE THEY ARE
COMPLETELY -- INTER TWINED -- IN
THERE'S BOTH THE FINANCES AND
THEIR SERVICES THEY HAVE A
COMMON BOARD.
BUT AS OF JANUARY FIRST HAVE TO
SUPERINTENDENTS SO THE ELECTED
THE UP TO JANUARY FIRST THE
DISTRICT SUPERINTENDENT COUNTY
SUPERINTENDENT WERE ONE AND THE
SAME.
THE VOTERS IN JUNE ELECTED A
DIFFERENT PERSON TO BE THE
COUNTY SUPERINTENDENT SO YOU
HAVE THAT ADDITIONAL -- SOUR
BURDEN AND NOW YOU HAVE A A
LITTLE BIT OF OF OF SPLIT FROM A
LEADERSHIP STANDPOINT IN IN
DIRECTION.
MAY I ASK A QUESTION ABSOLUTELY
IT'S FUN WHAT DO YOU SEE
HAPPENING WITH RESPECT TO THE
ONE DISTRICT THAT -- STILL HAS
BEEN DESIGNATED BY THE COE AS A
LACK OF GOING CONCERN OVER.
SO I WILL I WISH I HAD POSITIVE
NEWS THERE SENATOR -- SPECIALLY
FOR YOU -- IS SINCE THIS IS IN
IN YOUR DISTRICT -- OUR TWO
WEEKS AGO STAFF AND RECOMMENDED
A NUMBER OF BUDGET CUTS TO BRING
THEM IN -- TO A STRONGER FISCAL
HEALTH THE BOARD OPTED NOT -- TO
APPROVE ANY OF THEM.
THEY ISSUED NO MARCH FIFTEENTH
NOTICES OF WHICH SOME WERE
IMBEDDED IN THOSE CUTS NOT ALL --
AND SO THE WINDOW OF OPPORTUNITY
TO CORRECT THIS IS CHANGE THE
APPROACH TO CHANGE IT -- WE WERE
THERE WE HAD A TEAM THEIR LAST
WEEK LAST WEDNESDAY THURSDAY AND
FRIDAY.
THIS WOULD BE OUR FOURTH VISIT --
IN THREE MONTHS.
THE TEAM LAST WEEK WAS THERE
SPECIFICALLY DO A FISCAL HEALTH
RISK ANALYSIS THAT WILL GIVE US
A LITTLE BETTER SENSE -- NOW
FACT NOT ABLE TO FACTOR IN THOSE
CUTS THAT WERE PROPOSED -- AND
SO FOR ALL INTENTS AND PURPOSES
A LACK A GOING CONCERN IS THE
SAME AS A NEGATIVE.
IT JUST CAN HAPPEN AT ANY POINT
THIS HAPPENED IN NOVEMBER --
INTERESTING THE DISTRICTS
SUBMITTED ITS SECOND ENORMOUS
QUALIFIED.
NOT QUITE SURE HOW YOU ARE A
LACK GOING CONCERNING YOUR
QUALIFIED -- SO THAT'LL BE A
CONVERSATION PROBABLY NEED TO
HAVE A COUNTY OFFICE ABOUT.
MOST LIKELY DOWNGRADING THAT TO
A NEGATIVE.
THE RIGHTS YOUR QUESTION IS.
I DON'T HAVE A AN ANSWER AT THIS
POINT -- WHAT ARE THE TYPICAL
NEXT STEPS IF WE'VE EVER SEEN A
SITUATION LIKE THIS BEFORE YES
SO TYPICAL NEXT STEPS ARE THIS
THE LOCAL ELECTED SCHOOL BOARD
STEPS UP AND HAS WHAT THEY
NEEDED TO DO?
THEY DIDN'T DO THAT TWO WEEKS
AGO -- THEY CITED A LACK OF
CREDIBILITY IN THE NUMBERS --
THE DISTRICT HAS HAD A STRONG --
BUSINESS OFFICER THE LAST TWO
YEARS -- SHE'S INDICATED SHE
WILL NOT STAY BEYOND JUNE GIVEN
THE CIRCUMSTANCES -- AND SO I
DON'T BELIEVE WE HAVE ANY
CONCERNS WE AS AN AGENCY DON'T
HAVE ANY CONCERNS ABOUT THE
CREDIBILITY THE NUMBERS.
BUT CLEARLY THE DISTRICT BOARD --
WAS NOT WILLING TO ACCEPT
STAFF'S RECOMMENDATIONS SO --
THE SUPERINTENDENT'S NEXT STEP
THE DISTRICT SUPERINTENDENT --
OFFICE IS PART OF THE
GOVERNMENT'S TEAMS NEXT STEP IS
TO COME UP WITH AN ALTERNATIVE
SET OF CUTS THEY NEED O MAKE
CUTS -- THE DIFFERENCE YEARS
THAT WON'T INVOLVE ANY --
CERTIFICATED STAFF BECAUSE WILL
BE PASSED THAT WINDOW OF
OPPORTUNITY. FOR ME TO GET YOU
OFF TO REFUND.
JUST WHAT WHAT'S THE DIFFERENCE
BETWEEN.
I'M QUALIFIED AND LACK OF GOING
CONCERN AN UNQUALIFIED.
SO QUALIFY A WOULD IT BE SO IN
ALL CASES WERE LOOKING AT A
THREE YEAR WINDOW CURRENT YOUR
PLUS.
TO QUAL POSITIVE WOULD BE A
EVERYTHING IS WHERE IT'S
SUPPOSED TO BE.
QUALIFIED WOULD BE THEY MAY NOT
MEET THEIR OP FINANCIAL
OBLIGATIONS OVER THE THREE YEAR
WINDOW.
NEGATIVE IS THEY WILL NOT AND WE
GENERALLY SHORTEN IT TO A TWO
YEAR WINDOW.
BLACK A GOING CONCERN -- LOOKS
VERY MUCH LIKE A NEGATIVE --
LANGUAGE AROUND IT
INTERPRETATIONS A TAD DIFFERENT
BUT THE INTER THE LIST OF
INTERVENTIONS AVAILABLE TO THE
COUNTY SUPERINTENDENT IS ALMOST
EXACTLY THE SAME.
AND FROM A PROCEDURAL SAMPLE THE
WAY WE TREAT THEM UP ALMOST
IDENTICAL TO A NEGATIVE DISTRICT
A NEGATIVE CERTIFICATION. TO
HELP CENTER.
I WONDER WHY THEY CREATE ON THE
CATEGORY BUT THAT'S THE WAY
BUREAUCRACY Là TIME IT'S A
TIMING ISSUE -- SO THE
CERTIFICATIONS APOLOGY QUALIFIED
IN NEGATIVE HAPPENED WHEN THE
COUNTY IS WHEN THE DISTRICT THIS
IS -- DOING ITS FIRST AND SECOND
IN A ROOM.
IF SOMETHING CHANGED IN BETWEEN
THOSE POINT IN TIME THE COUNTY
SUPERINTENDENT HAS THIS
ADDITIONAL TOOL -- THAT IS A
THAT'S REALLY IRRESPECTIVE OF
TIME IT COULD HAPPEN THE DAY
AFTER THE ENORMOUS SUBMITTED.
A DISTRICT COULD COMMIT A
POSITIVE INTERIM AND SOMETHING
CHANGE OVERNIGHT -- THE AVERAGE
SITUATION WHERE BOARD ELECTED
NOT TO MAKE CUTS THE CUTS MAY
HAVE DOES ANY OF THE DISTRICT AS
POSITIVE JUST.
USING A FOR EXAMPLE -- THEY
SUBMITTED THEIR IN A ROOM WITH
THE ANTICIPATION THE BOARD WAS
GOING TO ADOPT THOSE -- THEN ALL
OF A SUDDEN A BOARD DOESN'T
ADOPT THEM IN THIS CASE AND
OVERNIGHT.
THEN THE COUNTY WOULD HAVE BEEN
ABLE TO MOVE THEM FROM -- A TO A
LACK A GOING CONCERN IN FACT
USING OFFERED AS EXAMPLE THAT IS
WHAT HAPPENED LAST NOVEMBER.
THERE ARE THERE BUDGET WAS
APPROVED BY THE COUNTY IN
SEPTEMBER.
BUT THEN BY NOVEMBER -- THING
SAID WHAT HAPPENED DOWN HILL BUT
WHY SUCH A DRAMATIC CHANGE IT WE
JUST.
WOULDN'T DESCRIBE IT IS PROBABLY
DRAMATIC -- JUST STAY PROGRESS
INSTEAD OF PROGRESS SEEN
REGRESSED THEY REGRESS.
OKAY AND IT BECAME VERY APPARENT
IN NOVEMBER THAT THAT REGRESSION
WAS I WAS FAIRLY SIGNIFICANT ARE
ANDERSON THANK YOU [inaudible]
YES ABSOLUTELY.
THANK YOU GOOD MORNING.
I GUESS YES IT IS STILL MORNING
SO.
IT THE DAYS KIND OF RUN TOGETHER
SO IN THE CASE OF ALL VERGE
UNIFIED THAT WE'RE TALKING ABOUT
IS IT UNUSUAL OF THAT THE BOARD
WOULDN'T TAKE YOUR ADVICE.
SO IT ISN'T IS NOT OUR ADVICE IN
THIS CASE IT WAS DISTRICTS
STAFF'S ADVICE THE
SUPERINTENDENT AND OKAY THE
APPROPRIATE STAFF'S ADVICE SO IS
IT IN A THEN.
YEAH OKAY CASE LIKE THIS YOUNG.
BOY BOARDS.
BOARDS OFTEN DO NOT.
ALWAYS ADOPT STAFF'S
RECOMMENDATIONS BUT IN A CASE
LIKE THIS THESE WERE NOT OUT OF
THE SKY CUTS THESE WERE CUTS
THAT HAVE BEEN DISCUSSED FOR
MANY WEEKS MANY MONTHS.
THE FINANCIAL CONDITION THE
DISTRICT HAS BEEN WIDELY KNOWN
THEY'VE HAD A BUDGET THANK
BUDGET VISOR COMMITTEE MADE UP
OF THEIR LABOR PARTNERS AND
COMMUNITY MEMBERS AND OTHER
STAFF MEETING FOR MONTHS I'VE
ACTUALLY PRESENTED TO THEM BACK
IN -- EARLY DECEMBER I THINK IT
WAS A MAYBE END OF NOVEMBER
CAN'T RECALL NOW -- TO GIVE THEM
KIND OF A AN OVERVIEW OF PROCESS --
SO THE THE LACK OF SUPPORT BY
THE BOARD ON A GIVEN EVENING WAS
NOT EXPECTED OKAY AND TIMING WAS
SUCH.
I HAVE TO THINK ABOUT TWO WEEKS
AGO I BELIEVE THAT WAS THE
FOURTEENTH FIVE IF I HAVE MY
DATES RIGHT -- THAT LEFT NO
ALTERNATIVE.
AHEAD OF MARCH FIFTEENTH.
RIGHT SO COMPLETELY CHANGES NOW
THE LANDSCAPE OF WHAT CUTS ARE --
POTENTIALLY AVAILABLE TO THE
DISTRICT EVEN TO ACT ON NOW
SUBSEQUENT SO THEY'RE PROBABLY
GOING THE WAY OF A NEGATIVE
CERTIFICATION BUT WHAT I'M MORE
CONCERNED ABOUT IS IF THEY DON'T
MAKE THE CUT.
THEN WILL THE SCHOOL LIKELY
CLOSE.
NO NO NO THIS IS IT JUST THIS IS
A DISTRICT OF TWENTY THOUSAND
WITH -- WHILE I SHOULD KNOW THIS --
EIGHTEEN SCHOOLS AT LEAST THREE
HIGH SCHOOLS AND AN ALTERNATIVE
HIGH SCHOOL -- PLUS NUMEROUS --
ELEMENTARY SCHOOLS SO NO THE
NEXT STEP IN THIS PROCESS FOR
THE COUNTY WOULD BE.
IF THE DISTRICT DOESN'T ADOPT
ALTERNATIVE CUTS IN THEIR IN
JUNE FOR THEIR ADOPTED BUDGET
THAT'S EFFECTIVE JULY.
ONE THE NEXT OPTION THE COUNTY
HAS WOULD BE TO DISAPPROVE THEIR
BUDGET FOR THE NEW YEAR.
THAT SETS IN MOTION THEN A
PROCESS IT'S FAIRLY LAID OUT IN -
PROCESS IT'S ARTICULATED FAIRLY
WELL IN CODE -- THERE ARE TO
PASS ONE IS WHAT'S CALLED A
BUDGET REVIEW COMMITTEE PROCESS
WHICH IS LAID OUT IN SOME DETAIL
IN THE LAST DECADE WE'VE USE
THAT PROCESS ONCE.
IT CAN BE WAIVED WHICH IS TO
ADDITIONALLY WHAT HAPPENS -- BY
AGREEMENT BETWEEN THE COUNTY
SUPERINTENDENT IN THE DISTRICT'S
BOARD THEY WAVE THAT PROCESS.
AND THEN CD E. GENERALLY AGREES
IF IF YOU'VE GOT AGREEMENT LOCAL
USED CD WOULD GENERALLY AGREE
WITHOUT -- AND THEN THEY WILL
THEY WILL GO THROUGH A PROCESS
TO WORK THINGS OUT -- UP TO THE
DECEMBER TIME PERIOD.
THEY DO CONTINUE TO HAVE
AUTHORITY TO SPEND BECAUSE THE
LOCAL BOARD HAS ADOPTED A BUDGET
IT'S THE COUNTY SUPERINTENDENT
THAT IT DOESN'T MEET THE
CRITERIA IS UNABLE TO APPROVE IT.
SO THIRTY TO SPEND DOES CONTINUE --
BUT ULTIMATELY THEY'LL HAVE TO
DEAL WITH.
WITH THE FACT THAT THE BUDGETS
OUT OF OUT OF WHACK SENATE SO
UPSIDE DOWN BUDGETS ULTIMATELY
RESULT IN A LACK OF CASH.
IF YOU ARE SPENDING MORE THAN
YOU'RE BRINGING IN BALTIMORE
YOUR BANK ACCOUNT NOT THE BUDGET.
THE BANK ACCOUNT ITSELF --
BEGINS TO DRAIN -- INSOLVENCY IS
DEFINED IN CALIFORNIA IN K.
FOURTEEN AS YOUR INABILITY TO
MEET PAYROLL FROM A CASH
STANDPOINT.
SO TO PAY YOUR EMPLOYEES.
AND THAT IS WHAT TRIGGERS WHAT
YOU ALL KNOW OF IS THE GENERAL
TERM OF A STATE TAKEOVER.
WOULD BE TAPPED AND SO OUR ROLE
IN THAT IS TO FORECAST HELP
FORECAST.
IF THEY MAKE NO CORRECTIVE
ACTION HELP FORECAST THAT POINT
IN TIME BACK UP SO THAT WE CAN
BE FAIR.
FOR FOR THIS.
LARGER BODY -- TO TALK ABOUT --
THAT HELP AYE I DON'T THINK
THAT'S THE COURSE.
I FULLY EXPECT THEM TO TURN.
OKAY CHANGE DIRECTIONS THANK YOU
FOR YOUR HELP ON THAT.
THANK YOU SIR WELL WE GET YOU
BACK ON TRACK YEAH.
NO NO YOU'RE FINE WE SHOULD THE
QUESTIONS -- NEXT CATEGORY IS
WHAT I'M CALLING THE BUDGET ACT
AUTOMATIC ENGAGEMENT AND SO --
HISTORICALLY THICK MAT HAS ONLY
ENGAGED WITH DISTRICTS WHEN
WE'VE BEEN INVITED TO THE
DISTRICT EITHER BY THE DISTRICT
OR THE COUNTY OFFICE. TO ASSIST
THEM SOMETIMES WE ARE SENT THERE
BY THIS BODY OR THE STATE
SUPERINTENDENT OR THE
ADMINISTRATION.
BUT GENERALLY SPEAKING NINETY
FIVE PLUS PERCENT THE TIME A
DISTRICT CALLED US AND ASKED FOR
HELP SOMETIMES IT'S THE COUNTY
OFFICE AFTER AGREEMENT WITH THE
DISTRICT.
CALLING TO ASK US FOR HELP IN
THE CURRENT YEAR'S BUDGET
ENGAGEMENT -- THERE'S A SINGLE
LINE THAT BASICALLY CALLS UPON
US TO BE MORE PROACTIVE IN
WORKING WITH FISCALLY DISTRESSED
DISTRICTS AND SO -- WE CALL THAT
INTERNALLY AUTOMATIC ENGAGEMENT
AS OPPOSED TO WAITING.
AND THERE ARE CERTAIN TRIGGERS
TO THAT AUTOMATIC ENGAGEMENT
THOSE ARE OUTLINED HERE IN.
IN THE DOCUMENT I PROVIDED THE
FIRST IS DISAPPROVED BUDGET SO
THAT'S A SEPTEMBER TIME PERIOD.
THERE WERE SIX ACROSS THE STATE
THIS YEAR UP FROM TO THE PRIOR
YEAR.
WE AUTOMATICALLY ENGAGED WITH
ALL SIX BUT WE ONLY WENT IN AND
WORKED WITH THREE OF THOSE. TWO
OF THE SIX THEY WERE TECHNICAL
ISSUES THAT WERE IMMEDIATELY
RESOLVED.
AND ONE OF THE SIX WHO IS IN THE
WOULD UNIFIED THAT WERE IN
BASICALLY EVERY DAY ALREADY --
AND SO THE OTHER THREE WE
ENGAGED WITHIN THOSE WERE
SACRAMENTO CITY.
SWEETWATER UNION IN SAN DIEGO
COUNTY.
AND CALAVERAS -- IN CALAVERAS
COUNTY.
AND WHEN WE WENT THERE -- WE
CONDUCTED A FISCAL HEALTH RISK
ANALYSIS AND I'VE GOTTEN AHEAD
OF MYSELF AGO BACK TO TRIGGERS
SORRY -- DISAPPROVED BUDGET IS
ONE OF THE FIVE TRIGGERS.
A NEGATIVE CERTIFICATION WE'VE
JUST TALKED ABOUT SOME OF THOSE.
AT IN ARMOR PORT. THREE
CONSECUTIVE QUALIFIED
CERTIFICATION SO DISTRICT THAT
STAYS IN THAT QUALIFIED STATUS
MORE THAN THREE IN A REPORT.
FIRST SECOND THE FOLLOWING YOUR
FIRST OR SECOND FIRST SECOND
IRRESPECTIVE OF THE FISCAL YEAR
JUST THREE CONSECUTIVE GENERAL
REPORTS.
A DOWNGRADE SO COUNTY OFFICE FOR
THE CD E. CHANGING THE
CERTIFICATION. FOR A FORTY TWO
ONE TWENTY SEVEN POINT SIX WHICH
IS THE LACK A GOING CONCERN.
SO THE REASON WE WERE JUST IN
OUR LAST WEEK WAS TO CONDUCT A
FISCAL HEALTH RISK AND HOUSES.
TRIGGERED BY THEIR DOWNGRADE ARE
THEIR DESIGNATION AS A LACK A
GOING CONCERN.
THE REASON WE'VE DONE A FISCAL
HEALTH RISK IN HOUSES IN THE
FALL IN SACRAMENTO CITY
CALAVERAS SWEETWATER WAS BECAUSE
THERE BUDGETS WERE DISAPPROVED.
IN IN WORKING WITH THE
DEPARTMENT OF FINANCE WE HAVE
EXERCISED SOME DISCRETION WHILE
THERE WERE SIX DISAPPROVED.
I ONLY OUTLINED THOSE THREE AND
I TOLD YOU WHY WE DIDN'T GO TO
THREE OTHERS WE ARE BEING VERY
THOUGHTFUL IN OUR ENGAGEMENT
WITH BOTH THE COUNTY AND
DISTRICT TO DO SOME INTELLIGENCE
GATHERING.
BEFORE WE DECIDE WHETHER WE'RE
GOING TO ENGAGE TO MAKE SURE
THAT WE'RE GOING TO ADD VALUE IN
THAT THE TOOL WE'RE GOING TO USE
THE FISCAL HEALTH RISK ANALYSIS
TOOL WHICH WE'VE HAD FOR YEARS.
IS GOING TO ADD VALUE AND HELP
BRING ABOUT.
A CHANGE FOR THEM -- OTHERWISE
IT'S PROBABLY A DIFFERENT TOOL
OR A DIFFERENT TYPE OF
ENGAGEMENT THAT MAY BE HELPFUL
TO THEM.
WHAT WHAT A WHAT ABOUT LOS
ANGELES AB ONE DAY THEY WERE?
THEY GOT A BAD REPORT FROM THEIR
OFFICE OF EDUCATION ALL IF I'D
AT FOR THE SELF CERTIFIED
QUALIFIED IN DECEMBER IN A SELF
CERTIFIED QUALIFIED LAST WEEK.
SO THEY AT THIS POINT HAVE THE
COUNTY YOU.
I'M.
RAISE SERIOUS CONCERNS ABOUT
ABOUT THEIR SETTLEMENT -- WITH
YOU TO WITH THE UNITED TEACHERS
LOS ANGELES.
SO REMEMBER -- WHEN YOU REACH A --
A TENTATIVE AGREEMENT WITH A
LABOR PARTNER -- YOU MUST FILE A
DISCLOSURE ABOUT THE COSTS OF
THAT LABOR AGREEMENT ON THE
TERMS AND THE COST OVER THE TERM
OF THE AGREEMENT WHETHER IT'S
ONE YEAR THREE YEARS FOUR YEARS --
THAT'S ACTUALLY TRUE FOR ANY
PUBLIC AGENCY NOT JUST SCHOOLS.
ARM AND IN THE CASE OF SCHOOLS
THE COUNTY OFFICE THEN -- IS
BECAUSE THE DISTRICT WAS QUALIFY
THE COUNTY OFFICES GIVEN TEN
DAYS TO REVIEW.
THAT SOME MIDDLE AND THEY MUST
RESPOND TO IT THEY DON'T GET TO
DISAPPROVE THEY CAN COMMENT ON
IT WHAT YOU'RE REFERRING TO
SENATOR WAS -- LA COUNTY OFFICES
A LETTER IN RESPONSE TO THAT --
SETTLEMENT THAT RAISED NUMBER OF
CONCERNS SO I THINK -- DIFFERENT
THAN.
A COUPLE OTHER DISTRICTS -- LA.
FISCAL ISSUE IS NOT -- TOMORROW.
IT'S NOT NEXT YEAR THERE FISCAL
ISSUE RIGHT NOW IS THE AT THE
END OF THE THIRD YEAR OUT
APPROACH IN THE FOURTH YOUR
ROUTE.
AND NOW WILL BECOME VERY
APPARENT WHEN THE DOCTOR BUDGET
IN JUNE.
BECAUSE WHAT IS TODAY THE FOURTH
YEAR THAT WE'RE NOT REPORTING ON
BECOMES THE THIRD YEAR THAT IS
PART OF THE ANALYSIS.
WHICH IS WHY THE COUNTIES LETTER
GAVE THEM PER CODE FORTY FIVE
DAYS TO MAKE BUDGET ADJUSTMENTS --
THAT FORTY FIVE DAYS PAST
THEY'VE NOT ADOPTED THOSE BUDGET
ADJUSTMENTS YET -- THEY DID
ADOPT A SECOND AN ARM LAST WEEK
I BELIEVE THEY WERE LATE DOING
SO -- BUT THEY DID ADOPT ONE IN
THE ADOPTED AS QUALIFIED.
SO IS THE IS THE PEDAL TO THE
METAL IN THE NEXT BUDGET GAS IS
ISSUED SO IF THEY SUBMIT A
BUDGET ON JULY ONE TO THE TO LA
COUNTY OFFICE OF BAD AND IT DOES
NOT ADDRESS WHAT I EXPECT WILL
BE A BILLION TO TWO BILLION
DOLLAR DEFICIT IN.
WHAT WILL BE YOUR THREE THEN THE
COUNTIES CHOICE AT THAT POINT
WOULD BE TO DISAPPROVE THEIR
BUDGET AND START DOWN THIS
COURSE?
OF EITHER BUDGET REVIEW
COMMITTEE OR WAVING THAT AND THE
TWO PARTIES COMING TOGETHER TO
WORK OUT A SOLUTION.
OF FISCAL HEALTH RISK ANNOUNCES
THE TOOL THAT WE USE ON THESE
AUTOMATIC TRIGGERS IT'S A TOOL
THAT.
HAS DEVELOPED IN USE FOR MANY
YEARS WE SPENT A LOT OF TIME
THIS PAST SUMMER -- UPDATING AND
IF YOU WILL KIND OF MODERNIZING
IT.
THE TWO HUNDRED AND FORTY
QUESTIONS ACROSS TWENTY HIGH
RISK AREAS OR NOT ALL HIGH RISK
BUT TWENTY RISK AREAS.
WE DO WAIT EACH QUESTION.
ARM BETWEEN HIGH RISK MARKET
RISK AND LOW RISK AND IT AND
ULTIMATELY -- SCORE THE DISTRICT
AT THE END OF THE DAY THE
QUESTIONS BY THE WAY OR YES OR
NO THEY'RE PRETTY
STRAIGHTFORWARD.
WE DON'T ALLOW MAYBE ANSWERS.
TRULY WE FORCE THE ISSUE IT'S
YES OR NO -- FOR IT MAY NOT BE
APPLICABLE BUT THAT WOULD BE FEW.
SO I'VE ALREADY RELEASED GONE
AHEAD OF MYSELF AND SPOKE TO THE
BOARD ON DISAPPROVE BUDGETS.
AT FIRST IN A REPORTING WE HAVE
FOUR NEGATIVES WE HAD ALREADY
PERFORMED FISCAL HEALTH RISK
ANALYSIS ON TWO SACKS CITY IN
SWEETWATER.
THE OTHER TWO WERE BEING MONITOR
ONE B. AND FEATHER FOR FALL SOME
OF OUR EXPLAIN THAT WE'RE NOT
ANTICIPATING -- ANY INTERVENTION
THERE.
AND THE THIRD IS SOUTHERN KERN --
WHICH THE COUNTY OFFICES HAS
ALREADY LOAN THEM CASH TO HELP.
THEM -- IN THEIR CASH FLOW --
AND WILL CONTINUE TO MONITOR
THEM.
AT FIRST IN ARE WE ALSO HAD --
SIX DISTRICTS THAT QUALIFIED
UNDER THIS TRIGGERS HAVING THREE
CONSECUTIVE.
QUALIFIED CERTIFICATIONS -- ONE
OF THEM I'M SORRY THE THREE
WHILE.
THERE WERE SIX THE QUALIFIED IN
DOING OUR HOMEWORK WERE VISITING
THREE OF THOSE IN FACT HAVE
VISITED TWO OF THE THREE ALREADY --
FIRST ONE'S COACHELLA VALLEY IN
RIVERSIDE COUNTY THAT IS COMING
UP THE FIRST OF MAY.
CLIMATE TRINITY IN HUMBOLDT --
WE WERE AT TWO WEEKS AGO
OCEANSIDE IN SAN DIEGO -- I
THINK WE ARE THERE ACTUALLY THIS
WEEK -- AND WE ARE MONITORING
THREE OTHERS GOAL TRAIL IN
ELDORADO IN CASCADE AND GATEWAY
IN BOTH IN SHASTA COUNTY.
AS I'VE ALREADY MENTIONED WE
WERE AT OUR LAST WEEK CONDUCTING
THIS WORK THERE THE LACK A GOING
CONCERN.
ALL THREE DISTRICTS THAT WERE
DOWNGRADED IT FIRST IN ARM --
MARCH. FOR FORTY A TAPE OF
MADERA IN MARIN OAKLAND IN
ALAMEDA AND RIVERSIDE IN
RIVERSIDE COUNTY -- WE ARE
MONITORING THOSE -- BOTH
LARKSPUR.
I'M SORRY -- LARKSPUR SUBMITTED
A A QUALIFIED BUDGET SECOND AN
ARM.
OUR INNER PORTED SECOND ARM BOTH
OAKLAND RIVERSIDE SUBMITTED
POSITIVES.
AT SECOND INTERIM -- AND SO THEY
WOULD THOSE POSITIVE
CERTIFICATIONS WOULD INDICATE
THAT THERE -- THEY'VE MADE THE
DECISIONS THAT THEY NEED TO MAKE --
I WOULD NOT AT THIS POINT NOT
QUESTION RIVERSIDE ON THAT BUT
OAKLAND -- I WOULD SAY THAT SO.
PROBABLY A LITTLE BIT OF A
STRETCH -- SECOND REPORTING THE
ONLY CHANGE TO THE LIST WOULD BE
ALLEN ROCK IN THE SANTA CLARA
COUNTY DISTRICT ARE VERY
FAMILIAR WITH WE'VE BEEN IN AND
OUT OF THERE -- MULTIPLE TIMES A
COUNTY HAS A TEAM IN PLACE --
WORKING WITH THE DISTRICT A
MONITORING THAT MAY END UP
NEEDING TO BE SCHEDULED FOR
FISCAL HEALTH FISCAL HEALTH RISK
ANALYSIS COMING UP.
THE COMMITTEES FAMILIAR WITH
ASSEMBLY BILL EIGHTEEN FORTY IT
WAS THE BUDGET -- TECHNICAL
CORRECTION THIRD A TECHNICAL --
CLEANUP BILL LAST AUGUST THAT
ALSO INCLUDED SOME POLICY ITEMS
THAT SHIFTED -- WHO ULTIMATELY --
TAKES THE LEAD ON A DISTRICT
THAT HOW IT NEEDS A STATE
EMERGENCY APPROPRIATION -- IT
WENT CERTAINLY HAS SOME
PROVISIONS GOING FORWARD BUT IT
ALSO FOR THE FOR DISTRICTS THAT
HAVE OUTSTANDING BALANCES --
THAT THE THE STATE FROM PRIOR ON
EMERGENCY PREPARATIONS IT TOOK
EFFECT IT IS ALSO EFFECTIVE FOR
THEM.
THOSE WOULD INCLUDING A WOOD --
VALLEJO CITY OAKLAND AND SELF
MONTEREY A JOINT UNION HIGH
SCHOOL DISTRICT ONLY ONE OF
THOSE IN THE WOULD -- WAS
CURRENTLY BEING ADMINISTERED BY
THE STATE THE OTHER THREE HAVE
GONE THROUGH THE RECOVERY
PROCESS.
AND WORK THEIR LOCAL GOVERNMENTS
HAVE BEEN WRITTEN AUTHORITY HAD
BEEN RETURNED TO THEM -- AND SO
IN ALL THESE CASES EIGHTEEN
FORTY PROVIDES THAT INSTEAD OF
THE STATE SUPERINTENDENT --
BEING THE LEAD ON THIS IT IS NOW
THE COUNTY SUPERINTENDENT.
ARM AND THE ADMINISTRATOR THE
TRUSTEE THAT'S A SIGN IS A SIGN
BY THE COUNTY SUPERINTENDENT
WITH THE CONCURRENCE OF THE
STATE SUPERINTENDENT OF THE
PRESIDENT THE STATE BOARD.
BUT THE DAY TO DAY -- OVERSIGHT
AND OPERATIONS OF THE DISTRICT
IN THOSE -- ARE ARE DEALT WITH
BY THE COUNTY SUPERINTENDENT AS
OPPOSED TO THE STATE
SUPERINTENDENT.
THERE WERE -- TWO OF THE FOUR
DISTRICTS WILL THING TO WITHIN
OAKLAND WHO HAVE BEEN -- BOTH
STRUGGLING -- FISCALLY WORK --
CALLED OUT WITH SPECIAL.
A NEW AD CODE PROVISIONS.
OF THOSE PROVISIONS REQUIRED A
FIRST REPORT BY US ON MARCH
FIRST UNDER THE CRITERIA OF
EIGHTEEN FORTY AND WE ISSUED
THOSE.
REPORTS -- IN INGLEWOOD PROGRESS
IS BEING MADE WITH LYCOS
DIRECTION I HAVE TO GIVE A LOT
OF CREDIT TO THE LOS ANGELES
COUNTY OFFICE OF ADD TO THAT
COUNTY SUPERINTENDENT -- SHE DID
NOT ASK PROBABLY WOULD HAVE BEEN
OPPOSED -- EIGHTEEN FORTY BUT
THE MINUTE IT WAS PASSED AND
SIGNED BY GOVERNOR BROWN SHE
EMBRACE THE NEW ROLE SHE HAD AND
I IN MY OPINION SHE ASSEMBLED A
TEAM HAS DONE AN OUTSTANDING JOB --
HELPING INGLEWOOD -- I THINK --
IT WAS MADE MORE PROGRESS IN THE
LAST SIX MONTHS UNDER EIGHTEEN
FORTY THAN THEY HAD MADE IN THE
PRIOR SIX YEARS -- AND SO I I I
SEE PROGRESS THERE I THINK WE
ALL THAT VISIT ON A REGULAR
BASIS SEE PROGRESS AND AND
THAT'S THAT'S GOOD NEWS. ONE OF
THE REQUIREMENTS OF OUR WORK
THAT WAS DUE ON MARCH -- ONE TO
HELP -- INFORMED THE MAY REVISED
BUDGET IS TO IDENTIFY WHAT THE
DISTRICTS DEFICIT PROJECTED
DEFICIT WOULD BE FOR NEXT YEAR --
IN OUR PROJECTION FOR INGLEWOOD
IS A ONE POINT THREE MILLION
DOLLAR UNDER -- EIGHTEEN FORTY
IT DOES REQUIRE ACTION IN THE IN
THE NEW NEW BUDGET -- BUT THE
EIGHTEEN FORTY PROVIDES THAT THE
STATE WOULD -- POTENTIALLY
APPROPRIATE 75% OF THAT ONE
POINT THREE MILLION AS
ADDITIONAL AID FOR THE DISTRICT
BASED ON THAT PROJECTION.
OAKLAND SLIGHTLY DIFFERENT STORY
UNDERSTAND THAT THE
CIRCUMSTANCES SINGLE IN OAKLAND
FOR THE LAST YEAR BEEN KINDA
LUMPED TOGETHER BUT THAT.
THEY'RE VERY DIFFERENT ANGLE
WHAT IS BEING OPERATED.
UP TO LAST OCTOBER BY THE STATE
SUPERINTENDENT NOW BY THE COUNTY
SUPERINTENDENT -- THEY DON'T
HAVE LOCAL GOVERNMENTS AUTHORITY --
IT IS ACE IF YOU WILL STILL WHAT
WE CALL SATE ADMINISTRATOR
RUNNING THE DISTRICT MAKING THE
DAY TO DAY DECISIONS NOW IN
CONCERT WITH THE COUNTY
SUPERINTENDENT.
OAKLAND.
GOT ITS EMERGENCY PREPARATION
TWO THOUSAND THREE WENT THROUGH
A PERIOD OF RECOVERY AND
ULTIMATELY WAS CERTIFIED IS
RECOVERED IN TWO THOUSAND NINE
LOCAL CONTROL WAS AND RETURNED.
BY THE ADMINISTRATION BACK TO
THE DISTRICT THE BOARD TO GET
SEATS AGAIN HIGHER TO
SUPERINTENDENT AND FOR THE LAST
DECADE THEN THEY'VE BEEN
OPERATING -- WITH A STATE
TRUSTEE LOOKING OVER THEIR
SHOULDER BUT THEY'VE BEEN
OPERATING AS A VERY TYPICAL
DISTRICT.
THEY A DATA FIGHT THEMSELVES
SOME PRETTY SIGNIFICANT FISCAL
DISTRESS I'M JUST OVER A YEAR
AGO AND WE'VE BEEN INVOLVED WITH
THEM IT LITERALLY ALMOST DAILY
SINCE THAT POINT IN TIME -- IN
SEVERAL DIFFERENT ROLES -- BUT
CERTAINLY UNDER THE ROLE OF
EIGHTEEN FORTY OUR MARCH ONE
LETTERS -- DENTAL VICE THAT
PROGRESS IN THE DISTRICT IS
INCONSISTENT GOVERNANCE IN
LEADERSHIP HAVE.
DEFICIENCIES I WOULD SAY
SIGNIFICANT DEFICIENCIES IN THE
LAST TWO WEEKS HEIR CFO CHIEF
FINANCIAL OFFICER WALKED OUT.
AND THERE'S CHIEF BUSINESS
OFFICIAL GAVE NOTICE LAST WEEK
TO LEAVE NEXT WEEK -- AND SO I I
WOULD ADD -- OBVIOUSLY A A LEVEL
OF CONCERN -- GIVEN THOSE TWO
VERY IMPORTANT FOLKS -- NOW --
STEPPING AWAY FROM THE DISTRICT
MY MIKE ME WHAT WHAT HAPPENED
BETWEEN TWO THOUSAND AND NINE
AND TWO THOUSAND AND EIGHTEEN
AND WHAT THE PROJECTED -- OF
SIZE OF THE DEFICIT.
TO NOW SO THE PROJECTED SIZE THE
DEFICITS THE EASY ANSWER HARM ON
MARCH WHEN WE ESTIMATE OUT AT
SEVEN POINT SIX MILLION HOWEVER
THAT DOES NOT INCLUDE THE RECENT
SETTLEMENT WITH THEIR TEACHERS.
YOU'LL RECALL THAT THEY SIGN
THAT TENTATIVE AGREEMENT ON
MARCH ONE LITERALLY AN HOUR
BEFORE WE ISSUED A REPORT.
THEY ALSO HAVE ADOPTED SOME
BUDGET CUTS ROUGHLY TWENTY ONE
MILLION IN BUDGET CUTS SINCE
THAT DATE -- LITERALLY JUST
YESTERDAY THEY SUBMITTED.
THE COST OF THEIR SETTLEMENT I
THINK WE'RE IT WEEK THREE IT'S
TAKEN HIM THAT LONG TO FIGURE
OUT WHAT THEY HAD HAVE AGREED.
TO IT'S NOT TRADITIONAL YOU
GENERALLY KNOW WHAT IT COSTS
BEFORE YOU AGREE TO IT -- SO THE
EASY ANSWERS SEVEN POINT SIX
HOWEVER WE WILL NEED TO DO THE
ANALYSIS ON THE DATA THAT WAS
SUBMITTED YESTERDAY.
AND THE BUDGET CUTS AND WE WILL
BE UPDATING WITH DEPARTMENT
FINANCES CONSENT WILL BE
UPDATING OUR MARCH FIRST REPORT
HERE IN THE COMING WEEKS.
THE BIGGER QUESTION SIR IS WHAT
HAPPENED OVER THAT TEN YEAR
PERIOD -- I THINK VERY CANDIDLY
ON THE EVIDENCE SHOWS THAT THEY
SLIPPED RIGHT BACK TO WHERE THEY
WERE IN -- TWO THOUSAND THREE IN
ALL CASES SO IN THIRTY YEARS OF
AB -- TWELVE HUNDRED AND THEN
THE AUDIENCE IS PAUL WORN WITH
THE PUBLIC POLICY INSTITUTE OF
CALIFORNIA WHO WAS A STAFFER ON
AB TWELVE HUNDRED THIRTY YEARS
AGO -- BUT SORRY PAUL -- AND SO --
THE IN THOSE THIRTY YEARS WE'VE
HAD NINE SCHOOL DISTRICTS AND
ONE COMMUNITY COLLEGE KIND OF GO
OFF THE END.
SO I WOULD SAY OF ELEVEN HUNDRED
DISTRICTS EACH YEAR GOING
THROUGH THIS PROCESS THE SYSTEM
ACTUALLY WORKS AND IT WORKS WELL.
WE HAVE VERY FEW NEGATIVES AND
WHEN WE DO WE GET THEM TURNED
AROUND AND BACK WHERE THEY NEED
TO BE -- IN OAKLAND'S CASE THEY
HAD A TRUSTEE IN PLACE DURING
THAT PERIOD OF TIME SERVING --
TO ENSURE THE STATE'S INTERESTS
WERE BEING MET AND THAT IS THAT
THE ANNUAL REPAYMENT OF THE LOAN
WAS BEING MAY -- BUT IT'S CLEAR
THE DISTRICT MISLED THAT TRUSTEE --
AND THAT THEIR DATA WAS NOT
ACCURATE -- AND THEY IN THAT
PROCESS HAVE SLID BACK OVER TIME.
AND SO I I WILL TELL YOU IN ALL
TEN CASES.
AND IN ALL CASES GENERALLY OF
FISCAL DISTRESS THIS IS A
GOVERNMENT SENT A LEADERSHIP
ISSUE.
IT MANIFESTS ITSELF IN A FISCAL
PROBLEM USUALLY A DECADE OR MORE
LATER IN IN WHICH CASE IT GOES
BACK ALMOST FIFTEEN YEARS A
GOVERNANCE IN A LEADERSHIP ISSUE
THAT TOOK.
ALMOST FIFTEEN YEARS OF
ACCUMULATED ISSUES.
ON THAT AND ALSO WE MANIFEST
ITSELF -- SIX YEARS AGO SEVEN
QUICK QUESTION.
SO THE TRUSTEE WHO YOU SAID YOU
FEEL LIKE WAS PROBABLY MISLED BY
THE SCHOOL DISTRICT.
HOW DO WE PICK OUR TRUSTEES AND
WOULD IT BE POSSIBLE TO PICK
SOMEONE WHO COULD TELL IF THEY
WERE BEING MISLED?
SO PRIOR TO EIGHTEEN FORTY THE
TRUSTEE.
WAS APPOINTED BY THE STATE
SUPERINTENDENT SUBSEQUENT
EIGHTEEN FORTY THE TRUSTEES
APPOINTED BY THE COUNTY
SUPERINTENDENT WITH THE
CONCURRENT TO THE STATE
SUPERINTENDENT AND THE PRESIDENT
THE STATE BOARD.
AN ADDITIONAL PROVISION EIGHTEEN
FORTY IS AT THAT APPOINTMENT IS
MADE FROM A LIST THAT FIXED MATT.
A DEN OF VICE AND VETS.
THAT WOULD BE THE REAL NEW --
PIECES THAT YOU DON'T JUST.
THINK ANYBODY AND FRANKLY THESTATE'S A PREVIOUS STATE
SUPERINTENDENT NEVER PICKED
ANYBODY THIS WAS A TRUSTEE THAT
WAS VERY QUALIFIED TO BE A
TRUSTEE.
INTERESTING BUT STILL MAYBE GOT
A LITTLE MISLED.
I THINK THE I THINK THE DISTRICT
FRANKLY -- IN PART WAS MISLED
ITSELF -- OKAY PROBABLY BY SOME
STAFF GOT IT THANK YOU BEFORE I
TURN TO MY COLLEAGUES BY THE WAY --
I'VE ASK OF CENTER GLAZER IN
CENTER ALLEN TO JOIN US TODAY
BECAUSE THEIR INTEREST IN THESE
ISSUES.
IT ARE THERE NOT AUDITS THAT.
DISTRICTS.
GO THROUGH THAT.
INDEPENDENT AUDITS THAT SHOULD
PICK UP SOME OF THESE PIECES OF
INFORMATION SO APPS ABSOLUTELY
CENTER ROTH -- THERE'S AN ANNUAL
AUDIT REQUIRED -- INDEPENDENT
AUDIT REQUIRED -- IN ADDITION WE
HAVE TWELVE HUNDRED WHICH
REQUIRES A COUNTY SUPERINTENDENT
REVIEW THE BUDGET THE IN A
REPORT REVIEW THE AUDIT AS WELL --
REVIEW THE ON AUDITED AXLES
THEIR SUBMITTED EACH SEPTEMBER
ON THE PRIOR YEAR SO THERE'S A
NUMBER OF CHECKS AND BALANCES --
I THINK THIS IS ONE OF OUR FEW
CASES WHERE WE DIDN'T SEE THE
TOLL SYSTEM WORK AS DESIGNED --
VERY CANDIDLY -- WE ACTUALLY IN
SOME WORK WE DID IN OAKLAND LAST
SPRING CHALLENGE THE PREVIOUS
AUDITOR'S AND SAID YOU SHOULD
HAVE REPORTED ON THESE THINGS --
HINDSIGHT'S ALWAYS TWENTY TWENTY
LET'S BE HONEST -- BUT WE
ACTUALLY TOOK THE PREVIOUS
AUDITOR'S TO TASK A VERY
REPUTABLE FIRM BY THE WAY.
THE DOES A LOT OF SCHOOL
BUSINESS WORK AND SO WOULD NOT --
EVER -- GENERALLY DOUBT THEIR
ABILITY BUT I I DON'T WE DIDN'T
FEEL THEY HAD ASKED ALL THE
RIGHT QUESTIONS OR IN ASKING THE
RIGHT QUESTIONS HAD REALLY
EVALUATED THE ANSWERS THE
DISTRICT GAVE IN RESPONSE THAT'S
PROBABLY A BETTER.
WAY OF DESCRIBING IT DID THEY
TAKE THAT DEEPER DIVE AFTER
RECEIVING THE RESPONSES I DO
THINK THEY ASK QUESTIONS THE
DISTRICT RESPONDED.
HIS ANSWERS WERE ACCEPTED
[inaudible]
UNFORTUNATE.
GENERAL AT IN AS CHAIRMAN THANK
YOU AND THE COMMITTEE FOR
ALLOWING ME TO PARTICIPATE IN
THIS IMPORTANT HEARING.
I WONDERED IF YOU COULD GIVE A
LITTLE BIT MORE EXPLANATION OF
HOW THEY WERE MISLED AND WHETHER
OR NOT THESE THAT THESE ACTIONS
ROSE TO ANY KIND OF CRIMINAL --
POTENTIAL CRIMINAL -- ACTIVITY
THAT THAT SHOULD BE PROSECUTED.
SO SENATOR ARE ARE WILL LET ME
ANSWERS ANSWER THE SECOND
QUESTION FIRST -- THE WORK WE
HAVE DONE THERE HAS NOT BEEN A
WHAT WE COMMONLY FOR TWO IS AN
EXTRAORDINARY AUDIT WHICH WE
LOOK AT FRAUD MISAPPROPRIATION
OF PUBLIC FUNDS.
OR OTHER ILLEGAL ACTIVITIES --
OUR REPORT ACTUALLY IDENTIFIED A
NUMBER OF CONCERNS -- BUT IT IS
ULTIMATELY UP TO THE COUNTY
SUPERINTENDENT TO CALL FOR THAT
REVIEW BASED ON A SET OF
ALLEGATIONS -- BEFORE WE WOULD
DO THAT TYPE OF WORK -- AND SO
AND EVEN WHEN WE DO THAT WORK WE
WOULDN'T MAKE THAT ULTIMATE
DETERMINATION WE WOULD IDENTIFY.
EVIDENCE THAT WOULD THEN WE
WOULD TURN OVER TO LAW
ENFORCEMENT FOR THEM TO ACT UPON --
THERE WERE.
A NUMBER OF PRACTICES IN PLACE
THAT WE THINK WERE MISLEADING.
THAT BEST WHERE THERE WAS --
EXTENSIVE INTER FUND BORROWING
THAT WAS NOT RECORDED IS
BORROWING.
SO MONEY TAKEN FROM ARE NOT
TAKEN STOP APPROPRIATE TERM
MONEY TRANSFERRED FROM.
SELF INSURED FUNDS TO THE
GENERAL FUND TO HELP BOOST UP
THE GENERAL FUND STATUS -- FROM --
A A HEALTH.
THIS CALL HEALTH STANDPOINT.
AND THOSE LOANS IF YOU WILL I'M
USING THE WORD LONG.
YOU KNOW FAIRLY BROADLY HERE ON
THAT TRANSFER LONG WAS THAT
TRANSFER WAS NOT RECORDED AS A
LOAN TO THE GENERAL FUND.
WHICH ONE DID THEN HAVE SHOWN UP
ON A NUMBER OF FINANCIAL REPORTS
IS THE GENERAL FUND HAVING DEBT.
YEAH HE'S PRETTY SIMPLE.
ACCOUNTING SO BUT BUT WHAT WHAT
FOR WHAT PURPOSE TO THOSE THOSE --
THOSE ACTIONS TAKEN TO MANAGE
YOUR MUST A MORE ROBUST BALLOT
SHE WHICH MEANS THEY DIDN'T HAVE
TO MAKE OTHER.
MORE DIFFICULT YOU KNOW
FINANCIAL DECISIONS RIGHT.
A MORE ROBUST FUND BALANCE NOT
BALLOT SHE BUT FUND BALANCE FOR
THE GENERAL FUND.
THESE ARE FISCAL OFFICERS OF THE
DISTRICT.
WELL AND WHAT MOTIVATION WHEN
THEY HAVE TO DO SUCH A THING --
SIMPLY TO HAVE THE DISTRICTS
FISCAL HEALTH WORK BETTER THAN
IT WAS.
THIRD THERE IS ACTUALLY NO
ALLEGATION OR EVIDENCE OF ANY
PERSONAL GAIN.
IN IN ANYTHING WORK THAT WE'VE
DONE IN THE DISTRICT COURT ANY.
CONVERSATION WE HAVE ALMOST A
WEEKLY IN FACT WE'RE PART OF A
WEEKLY CONVERSATION IN THE
DISTRICT.
NEVER HAS THERE BEEN AN
ALLEGATION OF ANY QUE.
ARE THOSE EMPLOYEES STILL
EMPLOYED BY THE DISTRICT THE
MAIN ONE IS NOT NOW.
THEY WERE -- CONTRACT WAS BOUGHT
OUT ROUGHLY A YEAR AGO BUT HE ME
YOU MEAN THE INDIVIDUAL CONTRACT
OR A CONTRACT OR NO THE AND IN
AN EMPLOYEE.
THIS EMPLOYEE HAD A CON AN
EMPLOYMENT CONTRACT.
AND WHY WOULD EMPLOYEE OF THE
DISTRICT HAVE EMPLOYMENT
CONTROVERSY SENIOR EXECUTIVE
STAFF HAVE EMPLOYMENT CONTRACTS
THREE YEAR SUPERINTENDENT FAIRLY
TYPICAL TO HAVE A THREE YEAR
CONTRACT AS AN EXAMPLE.
THE MOST OF THESE ACTIONS WITHIN
THE ACCOUNTING FUNCTION HAVE A
CHECK AND BALANCE TO THEM RIGHT.
SO THAT NO ONE PERSON EVER CAN
MAKE A DECISION WITHOUT SOMEBODY
ELSE HAVING ADDITIONAL OVERSIGHT.
SO WHEN YOU MENTIONED THAT
THERE'S MORE THAN ONE PERSON
INVOLVED THAT MEANS THAT AT
LEAST ONE PERSON INVOLVED IN
THIS FRAUD.
I STILL EMPLOYED BY THE DISTRICT.
SO I WANT TO BE CAREFUL ABOUT
THE TERM FRAUD I THINK IF WE
WERE TO LOOK AT THE PENAL CODE
IT'S THAT THERE'S SOME PERSONAL
GAIN AND AGAIN THERE'S BEEN NO
ALLEGATIONS OF THAT.
IS THERE A SIZEABLE BUSINESS
OFFICE TEAM IN THE DISTRICT AND
HAS BEEN YES -- THERE STILL IS --
A SIZEABLE STAFF THERE I'M DOING
A TO THEIR INDIVIDUAL FUNCTIONS.
THE EXAMPLE OF THE INTER FUND
TRANSFERS I WOULD SAY WAS DONE
AND VERY VERY HIGH LEVEL DIDN'T
INVOLVE A WHOLE LOT OF OTHER
PEOPLE.
I THANK YOU.
LET ME ASK A QUESTION ON THE
AUDIT IS THE IS THE AUDIT
CONTRACT CHANGED.
I DON'T I DON'T KNOW THAT --
BECAUSE THE AUDIT THE
INDEPENDENT AUDITOR WOULD
REPRESENT THE REPORT NOT TO THE
SUPERINTENDENT OR TO TO SENIOR
MANAGEMENT TEAM TO THE LORD.
SO THE FAILURE OF THE AUDIT TEAM.
TO PROPERLY IDENTIFY WHETHER IT
WAS INTENTIONAL OR OTHERWISE.
THESE -- DISCREPANCIES --
POTENTIALLY PRECLUDED THE BOARD
FROM HAVING THE INFORMATION.
YES SIR OR THE TRUSTEE IN THIS
CASE THE INFORMATION NECESSARY
TO TAKE APPROPRIATE ACTION
BECAUSE YES SIR AND IT GOES
DEEPER THAN THE AUTO WOULD BE
THE BUDGET.
THE ON OUTDATED AXLES THE IN
ARMOR PORTS ALL OF THE
COMPONENTS THAT WERE FAMILIAR
WITH UNDER THIS BIG UMBRELLA
THAT WE CALL AB TWELVE HUNDRED
THAT INVOLVES OVERSIGHT.
OF BOOK BEFORE WE FINISH WITH
THIS SEGMENT AND I I DON'T WANT
TO PUT YOU ON THE SPOT I I WOULD
BE INTERESTED TO KNOW.
OF WHAT WE NEED TO DO IS A
LEGISLATURE.
TO A FURTHER EMPOWER AND
STRENGTHEN THIS PROCESS TO TRY
TO PREVENT -- SITUATIONS LIKE WE
ARE NOW HEARING ABOUT -- IN
OAKLAND SO YOU DON'T NEED TO
COVER IT NOW BUT OKAY SOME POINT.
WELL WALL DRESS IT NOW I'M I
THINK ACTUALLY EIGHTEEN FORTY
GOES A LONG WAYS -- IT BRINGS
THAT OVERSIGHT DOWN LOCAL -- AS
A YOU KNOW OPENS NOT FAR FROM
SACRAMENTO BUT IN THE WOOD IS
FAR FROM SACRAMENTO -- AND FROM
A DAILY OPERATIONS STANDPOINT IT
BRINGS IT LOCAL -- THE SO
EIGHTEEN FORTY ADDRESSES A
NUMBER THE PIECES WE ALSO HAVE A
DIFFERENT TRUSTEE IN OAKLAND
RIGHT NOW WHO IS FUNCTIONING AS
IN THE TRUSTEES INTENDED TO
FUNCTION.
AND IS GETTING INTO THE NITTY
GRITTY AS HAT HAS A MULTIPLE
TIMES A DAY CONVERSATION WITH
THE DISTRICT.
ARE REQUIRES THAT THEY SEE WHAT
GOES TO THE BOARD I HAD A TIME
SO THEY CAN QUESTION IT THEY
REVIEW IT THEY'VE BEEN VERY
THOROUGH ABOUT THAT.
THEY PARTICIPATE IN OUR WEEKLY
OR EVERY OTHER WEEK CONVERSE --
PHONE CONFERENCES WITH THE
DISTRICT CAN -- OFTEN TIMES --
CD E. AND THE DEPARTMENT OF
FINANCE -- SO THERE'S A LOT OF
ICE ON THIS I THINK THERE WAS A
LOT LEARNED IN THE ROLE OF A
STATE TRUSTEE EIGHTEEN FORTIES I
INDICATED.
ADDRESS AS PART OF THE OUT THERE
NOW SIGNED BY THE COUNTY
SUPERINTENDENT.
SUBJECT TO A LIST THAT WE PUT
THAT WE WOULD IDENTIFY AND THAT --
I THINK THOSE ARE ALL ELEMENTS
THAT STRENGTH IN THE PROCESS AND
I'M SURE AUDITORS LEARNED A LOT.
THOSE THAT DO SCHOOL DISTRICT
AUDITS I SUSPECT THEY HAVE
SPECIAL BASED ON A CRITICISM YES.
THANK YOU SIR YOU'RE WELCOME.
I'M GONNA MOVE TO THE NEXT
SECTION -- SCHOOL DISTRICT
FISCAL EMERGENCIES OBVIOUSLY
INGLEWOOD CONTINUES A SEVENTH
COMPREHENSIVE REVIEW IS ACTUALLY
UNDER WAY SO FOR THE COMMITTEE'S
BENEFIT WHEN A DISTRICT TAKES AN
EMERGENCY APPROPRIATION FROM THE
STATE.
LOSES ITS LOCAL GOVERNMENTS ONE
OF THE TASKS ASSIGNED TO US IS
THE U. S. ANNUAL COMPREHENSIVE
REVIEW AND IN THAT COMPREHENSIVE
REVIEW WE LOOK AT FIVE AREAS
OUTLINED IN CODE.
ON THOSE AREAS ARE OBVIOUSLY
FISCAL [inaudible]
FACILITIES PERSONNEL.
STUDENT ACHIEVEMENT.
AND GOVERNMENT SLASH COMMUNITY
RELATIONS.
AND WE ISSUE A VERY LARGE REPORT --
EACH SUMMER ON THE PROGRESS THE
DISTRICTS MAKING THERE IS A
SCORING RUBRIC THAT GOES WITH
THE REPORT -- THE DISTRICT IS
SLOWLY MAKING PROGRESS IT'S
ACTUALLY MADE FAIRLY SIGNIFICANT
PROGRESS IN THE AREA OF
PERSONNEL MANAGEMENT IN THE AREA
OF GOVERNANCE.
BOMB IT HAS MADE MINIMAL
PROGRESS ON TO DATE AS I ALLUDED
TO EARLIER IN THE AREA.
OF FINANCES AND FACILITIES --
AND STUDENT ACHIEVEMENT IN THE
AREA FACILITIES THOUGH IN THE
LAST SIX MONTHS SINCE OF LOS
ANGELES COUNTY OFFICE VIçT --
HAS BEEN -- INVOLVED DAILY THEY
HAVE ACTUALLY PRODUCED A DRAFT.
OF FACILITIES CONSOLIDATION
REPORT THIS IS A DISTRICT THAT
ONCE SERVED OVER NINETEEN
THOUSAND KIDS NOW SERVING LESS
THAN EIGHT THOUSAND SO THEY HAVE
ACCESS FACILITIES.
AND THEY HAVE -- I REVIEWED IN A
MEETING AND INGLEWOOD LAST WEEK
THE MOST RECENT DRAFT ON THAT
THEY'VE COME UP WITH IS VERY
THOUGHTFUL -- ADDRESSES --
REALLY THE NEED AND THE SUPPORT
THE DISTRICT NEEDS MOVING
FORWARD BY WAY OF FACILITIES --
SWEETWATER UNION -- I THINK
GENERALLY I WOULD SAY A IN THE
LAST SIX WEEKS WERE STARTING TO
TURN THE CORNER AND SEEING
PROGRESS IN SWEETWATER -- THIS
WAS NOT ON TO ORDERS NOT ON OUR
RADAR SCREEN -- UP TOLD THE LAST
WEEK OF AUGUST WHEN THEY CLOSE
THEIR BOOKS FOR THE PRIOR FISCAL
YEAR -- IS BANNED RAN THEIR
TRIAL BALANCE IS WHEN THEY SAW
THAT THERE ESTIMATED POSITIVE.
FIFTY MILLION DOLLAR FUND
BALANCE WAS ACTUALLY A NEGATIVE
FIFTEEN MILLION DOLLAR FUND-BALANCE TO A THIRTY MILLION
DOLLAR SWING -- CHIEF BUSINESS
OFFICIAL DIRECTOR FISCAL PAYROLL
MANAGER ALL RETIRING.
AT THE SAME TIME THEY HAD
ALREADY RECRUITED THEIR NEW
CHIEF BUSINESS OFFICIAL.
BOMB WHO'D STARTED THAT WEEK IN
WAS THE ONE THAT DISCOVERED THE
DISCREPANCY.
DISTRICT IS GOT WENT INTO CRISIS
MODE -- I WOULD SAY THROUGH
JANUARY WE HAVE STRUGGLED TO
REALLY GET THEM TO UNDERSTAND
THE MAGNITUDE OF THEIR PROBLEM.
NOT ONLY DO THEY HAVE NOW A
NEGATIVE FUND BALANCE BUT THEY
ALSO CARRIED OVER THERE BUDGET
FROM LAST YEAR.
WHICH IS WHAT CREATED THE
NEGATIVE FUND BALANCE SO IT HAD
OVERSTATED EIGHTY A IN IT.
HAD UNDERSTATED SALARIES AND
BENEFITS IN IT.
AND SO TO THE TUNE OF THIRTY
PLUS MILLION ON TOP OF A FIFTY
MILLION DOLLAR NEGATIVE FUND
BALANCE -- ALL THIS TO COME TO
LIGHT AT THE LAST YOU KNOW AS
YOU'RE CLOSING YOUR BOOKS
BASICALLY -- IS VERY UNUSUAL --
WE SHOULD REPORT IN DECEMBER OF
FISCAL HEALTH RISK ANALYSIS
IDENTIFIED A A NUMBER OF
CONCERNS IN THE DISTRICT --
GETTING THEIR ATTENTION THE
BOARD'S ATTENTION IN THIS SENIOR
MINISTRATIONS ATTENTION
UNDERSTAND THE MAGNET THE
PROBLEM IS IS BEEN -- HAS BEEN A
CHALLENGE BUT I'D SAY THEY DID
SO ABOUT SIX WEEKS AGO.
AND THEY ALMOST IMMEDIATELY AS
THEY BEGIN TO ADDRESS IT -- HAVE
MADE PROGRESS.
AND I EXPECT THINGS THEY ARE ON
TRACK -- WE ARE -- AND ALL SPEAK
TO THIS IN JUST A SECOND WE ARE
IN THE DISTRICT RIGHT NOW --
FOLLOWING UP ON ALLEGATIONS OF
ILLEGAL FISCAL PRACTICES AND SO
WE ARE CONDUCTING GETTING READY
TO JUST START AN EXTRAORDINARY
AUDIT -- IN THAT DISTRICT ALL
SPEAK TO THAT A MOMENT.
SACRAMENTO CITY -- YOU READ A
LOT ABOUT -- IN THE SACKB. MOST
OF THAT HAS BEEN FAIRLY ACCURATE
REPORTING -- WE DID A FISCAL
HEALTH RISK ANALYSIS THERE IN
THE FALL REPORTED IN DECEMBER --
I HAVE STATE ACTIVELY INVOLVED
OUR STAFF HAS -- WITH THE
DISTRICT WITHOUT REALLY HAVING
AN OFFICIAL ROLE IN THE COUNTY
OFFICE SINCE THAT POINT IN TIME.
OF THE DISTRICT -- HAS BEEN --
LET'S SEE UP THROUGH DECEMBER
HAD FORECASTED TO RUN OUT OF
CASH NOVEMBER OF NINETEEN WE
UPDATED OUT RECENTLY IN THE LAST
COUPLE WEEKS WERE NOW EXPECTING
THAT TO BE APRIL OF TWENTY
PROBABLY HAVE TWO MONTHS OF
NEGATIVE CASH JUNE OF TWENTY UP
POSITIVE MONTH.
BUT ALL OF FISCAL YEAR TWENTY
TWENTY ONE IS CURRENTLY FORECAST
TO HAVE NEGATIVE CASH.
AND SO -- IF YOU WILL THE THE
CRITICAL TIMEPIECES MOVED OUT
THEY HAVE AN ACT THEY HAVE VOTED
ON AND APPROVED -- SEVERAL CUTS
BUT COMPLETELY INSUFFICIENT TO
ULTIMATELY TURNED THE CORNER BUT
IT'S THE RESULT OF THOSE INITIAL
CUTS THAT MOVES.
THE NEGATIVE CASH BALANCE OUT A
FEW MONTHS JUST FINE WE'VE
COVERED OVER AND WE TALKED ABOUT
LA SO WITH RESPECT TO SAID
SACRAMENTO.
WHAT'S THE PROBLEM.
HAVE IF YOU OR YOUR AGENCY BEEN
ABLE TO IDENTIFY THE BEEN
SEVERAL ARTICLES IN THE
NEWSPAPER INCLUDING A OP ED
TODAY THAT.
TALK ABOUT -- BENEFITS OR
SALARIES OR VARIOUS THINGS. TO
BE FAIRLY SIMPLE ABOUT IT NUMBER
ONE THERE'S THERE'S A LONG
HISTORY IN THE DISTRICT --
PROBABLY OF INACTION -- WITHIN
DEALING WITH SOME OF THESE ITEMS
BUT REALLY THE THE CURRENT ISSUE
IS DRIVEN BY -- THE DISTRICT
ENTERING INTO A COLLECTIVE
BARGAINING AGREEMENT WITH ITS --
TEACHER PARTNERS IN NOVEMBER OF
SEVENTEEN WE ARE -- NOT IN A
POSITION IN ANY WAY TO CRITICIZE
THAT AGREEMENT WE GENERALLY
WOULD SAY AND WE'D SAY THE SAME
THING ABOUT OAKLAND'S WOULD SAY
THE SAME THING ABOUT L. A.'S.
IF THAT'S WHAT THE RIGHT THE
TERMS OF THAT AGREEMENT WERE THE
RIGHT THINGS FOR THE DISTRICT
AND IT'S IN THIS CASE TEACHERS.
WHO LET'S BE HONEST DO MOST OF
THE WORK IN A SCHOOL DISTRICT TO
ALMOST ALL THE WORK IN A SCHOOL
DISTRICT?
THEN THAT'S THE RIGHT THING --
BUT WHEN YOU AGREE TO THOSE
TERMS AND AS A BOARD APPROVED
THOSE KNOWING YOU CAN'T AFFORD
ON THEN THE SUBJECT YOU HAVE
SUBSEQUENT ACTIONS THAT YOU NEED
TO TAKE.
BOARD MEMBERS A FIDUCIARY IS FOR
THEIR DISTRICT THAT'S THE ROLE
AS TRUSTEES.
AND IN THIS DISTRICTS CASE THEY
APPROVE THE AGREEMENT KNOWING
THEY COULDN'T AFFORD IT.
AND THAT IS NOW ROUGHLY A YEAR
AND A HALF LATER AND THEY'RE
JUST NOW STARTING. TO MAKE THE
NECESSARY CUTS ASSOCIATE TO THAT
WHAT'S THE DELTA.
THE DELTA A NATIONALLY IS IN THE
THAT A FAIR QUESTION YES IT IS
AND I SHOULD KNOW THE ANSWER.
ALTHOUGH IT I THINK HAS CHANGED
RECENTLY MICHELLE THE RECALL THE
FIRST YEAR.
IT MOVES UP INTO THE SIXTY
MILLION RANGE OVER THREE YEARS.
YOU REMEMBER THE FIRST YEAR.
YEAH IT'S PRETTY HIGH HIGH
THIRTIES LOW FORTIES IN THE
FIRST YEAR AND THEN ESCALATES UP.
TO SIXTY IN THE THIRD YEAR SO
THE CONCEPT IS IF YOU APPROVE AN
AGREEMENT LIKE THAT THEN YOU
NEED TO MAKE THIRTY TO SIXTY
MILLION DOLLARS WORTH OF CUTS
ELSEWHERE YES AND THOSE HAVEN'T
BEEN MAY THOSE HAVEN'T BEEN MADE.
ONLY A SMALL PORTION JUST IN THE
LAST FEW WEEKS HAVE BEEN MADE --
LET ME THE END YOU KNOW FROM --
MEDIA REPORTING THERE'S A TALK
OF A STRIKE AND SO ON THIS YOU
SHOULD NOT VIEW A STRIKE IN
SACRAMENTO CITY.
UNIFIED AS THE SAME ISSUES AS LA
OR OAKLAND VERY DIFFERENT RIGHT
STRIKE IN SACRAMENTO CITY IS
OVER THAT VERY RECENT COLLECTIVE
BUT RECENT AGREEMENT.
AND THE US SO SHE ASIANS CLAIM
THAT THE DISTRICT -- IS NOT
MEETING ITS AGREEMENT.
RIGHT THAT'S A VERY DIFFERENT
THEN.
WE CAN'T COME TO TERMS AND WE
WORK THROUGH THE IMPASSE PROCESS
WE WORK THROUGH THE FACT FINDING
PROCESS.
MEDIATION ALL THOSE THINGS WE'VE
GONE THROUGH ALL THE STEPS IN
TECHNICALLY SEXY DOESN'T.
THE ASSOCIATION DOESN'T HAVE TO
GO THROUGH ALL THOSE STEPS THEY
WOULD JUST SIMPLY CLAIM THAT THE
CONTRACT IS NOT BEEN HONORED.
THE OKAY I I TOTALLY GET WHAT
YOU'RE SAYING ABOUT THE THE
TERMS OF THE DISAGREEMENT BUT
ONE THING THAT SEEMS TO BE VERY --
SIMILAR IN BOTH CASES
[inaudible]
IS.
D. AT THE SIRIUS EXTENT TO WHICH
ON THERE ASPECTS OF THE CURRENT
ARRANGEMENT.
ARE WITH THEIR BARGAINING
AGREEMENTS THAT ARE --
CONSIDERING MORE GENEROUS THAN
WHAT OTHER AS SCHOOL DISTRICTS
OFFER ANOTHER PARTS OF THE STATE.
YES SENATOR KARENNA RARY
SPECIFICALLY WITH REGARD TO
CERTIFICATE EMPLOYEES TEACHERS
AND OTHERS IN THAT BARGAINING
UNIT.
THEIR HEALTH BENEFITS ARE IN
POST EMPLOYMENT ARE.
IN THE ASSOCIATE OPPOSED
EMPLOYMENT AS WELL FOR ALL OUR
NOT COMPARE BULL THEY ARE IF YOU
WILL OFF THE CHART TO BE VERY
CANDID COMPARED TO THEIR
SURROUNDING DISTRICTS THEIR PEER
GROUPS -- THAT IS [inaudible]
THAT IS.
THE LA HAS AT ISSUE WITH OPEN UP
WITH THE POST EMPLOYMENT -- BUT
NOT GENERALLY SPEAKING WITH ITS
OVERALL HEALTH BENEFITS --
OAKLAND WAS ALSO NOT COMPARISON
WILL COMPARE WILL BUT I WAS ON
THE LOWER END -- SO IN SACKS
CITY A ROUGHLY FIVE HUNDRED
CERTIFICATED EMPLOYEES HAVE
ACCESS TO A PARTICULAR HEALTH
PLAN.
THE CASA DISTRICT ROUGHLY THIRTY
FOUR THOUSAND AND EMPLOYEE PER
YEAR.
RIGHT COMPARES TO ALL THEIR
OTHER EMPLOYEES WHO DON'T HAVE
ACCESS TO THAT ONE PARTICULAR
PLANT BUT HAVE ACCESS TO A
CHOICE OF OTHER PLANS.
THE COSTS ON THE MORE NORMAL.
PHAM. FOURTEEN THOUSAND FIFTEEN
THOUSAND A YEAR AND SO FOR FIVE
HUNDRED EMPLOYEES THE DISTRICT
HIS PAIN A SUBSTANTIAL A MUCH
HIGHER CONTRIBUTION TO THE TUNE
OF AROUND SIXTEEN MILLION
DOLLARS A YEAR [inaudible]
IN.
IN IN FAIRNESS THOUGH TO BOTH
PARTIES THEY BOTH IN THEIR
AGREEMENT A KNOWLEDGE THAT AND
AGREED TO WORK TOGETHER -- TO
ADDRESS THAT -- HOWEVER THE AND
THIS IS A LITTLE BIT OF THE
DISPUTE -- THE THE TEACHERS
AGREEMENT.
BASICALLY WOULD BE TO USE THE
SAVINGS BY ADDRESSING THAT ISSUE
TO LOWER CLASS SIZE INVEST IN
MORE COUNSELORS NURSES AND SO ON
THE DISTRICTS SUBSEQUENT TO THE
AGREEMENT THOUGH SAYS WERE IN
FISCAL DSTRESS.
AND WE REALLY NEED THE SAVINGS
TO GO TO IF YOU WILL THE BOTTOM
LINE TO HELP BALANCE.
RIGHT.
AND SO -- THAT'S WHAT THEY NEED
TO COME TOGETHER AND WORK OUT --
AND TO DATE THAT HASN'T.
MR HERE AND FOLLOW UP THIS IS A
ANY REFERRING TO THE TWO
THOUSAND SEVENTEEN AGREEMENT THE
NOVEMBER.
WHERE MY NOVEMBER SEVENTEEN YES
IF I'M IN THE ONE THAT?
THEY WENT TO THE COLLECTIVE
BARGAINING PROCESS.
AND AS NOTED EARLIER IT YOU
INDICATE GREAT RESPECT FOR THAT
PROCESS AS TO WHY.
SO BOTH PARTIES AGREED TO THESE --
BUT BUT THEY DIDN'T AGREE TO ANY
KIND OF SUBSEQUENT --
RECONCILIATION.
GIVEN THE BUDGET PRESSURES THAT
THAT AGREEMENT WOULD CREATE.
THAT'S CORRECT SIR SO THE SO
THAT THE TEACHERS HAVE STANDING
HERE IN TERMS OF SAYING WE
NEGOTIATE GOOD FAITH.
YOU YOU MADE THAT AGREEMENT WITH
US RIGHT AND NOW YOU WANT TO GO
BACK IN AND RAVEL IRRESPECTIVE
OF WHAT MADE PEOPLE MAY FEEL
ABOUT THE THE COMPENSATION OF
THE BENEFITS PROGRAM THAT
THEY'RE GETTING UNDER IT.
THEY AGREED TO IT.
HI AND SO I KNOW THIS IS
DIFFICULT TO DO -- BUT TO GO
BACK AND SAY WELL WHAT WITH THE
TRUSTEES -- THINKING.
WHEN THEY MADE THAT AGREEMENT?
WELL.
I CAN'T SPECULATE ON WHAT THEY
WERE THINKING WHAT I CAN SHARE
WITH YOU IS THAT IT WAS VERY.
IT WAS VERY CLEAR THAT THEY
COULDN'T AFFORD THE AGREEMENT
THE COUNTY SUPERINTENDENT.
DID A REVIEW OF THE DISCLOSURE
THE GRAMINIS REQUIRED BY LAW
COUNTY SUPERINTENDENT STOOD AT
THE PODIUM IN THE BOARD ROOM AND
SAID AHEAD OF THEIR APPROVAL
AGREEMENT YOU CANNOT AFFORD THIS.
SHORTLY THERE AFTER THEIR FIRST
IN ARMOR PORT.
ON THE DATA REFLECTED THEY COULD
AFFORD IT SUBSEQUENT.
SECOND IN A REPORT A YEAR AGO
THEY COULDN'T.
THAT SAME INFORMATION WAS
AVAILABLE WHAT IT DID IS IT LEFT
THE COUNTY SUPERINTENDENT NO
CHOICE IT WHEN THEY SUBMITTED
THE BUDGET FOR THE CRRENT YEAR.
LAST JUNE.
THAT'S WHEN THE COUNTY
SUPERINTENDENT SAID I DON'T HAVE
A CHOICE -- I NEED TO DISAPPROVE
YOUR BUDGET.
THAT'S WHAT THEN PUT THEM IN ON
THIS PATH OR THE WE CAME INTO
THE FISCAL HEALTH RISK ANALYSIS
AND THERE'S BEEN A DAILY
ENGAGEMENTS -- SEXY.
OKAY -- HARDEST DAY ACTUALLY
UNDERSTAND ALL THAT I MEAN
PRAGMATICALLY WHY WITH THOSE
CHOICES MADE -- DIFFICULT TO
UNDERSTAND THANK YOU.
WAS TO FIND GIVEN THE CORE
MISSION OF THE DISTRICT -- IS IT
POSSIBLE TO CUT SIXTY MILLION
DOLLARS OUT OF A BUDGET.
TO RIGHT THE SHIP.
BEEN EASIER IF THEY'D START A
YEAR AND A HALF AGO -- VERY
CANDIDLY IT WOULD HAVE BEEN A
SMALLER NUMBER AND EVERY CUT
WOULD HAVE HAD MORE OF AN IMPACT
WITH RESPECT TO THE BOTTOM LINE --
THIS IS NOT A SMALL DISTRICTS
GOOD SIZED DISTRICT OBVIOUSLY.
SIXTY MILLION IS A LOT OF MONEY --
LARGE PERCENTAGE.
THEY CAN ONLY DO THAT WITH THEIR
PARTNERS AND THAT WOULD NOT ONLY
BE THE TEACHERS BUT ALL OF THEIR
LABOR PARTNERS -- IN AGREEING --
TO SOME TYPE OF DIFFERENT
WHETHER THAT'S CLASS SIZE
WHETHER IT'S STAFFING RATIOS OF
SOME KIND.
ON THE DISTRICT IF I RECALL
SPENDS THE BETTER PART OF 90% --
ALL OF THEIR BUDGET ON SALARIES
AND BENEFITS.
MORE TYPICAL DISTRICTS RUNS
ABOUT 85% A LITTLE BIT MORE OF A
BALANCE THERE THAT THEY CAN WORK
WITH NON SALARIES AND BENEFITS.
IN THIS CASE THOUGH -- THERE --
MOST SIGNIFICANT -- OPPORTUNITY
TO DO SOMETHING WOULD BE WITH
HOURS OF THAT OFFICE AND THE
REASON I ASK THE QUESTION IS
THAT THE IN THIS SUBCOMMITTEE.
ON THIS PARTICULAR ISSUE ARE
CONCERNED.
FINANCIAL VIABILITY OF SCHOOL
DISTRICTS NOT THE NATURE OF
BENEFITS THAT THEY THE DISTRICT
NEGOTIATES FOR ITS TEACHERS.
BUT WHETHER RATHER DO THEY
NEGOTIATE FOR A CERTAIN SET OF
BENEFITS IN THE CONTEXT OF THEIR
OVER OVERALL FINANCIAL HEALTH.
AND ARE THERE IS THE DISTRICT
WILLING TO MAKE WHATEVER CUTS
ARE NECESSARY TO SATISFY THE
CONTRACTUAL OBLIGATIONS.
YES MY QUESTION ABOUT WHETHER
YOU CAN ACTUALLY CUT SIXTY
MILLION DOLLARS OF THE SCHOOL
DISTRICT BUDGET AND DELIVER RUN
YOUR CORE -- FUNCTION WHICH IS
TO EDUCATE.
YOUNG PEOPLE IN CASE YOU TWELVE
IF I IMPLIED ANYTHING OTHER THAN
THAT THAT'S A DIFFICULT THING TO
DO HI.
WOULDN'T THAT WOULD BE WRONG IT
IS A DIFFICULT THING TO DO.
BUT GENERALLY SPEAKING THE
MAJORITY OF ELEVEN HER SCHOOL
DISTRICTS OUT THERE FACE THESE
KINDS OF DECISIONS EACH DAY
THEIR BOARDS ULTIMATELY STEP UP
FROM PRIORITIZE -- YOU KNOW
NUMBER ONE NUMBER TWO NUMBER
THREE HIGHEST PRIORITIES AND
THAT'S WHAT THEY SPEND THEIR
MONEY ON AND THEY HAVE TO LET
SOME OTHER PRIORITIES GO --
RIGHT THE CONCERN HERE IS THE
LENGTH OF TIME.
THE KNOWLEDGE NUMBER ONE THAT
THEY HAD GOING IN.
THE LENGTH OF TIME IT'S TAKEN TO
ACT -- THE RELATIONSHIP THIS IS
US THIS IS A INDUSTRY IF I CAN
USE THAT TERM A BUSINESS THAT IS
BUILT ON RELATIONSHIPS RIGHT.
STARTS WITH THE STUDENT AND THE
TEACHER THE ADULT THAT THEY'RE
INTERACTING WITH IN THE
CLASSROOM -- ON THE FIELD THAT
RELATIONSHIP IS CRITICALLY
IMPORTANT IT MOVES ALL THE WAY
THROUGH ALL OF THE LEVELS OF A
SCHOOL DISTRICT AND FUNCTIONS OF
A SCHOOL DISTRICT.
ULTIMATELY COMING TO THE BOARD
AND THEIR RELATIONSHIP WITH
THEIR LABOR PARTNERS -- AND
THAT'S NOT A RELATION.
CURRENTLY NOT A WORKING
RELATIONSHIP -- WITH THE
TEACHERS ASSOCIATION THERE'S A
STRONGER WORKING RELATIONSHIP
WITH THEIR OTHER.
LABOR PARTNERS IN THE DISTRICT
BUT WE CERTAINLY CERTAINLY KNOW
AROUND HERE HOW DIFFICULT IT IS
TO CUT.
THE OTHER DECISIONS ARE A LITTLE
EASIER BUT CUTTING IS THE MOST
DIFFICULT THINGS DIFFUSER GLAZER
OR JUST ANOTHER ONE MORE FOLLOW
UP -- AND I KNOW WHAT THIS WILL
BE A DIFFICULT QUESTION FOR YOU
BUT SO YOU'VE IDENTIFIED WHAT
APPEARS TO BE IRRESPONSIBLE
CONDUCT ON THE BACK HALF OF THE
TRUSTEES TO MAKE AN AGREEMENT
THAT THEY THEN DID NOT TO TAKE
THE ACTIONS NECESSARY. TO TO
PERFORM KEEP THE DISTRICT
FISCALLY SOFT RICE THE ACTIONS I
WOULD FOR THE SUBSEQUENT ACTIONS
THAT I WOULD FOCUS ON SO WELL.
ARE THERE THINGS THAT WE SHOULD
HAVE AN POLICY OR LAW.
THAT CAN HELP THIS TYPE OF
CIRCUMSTANCE TOOLS THAT.
THAT YOU DON'T CURRENTLY HAVE
THAT WE NEED TO STOP THIS TYPE
OF IRRESPONSIBLE BEHAVIOR GOING
FORWARD.
SENATOR IT IT'S NOT RARE THAT
THIS HAPPENS IT HAPPENS PROBABLY
MORE FREQUENTLY THAN WE WOULD
ALL ACKNOWLEDGE.
HOWEVER MOST SCHOOL DISTRICTS
STEP UP AND ULTIMATELY DO WHAT
THEY NEED TO DO WHICH IS WHY WE
DON'T HEAR ABOUT IT RIGHT.
INTERN INTO AN AGREEMENT THAT IS
THE RIGHT THING AGREE TO THROUGH
THE PROCESS AT THE TABLE -- AND
FOLLOWING THE TENANTS OF WHETHER
IT'S TRADITIONAL BARGAINING OR
INTEREST BASED BARGAINING -- AND
GOING THROUGH THAT PROCESS
OBVIOUSLY ARE VERY CRITICAL --
AND SOMETIMES.
AGREEMENTS REACH THAT ARE IN THE
BEST INTEREST OF ALL THE PARTIES
HOPEFULLY MAINLY THE STUDENTS
THAT WE'RE ALL HERE TO SERVE --
AND AND SOME ADJUSTMENTS HAVE TO
BE MADE MOST SPORTS STEP UP AND
MAKE THOSE ADJUSTMENTS -- DAY
AFTER DAY AFTER DAY -- SO IN
ANSWER TO A QUESTION WE WOULD BE.
CRAFTING SOME TYPE OF
LEGISLATION OR CONTROL FOR A
VERY FEW FOLKS -- THE COUNTY
SUPERINTENDENT -- I MAYBE IN
THIS CASE IT WOULDN'T BE.
SOME ADDED AUTHORITY FOR FIX
MATTER WOULD BE ADDED AUTHORITY
FOR COUNTY SUPERINTENDENTS WHO
ARE CHARGED WITH THE REVIEW THE
BUDGET IN A REPORT AND THE
REVIEW.
OF THE ANALYSIS DONE ON A THE
DISCLOSURE AROUND THE COLLECTIVE
BARGAINING PROCESS SO
STRENGTHENING THAT PROCESS MAY
BE AN OPPORTUNITY -- WITH
RESPECT TO THE COUNTY
SUPERINTENDENTS ROLE -- BUT IN
THIS CASE I HAVE TO SAY THE
COUNTY SUPERINTENDENT DID
EVERYTHING.
THEY WERE SUPPOSED TO DO.
THEY DID THEIR NOW SAYS THEY
WENT TO THE BOARD MEAN THEY
STOOD THERE AND THEY INFORMED
THE BOARD OF THE ANALYSIS EIGHT
INCHES SEND THE LETTER.
THEY WERE PRESENT -- AND THEY
HAVE RENEWED THAT EACH STEP OF
THE WAY IN THE PROCESS -- SO THE
ONLY ADDITIONAL CONTROL POINT
WOULD BE SOMEONE FORTY FOR THE
COUNTY SUPERINTENDENTS SAY NO
AND THAT'S TO BE CANDID THAT
THAT'S KIND OF PORTION -- THE
LINE OR NOT MAYBE NOT PORTION OF
IT BRING IT BRING IT IN WHERE
WE'VE WE'VE NOT GONE IN THE PAST.
THE WHAT YOU'RE SAYING IS IS
THAT -- WE HAVE TO WAIT TILL THE
CARGOES OVER THE CLIFF AND
CRASHES.
BEFORE WE CAN STEP IN TO TRY TO
CREATE SOME ORDER IN FISCAL
SANITY THAT THERE'S NO WAY TO
CREATE GUARDRAILS TO STOP A
CIRCUMSTANCE LIKE SACRAMENTO --
FROM GETTING FROM GOING OVER THE
CLIFF THAT WOULD USE THE
INTERNET IN MANY RESPECTS YES
AND I CAN GIVE YOU TWO OTHER
EXAMPLES OF THAT -- MONTEBELLO
AND LOS ANGELES COUNTY.
AND UNTIL A FEW MONTHS AGO --
ALLEN ROCK IN SANTA CLARA COUNTY.
IN BOTH CASES THE COUNTY
SUPERINTENDENT STOOD UP AND SAID.
I'M GOING TO KIND OF TAKE
CONTROL HERE AND FOR SOME THINGS
UPON YOU.
YOU DON'T LIKE IT YOU CAN TAKE
ME TO COURT AND SEE IF A JUDGE
WILL STOP ME -- BOTH DISTRICTS
HAVE.
RELUCTANTLY HE ALLOW THAT TO
HAPPEN AND WE SEE IMPROVEMENT
ALLEN ROCK ACTUALLY TURNING
STARTING TO TURN THE CORNER.
MALIK MONTEBELLO STILL A WAYS
OFF BUT BUT HAVE STABILIZE KIND
OF WHERE THEY'RE AT JUST STILL
HAVE TREMENDOUS PROGRESS TO GO --
SO LET ME GIVE YOU AN EXAMPLE --
OF PROCESS.
WHEN A DISTRICT IS?
QUALIFIED OR NEGATIVE THE COUNTY
HAS THE COUNTY SUPERINTENDENT
HAS THE AUTHORITY TO INTERVENE --
THE INTERVENTION UNDER AB TWELVE
HUNDRED IS MEANT TO BE
PROGRESSIVE.
JUST AS THE CERTIFICATIONS ARE
POSITIVE TO QUALIFY DO NEGATIVE
THEIR INTERVENTIONS MEANT TO BE
PROGRESSIVE BASED ON THE NEED.
AND WHETHER THE DISTRICTS OUT.
THAT INTERVENTION SHY OF STATE
INVOLVEMENT INCLUDES THE
ASSIGNMENT OF A FISCAL ADVISER
WITH THE UNIVERSE AND AUTHORITY.
TO COUNTY SUPERINTENDENT CAN DO
THAT TODAY.
SO STAY IN RESENT AUTHORITY
WOULD BE THAT FISCAL ADVISOR
HELPS TO DISTRICT DEVELOP A
FISCAL STABILIZATION PLAN.
AND IF THE BOARD OF EDUCATION
ELECTED BOARD OF EDUCATION TAKES
ANY ACTION THAT'S INCONSISTENT
WITH THAT FISCAL PLAN THE TRIP
THE FISCAL VISOR CAN STAY OR
RESCIND THEIR ACTION.
HOWEVER AS YOU APPRECIATE YOU
HAVE TO TAKE ACTION TO HAVE SOME
STATE RESENT SO LET ME GIVE AN
EXAMPLE OF MONTEBELLO.
BONTA BELL CURRENTLY AND FOR
OVER TWO YEARS HAS HAD A VACANCY
IS IS CHIEF BUSINESS OFFICIAL.
FOR OVER A YEAR CHIEF
[inaudible]
PERSONNEL FISHEL.
I THINK FOR OVER A YEAR CHIEF
PURCHASING OFFICIAL I BELIEVE
ALSO OVER A YEAR CHIEF
FACILITIES OFFICIAL ALL AREAS.
OF DISTRESS IN THE DISTRICT.
CENTER DOESN'T APPLY IF THE
BOARD NEVER HIRES OR HIGHER IS
THE WRONG PERSON IT WOULD APPLY.
RIGHT BUT THE COUNTY DOESN'T
HAVE THE AUTHORITY TO GO IN AND
PUT SOMEBODY IN THOSE CHAIRS TO
HELP THE DISTRICT.
THE STATE WAS IN THOSE VERY
CRITICAL POSITIONS SO WE'VE BEEN
A LITTLE CREATIVE THIS YEAR --
IN MNTEBELLO GIVE AN EXAMPLE OF
THE COUNTIES BUT LEADERSHIP
THEY'VE APPOINTED FIVE FISCAL
ADVISORS.
TYPICALLY ONE THIS IS APPOINTED
RIGHT.
SO ONE IS THERE OVERSEEING THE
WHOLE. ONE IS FOCUSED ONLY ON
THE BUSINESS OPERATIONS ONE ON
THE PURCHASING OPERATIONS ONE ON
THEH. R. OPERATIONS.
AND THAT'S ALL IN ATTEMPT TO
BEEF THIS UP DESPITE THE BOARDS
AND WILLINGNESS TO DO WHAT.
FRANKLY THEY'RE THERE TO DO.
SO I GIVE YOU SOME EXAMPLES YOU
KNOW SOME COUNTY SOUPS ARE
WILLING TO PUSH THAT ENVELOPE
RIGHT AND BASICALLY TELL A
DISTRICT BOARD I'M DOING THIS
YOU DON'T LIKE IT WE CAN.
YOU KNOW WHAT A JUDGE DECIDE --
YOU KNOW AGAIN BACK TO YOUR
QUESTION WAYS TO STRENGTHEN SOME
OF THAT THERE'S THERE'S LIKELY
SOME WAYS TO STRENGTHEN -- THAT
ROLE IN CERTAIN.
UNDER CERTAIN CONDITIONS
ESPECIALLY SINCE THE STATE ON
THE HOOK IF THERE'S BANKRUPTCY
ALTERNATELY READING THAT'S THE
WHOLE POINT OF THE IN THE BY
DECISION AND ALL THE THINGS YOU
CAME OUT THAT'S WHY FIGURE OUT
WAS GREAT IN THE FIRST PLACE OR
DESK.
THAT'S CORRECT SIR IT'S REALLY
TO AVOID OF THE NEED TO FILE.
PROTECTION UNDER BANKRUPTCY --
SO -- SCHOOL DISTRICTS HAVE
ACCESS TO THE US BANKRUPTCY
PROTECTION WE THE LEGISLATURE'S
NEVER ALLOWED HIM TO GET THE
AFTER OUR RIGHT BY STEPPING IN.
AS THEIR POLITICAL SUBDIVISIONS
OF THE STATE THEY'RE SUBJECT TO
YOUR OF FORTY AND YOU'VE ALWAYS
HISTORICALLY STEPPED IN AND
PROVIDED.
THE REESE THE CAST TEMPORARY
CASH RESOURCES THEY NEED
REMEMBER STATE EMERGENCY
PREPARATION AS A BALANCE OUR
BUDGET.
IT PROVIDES THE CASH THEY NEED
TO MEET PAYROLL IN THEIR OTHER
OBLIGATIONS.
THEY STILL HAVE THE WORK TO DO
TO BALANCE THE BUDGET. TO
ADDRESS MY COLLEAGUE BECAUSE
SENATOR GLAZERS OF QUESTION AND
COMMENT IN A THE PROBLEM IS IT'S
VERY DIFFICULT I WOULD THINK FOR
A COUNTY.
SUPERINTENDENT TO GET INVOLVED
AT THE COLLECTIVE BARGAINING
NEGOTIATIONS STAGE BECAUSE
PEOPLE BEST EQUIPPED TO
NEGOTIATED AN MO YOU OR
COLLECTIVE BARGAINING AGREEMENT
OF THE PEOPLE ON THE GROUND.
BOTH ON THE ON THE
ADMINISTRATION SIDE AND ON THE
ON THE TEACHING AND AND THE
CLASSIFIED SIDE.
NOT AT THE COUNTY OFFICE SO
YOU'RE ALMOST.
ROME WAS FORCED TO DEAL WITH THE
CONSEQUENCES OF COLLECTIVE
BARGAINING GLACIATION RICH MEANS.
DEALING WITH THE CONTRACT IT'S
BEEN APPROVED.
PROPERLY OR NOT AND SO IT'S AT
THAT POINT THAT WE NEED TO SEEMS
TO ME WE NEED.
TO TAKE A SNAPSHOT AND AND
HOPEFULLY ALL FOUR TIRES ARE OFF
THE ROAD JUST ONLY.
TO WE GOT YOU'RE WELCOME.
COMPLETELY AGREE SIR IN FACT
INTRODUCING THE COUNTY
SUPERINTENDENT THAT PROCESS
WOULD BE ALMOST A THIRD PARTY
AND WOULD EVEN.
POTENTIALLY.
GET US INTO SOME UNFAIR
BARGAINING UNFAIR LABOR -- TYPES
OF THINGS SO ALLOW ME QUICKLY TO
CONCLUDE SOLVENCY TRAIL -- SONG
SEE TRENDS WE ARE SEEN THE THREE
YEAR MULTI YOUR PROJECTION START
TO FORECAST -- DEFICIT TRENDS --
IN DISTRICTS MORE DISTRICTS EACH
TIME THEY PREPARE THESE -- AND
DISTRICTS THE DISTRICT HAVE SOME
WORK TO DO -- OBVIOUSLY IN THE
OUT YEARS TO BALANCE THAT IS
THAT ON THE EXPENSE SIDE OR ON
THE REVENUE SIDE WE WELL THESE
THE NET OF THE TWO SO WE'VE NOT.
WE COULD ADDRESS SOME OF THAT
ARE SO YOU CAN -- SO WHAT THIS
REALLY IMPLIES A DEFICIT --
TRENDING IMPLIESTHAT EXPENSES
ARE GOING UP BUT YEAR OVER YEAR
AT A HIGHER RATE THAN REVENUE.
IS GOING UP -- TO CLOSE AB ONE
THIRTY NINE EXTRAORDINARY AUDITS --
WE SPOKE ABOUT THESE BRIEFLY
THESE ARE WERE ONE OF THE FIFTY
EIGHT COUNTY SUPERINTENDENTS
RECEIVES AN ALLEGATION.
THEY DO SOME DUE DILIGENCE ABOUT
THAT AND IF THEY WANT TO PURSUE
THE MATTER -- REGARDING FRAUD
MISAPPROPRIATION OF PUBLIC FUNDS
OR OTHER ILLEGAL ACTIVITIES.
THEY CAN COME TO FIX MATT -- AND
WE WILL DO THAT WORK FOR THEM --
THEY ARE NOT OBLIGATED TO COME
TO US AND GO TO A PRIVATE
PROVIDER PROVIDER.
THE ADVANTAGE OF COMING TO US IS
NUMBER ONE OUR STATE A
PREPARATION PAYS FOR THAT WORK --
AND NUMBER TWO YOU GET SCHOOL
BUSINESS EXPERTS NOT JUST -- ANY
AUDITOR AUTHOR DOING ABOUT 75%
OF OURSTAFF HAVE CERTIFIED
FRAUD EXAMINER -- CERTIFICATIONS
AND WE MAINTAIN WE HELP THEM
MAINTAIN THOSE -- A YEAR AGO WE
WERE EXPERIENCE IN A A ALL TIME
PEAK -- OF THESE -- ACTIVITIES --
TWENTY ONE I BELIEVE WAS THE
NUMBER A YEAR AGO THE PRIOR PEAK
FOR US HAVE BEEN TEN SO WITH
MORE THAN DOUBLE THE PRIOR PEAK --
ALMOST BROUGHT US TO OUR KNEES --
THE THE FIRST BULLET HERE IS
REALLY WE ARE BACK IN A MORE
NORMAL LEVEL OF ACTIVITY RIGHT
NOW -- WHICH IS I THINK GOOD
NEWS -- WE HAVE ONE HIGH PROFILE
REPORT THAT'LL BE RELEASED THE
NEXT THIRTY TO FORTY FIVE DAYS
THAT DEALS WITH LEASE LEASE
BACKS.
A SUBJECT THAT THE LEGISLATURE'S
TAKEN ON SEVERAL TIMES.
WE HAVE ONE HIGH FULL PROFILE
AUDIT THAT IS JUST BEGINNING I
ALLUDED TO THAT ONE EARLIER AND
THAT WOULD BE -- THE THE
SWEETWATER -- FOLLOW UP THAT THE
COUNTY -- BASED ON OUR DECEMBER
REPORT -- THE COUNTY HAS --
ASKED US -- TO GO A LITTLE
DEEPER ON THEIR CASH BORROWING
ON THERE BUDGET ENTRIES AND ON
THEIR FAILURE TO POST PAYROLL
FOR FOUR MONTHS LAST YEAR --
THAT CERTAINLY HAPPY TO ANSWER
ANY ADDITIONAL QUESTIONS
COLLEAGUES ANY FURTHER QUESTIONS
THEY'RE OUT YEAH I SO JUST
GETTING BACK TO THIS WHOLE --
THE ISSUE OF OF THE POST SIMPLY
BENEFITS DO YOU KNOW SOME GOOD
AND BEST PRACTICES IN THIS AREA
IT SEEMS TO ME THAT THERE ON
THAT THE THERE ARE.
A LOT OF PROGRAMS OUT THERE FROM --
MEDICARE. TO COVER CALIFORNIA
ACA.
THAT ARE THAT ARE AVAILABLE TO
ANY EMPLOYER -- TO HALF THEIR
THEIR RETIREES GET BENEFITS.
I UNDERSTAND THAT THE THAT WHICH
HAS BEEN NEGOTIATED SOME OF
THESE CASES IS.
SIGNIFICANT MORE GENEROUS THAN
WHAT IS CURRENTLY OFFERED BY THE
EXISTING -- INFRASTRUCTURE FOR
EVERYBODY AND THAT'S FINE BUT
YOU KNOW WHAT.
WHAT WHAT THE DISTRICT CAN DO I
WOULD PRESUME IS PURCHASED LIKE
A SUPPLEMENT?
THAT WOULD GET THEM
SUBSTANTIVELY UP TO THE LEVEL OF
WHATEVER WAS NEGOTIATED.
AS A BENEFITS PACKAGE BUT AT THE
SAME TIME STILL OFF LOAD A
SIGNIFICANT PORTION OF THE COST
ON TO THE FEDERAL GOVERNMENT THE
STATE GOVERNMENT WHOEVER ELSE.
IT IS OUT THERE THE TOPPING TO
FUND THESE PROGRAMS.
I'M ARE YOU SEE SO CAN YOU TALK
ABOUT THAT A LITTLE BETTER AS A
AS A WAY OF SAVING MONEY FOR
SCHOOL DISTRICTS BY THE WAY THAT
WE JUST WE TAKE ALL THE SAVINGS
WE ROLL IT INTO.
YOU KNOW DECREASING CLASS SIZE
AND HAVING MORE TEACHERS PAYING
TEACHERS BETTER WHAT THEY
DESERVE YOU PAID WHICH THEY ARE.
YOU KNOW TOàN TO PAY.
OUR AND ARE THERE OTHER
DISTRICTS THAT ARE UTILIZING
THIS AS A AS A AS A YOUR GOOD
PRACTICES THIS BEING LOOKED AT
AS A POTENTIAL WAY OF TRYING TO
ADDRESS SOME OF THESE SERIOUS.
FINANCIAL CHALLENGES THAT ON THE
DISTRICTS THAT ARE MOST
DISTRESSED THAT ARE NOW HAVING
SERIOUS LABOR.
UNREST ARE FACING.
THE SENATOR -- I I WON'T BE THE
EXPERT TO BE ABLE TO STE TELL
YOU KIND OF WHAT THE TRENDING IS
OUT THERE HOW MANY DISTRICTS ARE
DOING IT BUT THE EXACT THING
THAT YOU JUST DESCRIBED ABOUT
PARTNERING WITH PRE EXISTING
PROGRAMS AND PAIN.
IF YOU WILL THE SUPPLEMENT OR
THE DIFFERENCE INCLUDING FOR THE
PRESCRIPTION DRUG SUPPLEMENT AND
AND SO ON FOR EXAMPLE IN A
MEDICARE IS A FAIRLY COMMON
PRACTICE FOR YOUR POST
EMPLOYMENT WERE BENEFITS ARE
OFFERED -- ONCE YOU ARE MEDICARE
ELIGIBLE RIGHT -- AS AN EXCUSE
ME MEDICARE'S AN EXAMPLE THAT'S
A FAIRLY COMMON PRACTICE -- I
THINK AND IT DOES SAVE
CONSIDERABLE MONEY -- FOR THOSE
DISTRICTS THAT THE FEW THAT ARE
LEFT THAT OFFER LIFETIME
BENEFITS -- GENERALLY THAT'S
PROBABLY NOT THE APPROACH
THEY'RE TAKING THOSE LIFETIME
BENEFITS A OFFER AT LEAST THE
EMPLOYEE.
MAYBE NOT ALL PFAM NOT MAYBE NOT
SPOUSE SIM KIDS AT THAT POINT
ARE PART OF THE OTHER DEPENDENTS
ARE PART OF THE PICTURE.
BUT THE SPOUSE -- GENERALLY
OFFER A PARTICULAR ACCESS TO A
PLAN IT MAY BE A NOT UNCOMMON TO
SAY THE LOWEST COST PLAN WE THE
DISTRICT WILL PAY.
UPON RETIREMENT THE LOWEST COST
PLAN AND IF YOU WANT TO PAY UP.
TO SAY PPO YOU CAN CONTRIBUTE
THE DIFFERENCE RIGHT SO THOSE
THOSE ARRANGEMENTS ABSOLUTELY DO
EXIST ARE THEY THE MAJORITY OF
THE ARRANGEMENTS LIKE I CAN'T
SPEAK TO THAT -- I GIVE YOU A
NUMBER THAT I A WAS.
THAT I SAW IN THE ANALYSIS THAT
WE WERE DOING -- IN LA DURING
THEIR LABOR DISPUTE -- IF I
RECALL CORRECTLY I DON'T HAVE IN
FRONT OF ME.
THEIR CONTRIBUTION FOR RETIREES
WAS IN THE EIGHT TO NINE
THOUSAND DOLLARS RANGE COMPARED
TO AN ACTIVE EMPLOYEE AND
FOURTEEN FIFTEEN THOUSAND
ACTUALLY WAS HIGHER THAN THAT I
BELIEVE.
RANGE AND SO THAT TO ME THAT
DIFFERENCE IN CONTRIBUTION WOULD
BE EVIDENCE OF EXACTLY WHAT
YOU'RE TALKING ABOUT -- MAYBE
NOT QUITE THE DIFFERENCE YOU
WERE YOU WERE THINKING THERE
WOULD BE BUT THAT WOULD BE
EVIDENCE THAT YOU WERE WITH THAT
THAT WAS IN AS LA.
WHICH HAS OUR LARGEST OPEN A
LIABILITY.
AMONG SCHOOL DISTRICTS.
SO IS THERE A IS THERE AN
ATTEMPT TO TRY TO AND WHAT
WHAT'S THE WHAT'S THE STATE OF
PLAY TO ADDRESS I MEAN THIS
SEEMS TO BE OF OF A RELATIVE I
MEAN OF ALL THE DIFFICULT
DECISIONS AT ALL UC'S GONNA HAVE
TO FACE.
THIS SEEMS LIKE A RELATIVELY.
PAINLESS WAY OF ADDRESSING THEIR
LONG TERM LIABILITIES IN A WAY
THAT DOESN'T -- DOESN'T
SUBSTANTIVELY IMPACT THE QUALITY
AND SERVICE OF BENEFITS PROVIDED
TO THOSE RETIREES.
SO I I I WOULDN'T IN ANY WAY
DISAGREE WITH YOU -- I THINK
IT'S THOUGH A TAD MORE
COMPLICATED SO IN LA'S CASE --
AND I BELIEVE THIS APPLIES TO
THEIR RETIREES -- BENEFITS
AROUND -- I'M SORRY DECISIONS
AROUND HEALTH BENEFITS ARE MADE
BY A COMMITTEE OF WHICH THE
DISTRICT IS. ONE MEMBER ONE
VOICE ONE VOTE OF THAT COMMITTEE
SO THE COLLECTIVE BARGAINING
PROCESS WHICH GOVERNS THAT HAS.
DEFERRED ALL DECISIONS ABOUT
DETAILS AROUND HEALTH CARE --
AND PLANS AND PROGRAMS TO A
HEALTH BENEFITS COMMITTEE THAT
MEMBERSHIP IS MADE UP OF EACH OF
THE LABOR PARTNERS AND THE
DISTRICT AND THEY ALL HAVE AN
EQUAL.
VOTE.
THEN WHAT THE BOARD DETERMINES
IS -- THE MOUNT OF CONTRIBUTION
THE DISTRICTS WILLING TO MAKE ON
AN ANNUAL BASIS IN LA'S CASE
THEY'VE COMMITTED TO THE OUT FOR
A THREE YEAR PERIOD OF TIME.
I'M.
BELIEVE WE'RE ON OUR THE LAST
YEAR OF THAT THREE YEAR
AGREEMENT RIGHT NOW -- I LEVEL
OF CONTRIBUTION THE COMMITTEE
THEN FIGURES OUT THE PLANS BASED
ON THEIR ENROLLMENT IN EACH PLAN
AND AND COVERS -- A CERTAIN
ELEMENT OF THE COST WITH THE
DISTRICT'S CONTRIBUTION SO THAT
LA YOU.
WATER BEST EXAMPLE ON OPEN HAVE
IT'S PROBABLY NOT ARE EASIEST
EXAMPLE TO ADDRESS -- YOU'RE
THINKING AROUND -- SIMPLY
BECAUSE IT'S GOT A LOT OF LAYERS
OF COMPLEXITY TO IT -- BUT
BECAUSE I CAN CIRCULATING
STRUCTURE YES ALL RIGHT I CAN
TAKE YOU TO DISTRICTS THAT ARE
DOING EXACTLY WHAT YOU'RE DOING.
EXACTLY WHAT YEARS WHAT YOU
DESCRIBE WHAT YOU'RE SAY
ACTUALLY THE MOST DISTRICTS DO
WHAT WE ARE TO SOME EXTENT I
WOULD GUESS FOR THOSE THAT OFFER.
POST SIXTY FIVE NOT POST
EMPLOYMENT DON'T OFFER IT ALL
SOME TAKE YOU OUT FROM
RETIREMENT TO MEDICARE ELIGIBLE
AND YOU JUST GO TO MEDICARE THEN
YOU JUST GO ON RIGHT SOME TAKE
YOU.
SOME OFFER YOU A MINIMUM OF TEN
YEARS IF YOU'RE RETIRED SIXTY
FOUR THEY WILL CONTRIBUTE.
IN ADDITION ON THE PLAN ONE YEAR
WHEN THEY BECOME MEDICARE
ELIGIBLE THEY'LL PAY.
BUT THERE ARE THESE PRODUCTS OUT
THERE THAT SENATE DISTRICT COULD
PAY.
FOR THAT WOULD PROVIDE A SUBSIDY
OF A SIMILAR.
BENEFIT PACKAGE TO WHAT THEY'RE
CURRENTLY GETTING.
BUT ALSO ALLOW FOR THE THE BASE.
CARE TO BE COVERED BY SOMEONE
OTHER THAN THAT.
THE DISTRICT WHAT'S CALLED A
SUPPLEMENT RIGHT.
AND THAT THAT THAT PRODUCT
EXISTENCE TO GET GETS AN OPTION
THAT THAT YEAH IN A VERY FAIRLY
MATURE MARKET RIGHT YES PRODUCT
AREA.
RIGHT YEAH SO I'M FASCINATED BY
THE SELLING PROCESS SO DOES THE
BOARD FIRST IDENTIFY FOR THE
COMMITTEE THE TOTAL OF THE
AMOUNT OF MONEY THAT THEY'RE
WILLING.
TO THAT THE BOARD IS WILLING TO
DIRECT.
TO POST EMPLOYMENT -- HEALTHCARE
BENEFITS AND THEN THE COMMITTEE
WORKS WITHIN THAT DOLLAR FIGURE
TO DETERMINE THE APPROPRIATE
PLAN OR IS OR THE WAY AROUND SO
IT IS A COLLECTIVE BARGAINING
IT'S SUBJECT TO COLLECTIVE
BARGAINING THE CONTRIBUTION.
BUT THEY DO AT THE TABLE OF
COLLECTIVE BARGAINING THEY DON'T
GET INTO THE PLAN DETAIL.
AND THE RELATIONSHIP WITH THE
PLAN PROVIDERS AND WHAT LEVELS
WHAT COPAY WOULD BE ALL THOSE
THAT'S LEFT TO THE COMMITTEE. TO
THE COMMITTEE THROUGH THE
COLLECTIVE BARGAIN PROCESS AND
DOES GET ALL TWENTY OF BUDGET
RIGHT FUNDED BY THE DISTRICT
THEY MAKE A DETERMINATION IF
THERE'S GOING TO BE.
WHAT COPAYS WOULD BE WHAT A
PAYROLL DEDUCTION MAY BE BUT IN
LA THE COLLECTIVE BARGAINING
PROCESS?
AND THE RESULT WHICH IS THE
AGREEMENT WOULD PROVIDE THAT
THERE WOULD BE A HEALTH POST
EMPLOYMENT HEALTH BENEFIT
PROVIDED.
AS A PRIMARY BENEFIT NOT AS A
SUPPLEMENT THAT WOULD BE THE
DECISION THEY MAKE AT THE
BARGAINING TABLE I ASSUME AND
ONE THEY MADE MANY YEARS AGO AND
THEN DECIDE HOW TO FUNDED.
AND THAT DECISION IS.
THE PLANNED THE SPECIFICS ARE
LEFT TO THE COMMITTEE
INTERESTING.
BEFORE THE QUESTIONS.
ZERO WAS FINE IT'S ACTUALLY
PRESENTATION WAS THANK YOU FOR
THE GREAT WORK YOU DO FORWARD TO
SEEING YOU BACK HERE.
LET'S MOVE ON TO ISSUE NUMBER
TWO RESEARCH PERSPECTIVES ON
SCHOOL DISTRICT FISCAL PRESSURES
THIS AS IN THE CASE OF THE LAST
ITEM ARE -- IS AN INFORMATIONAL
ONLY INFORMATION ONLY ITEM.
SO IF I COULD ASK OUR PANELISTS
TO JOIN US [inaudible]
HELLO.
GENERAL IF YOU WOULD TO IDENTIFY
YOURSELVES FOR ME STARTING TO MY
LEFT YOU'RE RIGHT SIR.
CORY COULD L. SO HE PROFESSOR OF
ECONOMICS AND PUBLIC POLICY THE
UNIVERSITY MISSOURI.
I'M PAUL BERNAMA PHD STUDENT AT
THE UNIVERSITY OF SOUTHERN
CALIFORNIA.
PAUL WARNED OF WITH THE PUBLIC
POLICY INSTITUTE OF CALIFORNIA.
JUST ELEVEN ON A PRINCIPAL
RESEARCH ECONOMIST WITH THE
AMERICAN INSTITUTE FOR RESEARCH.
OKAY THANK YOU FOR JOINING US
WHO WANTS TO START FIRST --
THINK WE'RE GONNA GO IN ORDER OF
THE PROGRAM.
OKAY AND GO FIRST SO -- THANKS
SO MUCH FOR YOUR INTEREST IN
THIS TOPIC -- I'M GONNA START
OFF BY TALKING A LITTLE BIT
ABOUT.
THE ADEQUACY STUDY THAT WE DID
FOR GETTING DOWN TO FAX -- TO
AND I THINK WE GOT ABOUT FIVE TO
SEVEN MINUTES OF PEACE SO I'LL
TRY TO KEEP IT BRIEF -- SO.
THE CONDUCT OF THE AN ADEQUACY
STUDY OR A COSTING OUT STUDY I
KNOWN AND THE IDEA HERE IS TO
TRY TO ESTIMATE THE COST OF
PROVIDING AN ADEQUATE EDUCATION
FOR ALL STUDENTS REGARDLESS OF
THEIR BACKGROUND AND
CIRCUMSTANCES.
FROM AND WHAT WE DID IS WE
APPLIED WHAT'S CALLED THE
PROFESSIONAL JUDGMENT APPROACH
WHICH RELIES ON EXPERT EDUCATORS
OPINIONS.
ON IN TERMS OF DEVELOPING SCHOOL
LEVEL PROGRAMS FROM THE GROUND
UP.
FOR DIFFERENT TYPES OF SCHOOL
SETTINGS THAT IS WITH RESPECT TO
SCALE HOW LARGE THE SCHOOL IS IN
NEED.
AND WHEN I SEE DESIGN THE SCHOOL
PROGRAMS IS NOT JUST DESIGNING
SCHOOL PROGRAMS AT SPECIFYING
THE RESOURCES NECESSARY THAT IS
THE STAFF IN THE NON PERSONNEL --
THAT WILL ACHIEVE.
ADEQUACY -- AT A MINIMUM COST.
SO.
THAT'S WHAT WE DID NOW YOU MIGHT
ASK WHAT IS THE DEFINITION OF
ADEQUACY WHAT WE USED HERE WAS
REALLY -- THE DEFINITION WAS
ALLOWING ALL STUDENTS -- TO TO
ACHIEVE THE ACADEMIC STANDARDS
SET BY THE STATE BOARD OF
EDUCATION AND ALSO HAVING ACCESS
TO THE CONTENT STANDARDS.
OKAY -- SO I I WANT TO SHARE
WITH YOU.
OUR FINDINGS -- WE WE CALCULATED
THAT.
IT WOULD BE A SIZEABLE AMOUNT.
OF EXTRA SPENDING TO TO BRING --
TO TO OFFER AN ADEQUATE
EDUCATION ALL STUDENTS -- ON THE
ORDER OF ABOUT A 38% INCREASE
OVER CURRENT EXPENDITURES AND
THIS ISN'T SIXTEEN SEVENTEEN
THAT WE'RE TALKING ABOUT -- SO
IN IN TERMS OF ABSOLUTE DOLLARS
WE WERE SPENDING ABOUT SIXTY SIX
POINT SEVEN BILLION.
PER YEAR -- IN IN THAT YEAR AND
IT WOULD HAVE TO GO TO A TWENTY
FIVE POINT SIX BILLION DOLLAR
INCREASE ABOVE THAT ANNUALLY.
ANNUALLY IF WE BRING THAT INTO
PER PUPIL TERMS -- IT WAS ABOUT
TWELVE THOUSAND TWO HUNDRED AND
FOUR WAS ARE ARE.
A STATEWIDE AVERAGE OPERATING
SPENDING AND THAT WOULD GO UP TO
SIXTEEN THOUSAND EIGHT HUNDRED
AND NINETY DOLLARS.
OKAY -- WE ALSO DO DIDN'T STOP
AT JUST LOOKING AT THE AGGREGATE
STATEWIDE BUT WE ALSO WANT TO
SEE HOW THE THE THESE ADEQUACY
GAPS THAT IS THE DIFFERENCE
BETWEEN ARE PROJECTED ADEQUATE
COST.
AN ACTUAL SPENDING HOW MIGHT
THAT VARY ACROSS DIFFERENT
DISTRICTS WITH DIFFERENT
CHARACTERISTICS SO ONE OBVIOUS
CUT IS WE SPLIT DISTRICTS INTO A
COURT TILES BASED ON THE LEVEL
OF POVERTY STUDENT POVERTY -- AS
A PROXY BY STUDENT PERCENTAGE OF
STUDENTS ELIGIBLE FOR FREE OR
REDUCED PRICE LUNCH -- AND WHAT
WE FOUND IS THAT THE ADEQUACY
GAP THAT IS THAT DIFFERENCE
BETWEEN PROJECTED.
ADEQUATE SPENDING AND ACTUAL
SPENDING WAS LARGEST AS YOU
MIGHT EXPECT IN THOSE HIGHEST
POVERTY DISTRICTS AND LOWEST IN
IN IN IN THE LOWER PART
DISTRICTS SO WELL STATE WIDE
WEEK WE ESTIMATED A 38% GAP --
THIS VERY IT'S THE LOW POVERTY
DISTRICTS.
HAD A GAP OF ABOUT 22% WHERE IS
THE HIGHEST POVERTY DISTRICTS
HAD A GAP ON AVERAGE OF ABOUT
46%.
OKAY.
WE WE WE ALSO DID A CUT BY --
LOCALES SO WE SPLIT UP DISTRICTS
INTO URBAN -- INTO THE URBAN THE
LARGE TOWNS THE THE THE THE
SMALL TOWNS WILL SUBURB IN SMALL
TOWNS AND AND RURAL REMOTE
DISTRICTS AND WHAT WE FOUND IS
THAT THE RELATIVE.
DIFFERENCE BETWEEN ADEQUATE AN
ACTUAL SPENDING -- WAS REALLY
HIGHEST AMONGST THE RURAL
DISTRICT.
AND LOWER AMONGST THE THE URBAN
DISTRICTS.
THE RELATIVE DIFFERENCE BETWEEN
WHAT WE PROJECTED AS ADEQUATE.
SPENDING AND WHAT THEY'RE
ACTUALLY SPENDING.
THAT IS THE DIFFERENCE THAT THAT
THAT YOU WOULD HAVE TO TO MAKE
UP TO PROVIDE AN ADEQUATE
EDUCATION.
WE GET WE CAN REFER TO THAT AS
THE ADEQUACY GAP IF YOU WANT.
IT WAS HIGHEST WE'RE IN IN THE
RURAL DISTRICTS ON NOW THERE ARE
FAR FEWER STUDENTS IN RURAL
DISTRICTS THAN IN URBAN
DISTRICTS SO IN.
AT IN TERMS OF AN ABSOLUTE COST
IT WOULD BE ABOUT THREE BILLION
OF THAT THAT TWENTY FIVE POINT
SIX BILLION EXTRA THAT WE WOULD
HAVE TO SPEND.
WHICH WOULD COVER ALL OF THE
STUDENTS IN THE AND AND THE THE
RURAL DISTRICTS AND THE SMALL
TOWNS CATEGORY THE MOST RURAL
DISTRICTS IN OUR IN OUR STATE --
SO THAT THOSE DIFFERENCES REALLY
QUICKLY THEY THEY WERE NOT A
STARK AS THE LOW TO THE HIGH
POVERTY CONTRAST THAT I THAT I
GAVE YOU SO THE BELOW.
THE LOW HIGH CONTRAST WAS WAS --
22% AND 46% FOR THE ROAR THE
COMPARISON BETWEEN THE ROLES AND
THE URBAN DISTRICTS.
WAS -- 46406% FOR THE RURAL
DISTRICTS AND 37% FOR THE THEIR
BUSINESSES NOT AS MUCH OF A
CONTRACT AND THIS DOES THAT DOES
THAT SUGGEST THAT THAT OUR
SYSTEM OF FUNDING THAT WE PUT IN
PLACE A FEW YEARS AGO WITH.
WHICH AT SUPPLEMENTAL IN
CONCENTRATION GRANT COMPONENTS
IS.
IS IS EITHER INEFFECTIVE WORKS
TOO SOON TO TELL I DON'T WANT TO
SAY THAT IT'S INEFFECTIVE BUT WE
DID FURTHER ANALYSIS AND TO TO
TO LOOK AT HOW OUR ADEQUACY
PROJECTIONS -- WHAT TYPES OF
RELATIONSHIPS BETWEEN SPENDING
AND POVERTY SPENDING IN SPECIAL
EDUCATION SPENDING IN ENGLISH
LEARNERS -- WHAT ARE PROJECTIONS
WOULD SUGGEST THOSE
RELATIONSHIPS BUT SHOULD BE ND
THE THE RESULT OF THAT IS REALLY
THAT THE L. C. F. F. IS NOT
AGGRESSIVE ENOUGH?
IN TERMS OF ITS DISTRIBUTIVE
PROPERTIES OR OR OR BEING
PROGRESSIVE ENOUGH SO TO SPEAK
SO I DON'T WANT TO SAY THAT IS
INEFFECTIVE BECAUSE I DON'T
THINK THAT IT'S AN EFFECTIVE AT
ALL.
IT'S JUST -- ACCORDING TO THE
ADEQUACY MODELS AND CALCULATIONS
THAT WE MADE WE THINK IT COULD
GO FURTHER I'M STILL IN SHOCK AT
TWENTY FIVE POINT SIX BILLION IN.
YEAH NOT THAT I DON'T THINK IT.
IS NEEDED I'M JUST TRYING TO
FIGURE OUT HOW.
HOW TO PUT THAT IN CONTEXT IN
TERMS OF OUR STATE BUDGET
REALITY ABSOLUTELY SO SO THERE
IS - FOR LACK OF BETTER TERM
STICKER SHOCK.
WHEN WHEN YOU HEAR THAT FIGURE --
38% IS A LOT AND TWENTY FIVE
POINT SIX BILLION PER ANNUM IS
IS IS ALSO A LOT SO WHAT WHAT WE
DID IS WE TRY TO PUT INTO THE
NATIONAL CONTEXT.
AND INSTEAD OF SEEING IT AS SUCH
A LARGE INCREASE FOR CALIFORNIA
WE TRY TO PUT IN THE CONTEXT OF
WHAT OTHER STATES ARE CURRENTLY
SPENDING AND IN PARTICULAR THOSE
STATED THAT HAVE BEEN LAUDED AS
FUNCTIONING REASONABLY WELL.
SO JUST TO GIVE YOU SOME IDEAS
THE ADEQUATE COSTS THAT WE
PROJECTED.
ARE LESS THAN THE STATE WHAT THE
STATE'S.
THE STATE'S WERE CURRENTLY
SPENDING ON EDUCATION IN TWENTY
SIXTEEN SEVENTY SO.
OUR ADEQUACY COSTS WERE 2% LESS
THAN WHAT MASSACHUSETTS WAS
CURRENTLY SPENDING IN THAT SAME
YEAR -- FOR OTHER NORTHEASTERN
DISTRICT IS CONSIDERABLY LOWER
SO FOR VERMONT ARE ADEQUACY
FIGURES WERE 15% LESS THAN THEIR
ACTUAL SPENDING. FOR NEW JERSEY
IT WAS 16% CONNECTICUT 17% AND
OUR ADEQUACY FIGURES WERE 28%
LOWER THAN WHAT NEW YORK WAS
SPENDING.
IN THE SAME YEAR ON A PER PUPIL
BASIS THE DO YOU.
DO YOU KNOW WHAT PROCESS HOW THE
PERCENTAGES OF THE OVERALL STATE
BUDGETS IN THOSE STATES -- I
DON'T OFF OFF THE TOP OF MY HEAD
BUT I CAN CERTAINLY GET YOU THAT
INFORMATION IT'S PRETTY EASY TO
FIND -- SO -- I I THINK I MET
SEVEN AND A HALF MINUTES ALL
STOP RIGHT THERE BUT I'M I'LL BE
HAPPY TO ANSWER MORE QUESTIONS
AS WE GO.
ALONG QUESTIONS.
I DIDN'T [inaudible]
FOR OKAY.
SURE -- WHO'S NEXT.
I AM A SHEET HERE YEAH CORY
COULD L. UNIVERSITY WAS VERY --
SO I MAY BE TALKING ABOUT -- THE
PENSION ISSUES WITH CALIFORNIA'S
SCHOOLS THANK YOU ALL VERY MUCH
FOR HAVING ME HERE -- I PREPARED
REMARKS WILL BE NO MINDS AND
SPEND ALL MY TIME SAYING ARM.
UP TO ALL OF YOU MIGHT AT MY
BEST TO BE CONCISE IN MY REMARKS
FROM THE FOCUS ON CAL STARS
WHICH IS THE PLAN TO COVER
CERTIFIED PERSONAL THE SCHOOLS
THE THING TEACHERS.
A CLASSIFIED PERSONALS SCHOOLS
ARE COVERED BY CALPERS.
CALPERS ASSEMBLY STRUCTURE TO
CAL STAR IS A LOT OF THE SAME
ISSUES I'M GONNA TALK ABOUT
APPLY -- BUT CALPERS IS A
SMALLER COST ITEM FOR SCHOOLS.
I THINK WE ALL THE PENSION
CONTRIBUTION RATES ARE RISING
RAPIDLY IN CALIFORNIA THE RATE
INCREASES ARE LEGISLATIVE TO BE
HIGHEST FOR SCHOOL DISTRICTS IN
THE STATE.
EMPLOYEES HAVE EXPERIENCED MORE
MODEST INCREASES.
THE SPECIFICS OF THESE CHANGES
CAN BE FOUND IN MY REPORT AND
THE DETAILS ARE ARE WIDELY
AVAILABLE -- WITH THE RATE
INCREASES A BACKDROP I HAVE
THREE OBJECTIVES IN THESE BRIEF
COMMENTS FIRST I'M GONNA EXPLAIN
WHY PENSION CONTRIBUTION RATES
ARE RISING IN CALIFORNIA.
THEN I'M GONNA GIVE MY
ASSESSMENT OF THE LONG TERM
OUTLOOK FOR CAL STARS IN
PARTICULAR IN THE ABSENCE OF
SIGNIFICANT POLICY CHANGES.
AND THIRD EMPHASIZING THAT
CALIFORNIA IS NOT ALONE IN
EXPERIENCING THESE RISING
PENSION COSTS I WILL DISCUSS
POSSIBLE POLICY RESPONSES.
BASED OR OTHER STATES HAVE DONE
IN SIMILAR CIRCUMSTANCES.
SO WHY IS THIS HAPPENING.
A THE THE SHORT ANSWER IS TWO
WORDS PENSION THAT.
IT'S IMPORTANT I CAN I THINK
HOUSES BENEFITS ARE NOT
IMPROVING WITH THESE RISING
COSTS AND IN FACT NEW TEACHERS
TODAY HAVE SIGNIFICANTLY LOWER
BENEFITS AND THEN.
TEACHERS WHO ARE HIRED BEFORE
TWENTY THIRTEEN I THINK THIS
GIVE SOME CONTEXT FOR THE LABOR
UNREST IN MANY DISTRICTS.
DISTRICTS ARE BEING REQUIRED TO
PAY MORE FOR THEIR EMPLOYEES BUT
THE CURRENT EMPLOYEES ARE NOT
THE BEEFICIARIES OF THESE THESE
HIGHER COSTS.
THE PENSION THAT CAN BE TRACED
TO A VARIETY OF SOURCES BUT I
WILL FOCUS ON JUST TO THAT ARE
PARTICULARLY IMPORTANT.
THAT THERE ARE MANY LAYERS OF
THE PENSION FINANCE ON IN BUT
WHEN YOU GET RIGHT DOWN TO ONLY
A HANDFUL OF THINGS MATTER.
THE FIRST ISSUE IS THAT
CALIFORNIA'S UNDERPAID PENSION
COSTS FOR MANY YEARS.
WHAT THIS MEANS IS THAT CALTRANS
ACTUARIES CALCULATED HOW MUCH
WAS REQUIRED TO PAY FOR FOR
BENEFITS AND CONTRIBUTING
PARTISAN CALIFORNIA TEACHERS
SCHOOL DISTRICTS AND THE STATE?
I DID NOT PAY THEFULL AMOUNT
OVER THE YEARS THE UNDERPAYMENT
A PENSION COSTS HAS RESULTED IN
THE BUILD UP OF SUBSTANTIAL DEBT
THE SAME WAY OF NOT PAYING YOUR
CREDIT CARD BILL MAKE SURE.
YOU GOT THIS BIG BALANCING USED
A MORE MORE MONEY.
SECOND THERE IS A CONSENSUS
AMONG FINANCIAL ECONOMISTS BUT
THE ACTUARIAL ASSUMPTIONS AND
MOST TV PENSION PLANS INCLUDING
CAL STARS.
ARE TOO OPTIMISTIC THE MOST
IMPORTANT ASSUMPTION IS THE
ISSUE AND RATE OF RETURN ON
ASSETS.
WHICH FOR ANY PENSION ONCE IN
THE ROOM IS ALSO THE RATE OF THE
PLAN DISCOUNTS LIABILITIES.
FINANCIAL ECONOMISTS BELIEVE
THAT THE RATE USED BY CALPERS
ANOTHER SIMILAR PLANS IS TOO
HIGH WHICH MEANS THAT EVEN IF
ALL PAYMENTS ARE MADE.
THAT WILL CONTINUE TO ACCRUE.
ANY EMPIRICAL EVIDENCE IS
CONSISTENT WITH THIS VIEW AS IN
STATES WERE FULL PENSION
PAYMENTS HAVE BEEN MADE
CONSISTENTLY PUBLIC PLAN STILL
CARRY SUBSTANTIAL THAT.
CONTRIBUTION RATE THE CALIPHATE
ARISING DATA TODAY TO PAY DOWN
THE LARGE THAT THAT IS A MASS OF
THE PLAN.
WHICH IS A THE LATEST ACTUARIAL
VALUATION REPORT IS OVER A
HUNDRED BILLION DOLLARS.
THE NEXT IN A GOOD LONG TERM
OUTLOOK.
WE'RE IN THE PHASE IN PERIOD OF
HIGHER PENSION CONTRIBUTION RATE
HAS LEGISLATIVE BY ASSEMBLY BILL.
FOURTEEN SIXTY NINE IN TWENTY
FOURTEEN THE TOTAL CONTRIBUTION
RATE TO CAL STARS AS A PERCENT
OF TEACHER SALARIES WAS ABOUT
18%.
IN TWENTY TWENTY FOUR UNDER
CURRENT PROJECTIONS WHEN THE
RATES GOING TO PLATEAU IT'LL BE
AT ABOUT 38% SO.
MORE THAN DOUBLING.
GOVERNOR NEWSOME'S BUDGET
PROPOSAL WHICH I THINK YOU GUYS
ARE GONNA TALK ABOUT LATER TODAY
WE GIVE MODEST RELIEF BUT EVEN
IF PASSED IT WILL NOT MEETING
WITH THE AFFECT THE FINAL RATE.
UNDER CURRENT LAW AND ASSUMING
ALL ACTUALLY ALSO ACTUARIAL
ASSUMPTIONS HOLD WHICH I THINK
IS OPTIMISTIC THE FINEST ORACLE
EVIDENCING HOUSES AND OTHER
SIMILAR PLANS.
THE HIGHER CONTRIBUTION RATES
WILL BE REQUIRED THROUGH.
TWENTY FORTY SIX AT WHICH POINT
THE FALL BY ABOUT HALF BECAUSE
THE DEBT WILL BE PAID DOWN.
IF THE ACTUARIAL PROJECTIONS ARE
TOO OPTIMISTIC THERE ONLY TWO
OPTIONS CONTRIBUTION RATES ARE
GONNA HAVE TO GO HIGHER.
OR THE TWENTY FORTY SIX AND
POINT IS GOING TO BE EXTENDED.
WHAT'S YOUR VIEW ON THE WORLD WE
ADOPTED THE THE GET WELL PLAN.
THAT HAS A TWENTY FORTY SIX
DATED AS I RECALL THAT'S
CRACKERS AGO WHAT'S YOUR VIEW ON
THAT PLAN I MEAN I GUESS YOUR
POINT IS THAT IF THE ACTUARIAL
ASSUMPTIONS ARE CORRECT IT'S
GOING TO BLOW UP AND IT ACTUAL
OUR ASSUMPTIONS ARE CORRECT IN
THE CURRENT CONTRIBUTION RATES
WHICH YOU.
KNOW IS A BIG REASON OR HOW
WE'RE TALKING ABOUT THESE
PENSION PLANS RIGHT NOW -- ARE
NATURALLY HIGHER.
AND IF IF THE ACTUARIAL
ASSUMPTIONS TEND TO BE.
IN LINE BY TWENTY FOUR FORTY SIX
WE SHOULD HAVE THE PLAN THE
UNFUNDED LIABILITY.
REDUCED OR ELIMINATED AT LEAST
AS TO THOSE BENEFITS THAT
ACCRUED UP TO TWENTY THIRTEEN OR
FOURTEEN YES I IN PRINCIPLE IF
THEY IF ACTUALLY ASSUMPTIONS ARE
CORRECT BY TWENTY FORTY SIX
THINGS WILL BE WILL BE FINE.
THAT THE THE CONTRIBUTION RATE
THE PLAN I'LL BE AROUND 20%
TOTAL WHICH I THINK IS QUITE
MANAGEABLE.
A DOMINGUEZ SHOVE TRUCKS ARE
FACT THAT'S NOT THAT'S GOOD
CLARIFICATION.
AND SO THAT'S MORE ABOUT LESS
MORE LIKE WITH THE RATE WAS
BEFORE THIS BIG COST INCREASES
IN.
TWENTY FOURTEEN OKAY SO ON IN
THE LAST THING ON TALK ABOUT
BRIEFLY IS POSSIBILITY SHOULD
CALIFORNIA WISH TO INITIATE THE
POLICY RESPONSE.
FIRST MENTIONED PREVIOUSLY
CALIFORNIA'S NOT ALONEIN FACING
SUBSTANTIAL PENSION THAT THE
TEACHERS PLAN.
IN A RECENT ECONOMIC ARTICLE
MYSELF IN A TEAM A TEAM OF
RESEARCHERS FOUND THAT ON
AVERAGE ACROSS STATE PLANS IN
THE U. S. -- AS A TWENTY
THIRTEEN ABOUT 10% OF TEACHER
SALARIES WERE BEING USED TO PAY
DOWN PENSION THAT NUMBER IN
CALIFORNIA COURT CALIFORNIA
RIGHT OUTSIDE 18%.
THIS IS THE ANNUAL DEBT
SERVICING COST.
DIRECTLY.
FOR THEY WOULD BE PAID 80% THAT
ARE MORE IF THEY DIDN'T HAVE
SAID THAT I THINK IS A BELIEVE
THERE'S PROBABLY NOT ACCURATE IN
PRINCIPLE YOU COULD TRY TO DO
THAT BUT IT'S AYE.
IT'S UNCLEAR WHAT THE PAST THERE
WOULD BE SO EIGHT CURRENTLY
THERE IS 80% YOU MEAN THAT
THEY'RE TAKING THAT OUT OF THEIR
SALARIES THAT IT THAT THAT'S THE
PRICE OF THE DEBT THAT'S THE
PRICE OF A DEAD AS A THAT THAT
IS A PERCENT OF TEACHER SALARIES
WHOSE.
ACTUALLY PAYING.
IS NOT CLEAR SO YOU THINK THE
THINK THE DISTRICTS MIGHT NOT BE
ABLE TO GET THE PAY RAISE THEY
WANT TO GET BECAUSE OF THIS.
BUT MAYBE THEY ARE GETTING ALL
THE PAY RAISES THEY CAN JUST
PULL REVENUE THEY CAN COLLECT
MORE TAXES OR YOU KNOW THERE'S
LOTS OF OUR WAY TO PAY FOR THIS
BUT THE PRICE.
OKAY AS A PERCENT OF TEACHERS
SALARIES 18% JUST TO BE CLEAR
THANK YOU FOR THAT CLARIFICATION.
OUR OUR ANALYSIS SHOWS THAT.
PROJECTED CONTRIBUTION RATES --
FOR CAL STIRS IN NINETEEN TWENTY
FOUR EMPLOYEES PRE PREPARA. TEN
POINT 3% OF THAT WITH YOU WERE
ASKING. ZERO YEAH I WAY WHEN HE
SAID THAT IT'S EIGHTEEN I WAS
JUST TRYING TO GET A PERMIT FROM
AN ECONOMIC PERSONALIZING THE
DIRECT COST OF THE EMPLOYEES IS
10% FROM AN EONOMIC PERSPECTIVE.
OF THIS WHOLE THING IT'S UNCLEAR
WHO PAYS WHEN THE DISTRICT HAS A
HIGHER RATE THE MIGHT HEY IT BY
NOT GETTING TEACHERS RAISES HI
LYNN TEACHERS PAID BUT IT BUT IT
IT.
THEY COULD SPEND ON ALL SORTS OF
THINGS YEP BUT EXPLAIN ALL HER
THINGS OR THEY COULD JUST RAISE
TAXES THE SYSTEM COULD GIVE IT
ALL OF THE COUNTY OFFICES I MEAN
YEAH I YEAH IT IS UNCLEAR ALL
THE MONEY GOES RIGHT THAT'S THE
PRICE I USUALLY POINT YEAH.
THANK YOU -- OKAY SO YOU'RE KEY
POINT IS THAT WERE WE HAVE A
MUCH HIGHER LIABILITY.
THAT'S TAKING UP MORE OF OUR
EDUCATION FUNDING THAN IN THAT
MOST STATES.
YES BUT DIDN'T NEARLY TELL YOUR
I. I DID JUMP TIME TOO SO IT'S
GETTING WORSE EVERYWHERE SO THE
NOT THE 10% FIGURE I GAVE FOR
THE NATION WAS AS A TWENTY
THIRTEEN THE NUMBER I GAVE FOR
CALIFORNIA'S THE MOST RECENT
OVER CALIFORNIA IS A HAS A
LITTLE BIT OF A HIGHER.
COST THAT COST THEN THEN AVERAGE
BUT NOT AS BIG AS THAT GAP IN
PLACE IT IS A FOR THE SAME.
GENERAL BENEFIT 2% PER YEAR OF
SERVICES THAT THEY THAT WELL AS
YESTERDAY BENEFITS CAN BE TRICKY
TO PAY IT'S IT'S THE 22% IS ALSO
WHEN YOU CAN COLLECT.
AND AND ALL THOSE KINDS OF
THINGS CALIFORNIA HAS A MORE
GENEROUS THAN AVERAGE PENSION-PLAN.
BUT THAT'S PARTLY BECAUSE
TEACHERS ARE ON SOCIAL SECURITY.
CALIFORNIA'S PLAN IS QUITE
TYPICAL OF OF THE BENEFIT LEVEL
OF PLANS AND OTHER STATES WHERE
TEACHERS ARE NOT AND SOCIAL
SECURITY RIGHT -- OKAY SO A
NUMBER OF STATE TO PURSUE
STRUCTURAL FORMS TO THEIR FUTURE
PENSION PLANS RESPONSE TO RISING
COSTS OF MY DAD.
I REPORT GIVES MANY EXAMPLES OF
THESE I'M NOT GONNA WIN THE
DETAILS BUT THE COMMON THEME OF
ALL SUCH REFORMS AS THAT THEY
HAVE DE EMPHASIZE THE DEFINED
BENEFIT PENSION STRUCTURE.
WHICH IS MOST COMMON STRUCTURE
PUBLIC CAN'T PLAY PENSION PLANS
NATIONALLY IN THE STRUCTURE OF
CASTERS.
MOST A TO REFORM THEIR PLANS BY
BLENDING DEFINED BENEFIT AND
DEFINED CONTRIBUTION PLANS. FOR
EXAMPLE SOME STATES NOW OFFER
HYBRID PLANS TO COMBINE BOTH
TYPES.
AND OTHERS GIVE TEACHERS A
CHOICE BETWEEN PLANS DUE TO TIME
CONSTRAINTS ON I CAN EXPLAIN HOW
THIS TYPE OF PLAN WORKS.
BUT I WILL SAY THAT THE IMPETUS
FOR THE SHIP TO THAT THE
STRUCTURE OF DEFINED
CONTRIBUTION PLANS IS THAT THEY
PREVENT DATA COOL.
AS I'VE ALREADY EXPLAINED THAT
ACROSS TYPICAL DEFINED BENEFIT
PLANS AS THEY'VE BEEN
IMPLEMENTED IN PRACTICE.
AND THEN FINALLY RESURGENT
STATES HAVE ADOPTED HYBRID
CHOICE PLANS FIND THAT THERE IS
STRONG DEMAND AMONG TEACHERS FOR
BOTH TYPES OF RETIREMENT
BENEFITS STRUCTURES.
SO THAT CONCLUDES MY PREPARED
REMARKS THINK FICTIONAL.
SO I'M PAUL WARNER I'M NEXT ARM
THEM WITH PUBLIC POLICY
INSTITUTE CALIFORNIA I'M GONNA
TALK ABOUT SPECIAL EDUCATION
[inaudible]
N..
YES THE FOR SOME HELP TO
UNDERSTAND WHY SPECIAL EDUCATION
COSTS HAVE INCREASED -- SO
QUICKLY.
SO FIRST SOME BACKGROUND -- THE
AB SIX OH TWO FORMULAS WHAT
GUIDES -- STATE FUNDING FOR
SPECIAL ED TO DISTRICTS.
ARE ON AVERAGE.
SB SIX OR TO PROVIDE ABOUT
BETWEEN FIVE AND SIX HUNDRED
DOLLARS A STUDENT TO DISTRICTS.
WHEN I SAY A STUDENT THAT'S
BASED ON?
THE ENTIRE DISTRICT EDA.
SO IF JUST VERY ROUGHLY OF 10%
OF STUDENTS ARE SPECIAL THEN.
THEN FOR EACH SPECIAL ED STUDENT
DISTRICTS GET ROUGHLY FIVE TO
SIX THOUSAND DOLLARS -- IN STATE
FUNDING EVERY YEAR -- SO.
AND THEN EVERY YEAR THE STATE
BUDGET UPDATES THOSE FIGURES FOR
OF YOUR COST OF LIVING
ADJUSTMENT.
AND FOR GOOD AND THE CHANGE IN A
DA.
I SHOULD NOTE.
THIS FORMULA'S BEEN AROUND FOR
ABOUT TWENTY YEARS.
AND WHAT DOESN'T CHANGE IN THE
FORMULA IS CHANGES IN DISTRICT
COST STRUCTURES FOR SPECIAL
EDUCATION.
AND THAT'S REALLY A LOT OF
WHAT'S GOING ON IN.
DISTRICTS NOW THAT'S CAUSING
FINANCIAL STRESS IN THAT PROGRAM
M. WE'VE IDENTIFIED THREE REAL
SPECIFIC FACTORS.
FIRST HAVE BEEN CHANGES IN THE
RATE OF STUDENTS IDENTIFIED WITH
DISABILITIES.
AND AND THE TYPE OF DISABILITIES --
IN OUR RODENT TWO THOUSAND
SIXTEEN REPORT.
ON SPECIAL EDUCATION FINANCE WE
ESTIMATED THAT OVER TEN YEAR
PERIOD ENDING IN.
I THINK WAS FIFTEEN SIXTEEN
SPECIAL EDUCATION COSTS WENT UP
ON THE ABOUT A BILLION DOLLARS A
LITTLE MORE -- JUST BECAUSE OF
pEDUCATION STUDENTS AND MORE
IMPORTANTLY THE TYPE OF SPECIAL
EDUCATION STUDENTS THAT WERE
BEING SERVED.
AUTISM HAS.
REALLY INCREASED A LOT IN OUR
STATE AND AND THEIR THAT
DISABILITIES EXPENSIVE ON
AVERAGE -- TO TO ADDRESS AND SO
THOSE TWO FACTORS.
IS ONE BIG REASON WHY SPECIAL
EDUCATION IS MORE EXPENSIVE
TODAY.
AGAIN THE FORMULA DIDN'T ADJUST
TO THE CHANGES IN THE TYPE OF
KIDS -- OR IN THE NUMBER OF OF
SPECIAL EDUCATION STUDENTS.
ALSO THE GROWTH IN THE PRESCHOOL
SPECIAL EDUCATION POPULATION
PRESCHOOLS IS REQUIRED UNDER
FEDERAL LAW.
AND THE THE NUMBER OF SPECIAL
EDUCATION STUDENTS.
UNDER AGE FIVE INCREASED --
ABOUT 10% DURING THAT PERIOD.
WELL -- SINCE SINCE PRESCHOOL
STUDENTS DON'T COUNT AS A AS A
K. TWELVE STUDENT.
OF THE FORMULA DID NOT ADJUST
FOR THAT INCREASE SO THAT'S
ANOTHER FACTOR.
THE THIRD FACTOR IS IS -- TO
COMES OUT OF THE FACT THIS
SPECIAL EDUCATION ELSE IF OF
HAVE BEEN TREATED QUITE
DIFFERENTLY SINCE THE CREATION
OF BILLS HERE FOR A LOT OF NEW
MONEY OR OR RESTORATION OF MONEY
WAS PUT INTO ELSE IF OF OVERTIME.
TO TO FULLY FUND THAT FORMULA
AND SPECIAL EDUCATION DIDN'T GET
COMMENSURATE INCREASES SO --
SERVER WAS DRIVING THE SALARY
DISCUSSION IN MOST DISTRICTS --
AND SO.
YOU KNOW -- TEACHERS AND OTHER
EMPLOYEES GOT THE THE THE
INCREASES THAT THEY BARGAINED.
FOR AND AND SPECIAL EDUCATION
WAS OF COURSE INCLUDED IN THAT
RIGHT BUT BY SPECIAL EDUCATION
BUDGETS NO THE STATE FUNDING
DIDN'T GO UP.
COMMENSURATELY WITH WHAT WAS
HAPPENING YOU KNOW CFS SO
DISTRICTS WERE FORCED TO SPEND
MORE OF THEIR GENERAL PURPOSE
MONEY RIGHT ON SPECIAL EDUCATION
AND TO PAY FOR THAT.
SO THOSE ARE THREE OF THE MAIN
FACTORS THAT WE SEE OUT THERE --
YOU KNOW PUSHING A SPECIAL
EDUCATION COSTS HIGHER
[inaudible]
SO.
WE PUT OUT A SECOND REPORT IN
TWO THOUSAND EIGHTEEN AS PART OF
GETTING DONE FAX.
THAT RE EXAMINE SOME OF THESE
COULD ISSUES AND WE CAME UP WITH
A COUPLE OF OPTIONS THAT.
FOR LEGISLATURE'S CONSIDERATION
IN HOW WOULD YOU DEAL WITH
SPECIAL YOU KNOW WITH MAKING
SPECIAL EDUCATION MORE
RESPONSIVE OVER TIME
[inaudible]
AND WE THINK YOU COULD EITHER --
ONE INCREASED FUNDING FOR FOR
SPECIAL EDUCATION AT THE SAME
RATE AS YOU DO FOR US IF I HAVE
SO THAT THERE ISN'T THIS FUNNY
DISEQUILIBRIUM BETWEEN THE TWO
PROGRAMS.
THAT CAUSES DISTRICT STAFF TO
SPEND MORE OUT OF THEIR OF
SPECIAL I I'D OF THE GENERAL
PURPOSE FUNDS.
OR YOU COULD JUST SAY YOU KNOW
WHAT WHAT WE WANNA DO IS HAVE
THE STATE SHARE OF SPECIAL
EDUCATION COSTS BECAUSE TEN OVER
TIME.
AND YOU COULD DO THAT BY SAYING
WELL WE'LL GO BACK TO THE MOST
RECENT YEAR WE HAVE ACCOUNTING
DATA ACTUALLY LOOK AT WHAT.
WAS PENT ON SPECIAL LED BY
DISTRICTS AN INCREASE THE
STATE'S SHARE OF ACCORDINGLY AT
AS IN FUTURE BUDGETS
[inaudible]
SO.
WE RECOMMEND CAUTION ABOUT GOING
OF BASING FUNDING ON THE COUNT
OF SPECIAL ED STUDENTS.
WE LOOKED AT THE INCIDENCE OF
SPECIALIZED IN DIFFERENT PARTS
OF THE CUT OF THE STATE AND
THEIR SURPRISING VARIATION IN
THE PERCENT OF KIDS WHO ARE IN
SPECIAL ED.
WEFOUND ONE COUNTY THAT ISSUE
IS JUST ABOUT A 9% OF KIDS IN
SPECIAL ED.
AND ANOTHER COUNTY THE HEAD OVER
17% OF STUDENTS IN SPECIAL
EDUCATION IS THAT THE ISSUE OF
EQUALIZATION OF FUNDING THAT WE
HEAR ABOUT HERE NO.
THAT'S AN IMPORTANT ISSUE BUT
MAYBE TOUCH OR ARE YOU ABLE TO
TOUCH ON THAT AT SOME POINT SURE
THAT WAS IN.
A REPORT -- THERE'S A A LARGE --
THIS IS JUST A HISTORICAL KIND
OF FACTOR THAT IS TYPICAL IN
STATE.
YOU KNOW FINDING PROGRAMS WHERE --
SOME CHANGES WERE MADE AND IT
THIS EQUALIZED -- THE WHAT
DISTRICTS GET IN IN TERMS OF
STATE FUNDING WE DID SPEND.
QUITE A BIT OF MONEY IN THE
EARLY TWO THOUSANDS TRYING.
TO DO SOME OF THAT EQUALIZATION
pHIT -- THOSE KIND EFFORTS HAD TO
STOP.
IN THERE ARE PRETTY BIG
DIFFERENCES IN IN DISTRICT
FUNDING -- WE HAD RECOMMENDED --
IN ONE OF OUR REPORTS THAT.
YOU COULD EQUALIZE UP TO I THINK
IS THE 95% -- YOU KNOW YOU CAN
YOU CAN MAKE ALMOST ALL
DISTRICTS.
BE FUNDED AT THE SAME LEVEL --
BUT IT TAKES -- IT TAKES SOME
REAL MONIES -- ONE STATES IN THE
SEVERAL HUNDRED MLLION DOLLAR
RANGE AND I WAS TRYING TO
UNDERSTAND THE TO THE THE CAUSE
OF THE EQUALIZATION ISSUE IS AT
THE POPULATION SHIFT STUDENT
POPULATION SHIFT INCREASES IN
SCHOOL POPULATION -- ITS IT'S
IT'S MORE -- WHO IS IN CONTROL
AT THE TIME?
WELL SO.
WHAT WAS HAPPENING IS IN THE TWO
THOUSANDS THE -- THE FEDERAL
GOVERNMENT WAS PUTTING MORE
MONEY INTO SPECIAL EDUCATION TO
TRY TO LIVE UP CERTAIN PERCENT
OF COSTS AT THE LOCAL LEVEL.
OUR MODEL BACK THEN WAS A
BLENDED MODEL OF BOTH FEDERAL
AND STATE SPENDING AND WE
PROVIDED WE GUARANTEED A CERTAIN
AMOUNT FOR DISTRICTS.
SO THAT MEANT THAT WHAT WE'RE
ACTUALLY DOING IS TAKING SOME OF
THE FEDERAL FUNDS.
IT WAS THAT WAS GOING UP FAST
AND WE'RE BACKING OUT STAE FUND.
AND THE FEDERAL GOVERNMENT MAY
BE UNDERSTANDABLY WASN'T VERY
HAPPY AT THAT AND SO THEY PASSED
A LAW SAYING YOU COULDN'T DO
THAT.
SO WE HAD TO REALLY.
SEPARATE THE TWO SYSTEMS AND
WHEN WE DID THAT THEN YOU KNOW
THE STATE FUNDING WHICH HAD BEEN
JUST REALLY -- YOU KNOW BASED IN
PART ON THE FEDERAL FUNDING THAT
THERE'S JUST ALL NO LOGIC TO THE
STATE LEVELS ANYMORE RIGHT.
BECAUSE WE THE THE TWO PIECES
WERE WERE VERY CONSISTENT WENT
YOU ADDED THEM TOGETHER BUT THE
FEDERAL MOUNTS WITH COULD BE
QUITE DIFFERENT IS BASED ON A
DIFFERENT FORMULA AND THEN STATE
FORMULA.
SO IT'S JUST AN ARTIFACT OF THIS
FUNNY TENSION BETWEEN THE STATE
AND THE FEDERAL GOVERNMENT
[inaudible]
AND SO THERE WAS SOME SCHOOLS
FOR I GUESS THAT WOULD GET.
THE FULL STATE MONEY AND THEN
THE FEDERAL MONEY ON TOP BECAUSE
THERE WAS NO OFFSET [inaudible]
AND HENCE.
UNEQUAL FUNDING AROUND THE STATE
THAT'S RIGHT YES.
THE BALANCING WENT AWAY YES YES
THAT'S RIGHT.
MY SIMPLISTIC WAY OF THANK YOU
FOR TOUCHING ON THE SHIP.
SO THAT'S REALLY -- YOU KNOW
WHAT I CAME SAID TODAY HAPPY TO
ANSWER ANY QUESTIONS PERFECT --
ONLY QUESTIONS OR WAY OUR SURE.
THANKS YES UP AUBURN A
UNIVERSITY OF SOUTHERN
CALIFORNIA I WAS ASKED TO COME
HERE TODAY TO TALK A LITTLE BIT
ABOUT HEALTH AND WELFARE
BENEFITS.
IN DISTRICTS -- ALSO REPORT AS
PART OF THE GETTING DOWN TO FAX
PROJECT I'VE TRIED UPDATE THAT A
LITTLE BIT WITH SOME OF THE MORE
RECENT DATA FROM TWENTY
SEVENTEEN EIGHTEEN SCHOOL YEAR --
AS HAS BEEN TOUCHED ON A LITTLE
ALREADY TODAY MOST DISTRICTS IN
CALIFORNIA OFFER REALLY TWO
TYPES OF HEALTH AND WELFARE
BENEFITS THERE'S THOSE BENEFITS
FOR ACTIVE EMPLOYEES MEDICAL AND
DENTAL AND THEN THERE'S THE
CONTINUING BENEFITS.
VOTERS ENTITLED -- PADS FOR THE
RETIRED EMPLOYEES WHO CONTINUE
TO RECEIVE THESE BENEFITS AND
THE CONCERN FOR A LOT OF
DISTRICTS IS THAT.
THE COST OF THESE BENEFITS OF
INCREASED AT A MUCH FASTER RATE
THAN THEIR REVENUES EXPENDITURES
AS A WHOLE SO FROM SINCE TWO
THOUSAND FOUR FOR EXAMPLE JUST
TO GIVE YOU A SENSE OF LIKE
TOTAL PER PUPIL SPENDING IN THE
STATE IS UP BY ABOUT 18%.
AFTER ADJUSTING FOR INFLATION
BUT IT'S UP ABOUT 39% ON HEALTH
AND WELFARE BENEFITS FOR ACTIVE
EMPLOYEES ABOUT 85% FOR THESE --
PERHAPS ON A PER PUPIL BASIS SO
INCREASING TWO TO FOUR TIMES
FASTER THAN SPENDING AS A WHOLE
IS UP BY 85% YES RIGHT NOW OPENS
AS OUR SMALL PART OF DISTRICT
BUDGETS BUT THEY'RE INCREASING
AT A MUCH FASTER RATE -- THAN --
THAN A TEN SPENDING AS A WHOLE
AND SUPPORT WHAT THAT MEANS IS
THAT THESE SPENDING ON THESE
BENEFITS INCLUDE IT IS A LARGER
PART OF DISTRICT BUDGETS NOW
THAN IT USED TO BE SO NOW
DISTRICTS OF ALL OF ALL SPENDING
ABOUT EIGHT AND A HALF PERCENT
IS ON THE HEALTH.
AND WELFARE BENEFITS FOR ACTIVE
EMPLOYEES AND RETIREES THAT'S UP
FROM ABOUT 7% FIFTEEN YEARS AGO.
AND THIS IS REALLY FOR TWO MAIN
REASONS ONE IS THAT DISTRICTS IN
PLACE SLIGHTLY MORE STAFF PER
STUDENT THAN THEY USED TO SO
THAT INCREASES BENEFIT COST TO
SOME EXTENT.
A SOMEWHAT LARGER ISSUE IS THAT
THE PER STAFF COST OF THESE
BENEFITS AS INCREASED.
MORE RAPIDLY AS IT HAS FOR MANY
TYPES OF AMERICAN WORKERS OF
JUST AS AN EXAMPLE OF THE
AVERAGE COST OF HEALTH BENEFITS
PER TEACHER IS ABOUT 34% HIGHER
NOW THAN IT WAS AND IN.
TWO THOUSAND FOUR AND IT'S
PARTICULARLY DIFFICULT FOR
SCHOOL DISTRICTS BECAUSE THEY'RE
OFTEN PAYING A LARGER SHARE.
OF THE EMPLOYEE BENEFIT COST
THEY OFTEN PLANT PAY ALMOST ALL
OF THE BENEFIT COST FOR THE
EMPLOYEES EMPLOYEES ARE MAKING A
CONTRIBUTION -- WHICH MEANS THAT
THE DISTRICT IS OFTEN
SHOULDERING THE FULL COST OF
THIS THIS THIS AND THIS COST
GROWTH -- THAT'S CONFERS
CONCERNING FOR SOME OF THE
OBVIOUS REASONS FOR DISTRICTS IT
PREVENTS THEM FROM INVESTING IN
SOME OTHER OTHER PRIORITIES LIKE
SERVICES FRIEND DUPLICATED
PEOPLE'S UNDER LC FF FOR
NAVIGATING THESE THESE PENSION
CONTRIBUTIONS OF TEACHER SALARY
INCREASES AND ADDITIONAL CONCERN
IS THAT THESE KINDS OF COSTS FOR
HEALTH AND WELFARE.
BENEFITS WILL TEND TO INCREASE --
EVEN IF DISTRICT REVENUES DON'T
SO WE'VE ANNA SO I THINK IN
RECENT YEARS THERE'S BEEN A
GROWTH AND REVENUE AND DISTRICTS
THIS IS MAYBE STEPS GEARED
SOMEWHAT SOME OF THIS COST
GROWTH IN HEALTH AND WELFARE
BENEFITS BUT THERE'S NO
GUARANTEE THAT DISTRICT REVENUES
WILL CONTINUE GROWING IN THE
FUTURE.
PARTICULARLY IF THE STATE
ECONOMY DETERIORATES TO SOME
EXTENT THESE THESE KINDS OF
COSTS WILL TEND TO GROW ANYWAY.
AND THEN AS HAS BEEN MENTIONED A
LITTLE BIT EARLIER THERE THESE
RETIREE BENEFITS THESE -- PADS
THEY REPRESENT SORT OF A
SEPARATE CHALLENGE FOR DISTRICTS --
AS I THINK WAS MENTIONED I THINK
THE STATEWIDE UNFUNDED
LIABILITIES FOR THESE BENEFITS
HEALTH AND WELFARE BENEFITS THAT
HAVE BEEN PROMISED TO RETIREES
IS IN THE TWENTY FIVE BILLION
DOLLAR RANGE.
THAT'S PARTICULARLY AN ISSUE FOR
A RELATIVELY SMALL NUMBER OF
DISTRICTS MAYBE TEN TO FIFTEEN
DISTRICTS.
THAT HAVE VERY LARGE UNFUNDED
LIABILITIES AMOUNTING TO SEVERAL
THOUSAND DOLLARS PER PEOPLE.
AND THOUGH THIS DOES DISTRICTS
THAT TEND THAT WE TALKED ABOUT
EARLIER THAT TEND TO HAVE.
MUCH MORE GENEROUS SO BAD.
I YES THAT'S CORRECT OKAY AND
AND TO HAVE NOT -- PRE FUNDED
THEM SAYS ME AS AND TALK ABOUT A
LITTLE BIT.
OKAY SO S. AS IN THE MIX IS A
LITTLE COMPLICATED IS THAT A BY
LAW DISTRICTS ARE NEGOTIATING
THESE BENEFITS PACKAGES WITH
THEIR EMPLOYEES BOTH ACTIVE
EMPLOYEES AND FOR THEIR RETIREES
SO THERE'S A LOT OF VARIATION SO
IT'S HARD TO TALK IN VERY
GENERAL TERMS ABOUT SORT OF WHAT.
THE CHALLENGES FOR DISTRICTS ARE
WHAT THE PATH FORWARD MIGHT BE
BUT SOME OF THE THINGS THAT YOU
SEE IS THAT -- DISTRICTS ONE OF
THE WAYS FOR EXAMPLE DISTRICTS
CAN SAVE ON THEIR BENEFIT COSTS
FOR ACTIVE EMPLOYEES IS BY --
FOUR ONE REQUIRING EMPLOYEES TO
PLAY LOWER PAY A LARGER SHARE OF
AND THESE BENEFIT PLANS WHILE
THEY'RE WORKING SO ONE OF THE
THINGS YOU SEE THERE'S SOME
EVIDENCE FROM OTHER STATES FOR
EXAMPLE THAT.
WHEN TEACHERS ARE PAYING A
LARGER SHARE OF THEIR BENEFIT
COSTS?
THE DISTRICTS SAVE MONEY NOT
JUST BECAUSE THE THE TEACHERS
ARE PAYING SOME OF THOSE COSTS
DIRECTLY BUT BECAUSE THE
TEACHERS ARE OPTING TO BUY SO
MUCH CHEAPER PLANS -- FOR
EXAMPLE WHICH MEANS THE MIGHT BE
BOTH SAVE MONEY FOR DISTRICTS
AND POTENTIALLY BE MORE
EFFICIENT UNDER THAT DEPENDS A
LITTLE BIT ON WHAT DISTRICTS DO
WITH SOME OF THE MONEY THAT THEY
THEY SAVE -- THERE'S ALSO YOU
SEE SOME EVIDENCE THAT DISTRICTS
ARE DOING SOME OF THAT SORT OF
PULLING BACK A LITTLE BIT ON
WHAT THEY OFFER.
IN TERMS OF THEIR BENEFITS
PACKAGES THIS ALSO APPEARS TO BE
TRUE TO SOME EXTENT OF THESE --
PET PACKAGES THAT THEY OFFER SO
SINCE TWENTY TWELVE WHICH IS AS
FAR BACK AS I CAN GO YOU DO SEE
FEWER DISTRICTS TODAY THEY'RE
OFFERING THESE RETIREE HEALTH
BENEFITS FOR LIFE.
OR TO RETIREES OVER AGE SIXTY
FIVE OR EVEN TO RETIREES AT ALL
AND THE PROGRAMS THEY DO OFFER
THESE BENEFITS OFFER THEM -- FOR
THEY TEND TO EXPIRE AT SLIGHTLY
YOUNGER AGES ARE AFTER A SMALLER
NUMBER OF YEARS WHETHER AT LEAST
PHASING THESE REQUIREMENTS IN
FOR NEW TEACHERS SO ONE OF THE
THINGS THAT CAN MAKE NAVIGATING
THESE.
LARGE LIABILITIES DIFFICULT IS
THAT THEY'VE OFTEN BEEN
ACCUMULATED OVER MANY MANY YEARS
AND IT'S DIFFICULT NOW TO COME
IN AND CHANGE CHANGE THE BENEFIT
PACKAGE THAT YOU'RE THE OFFERING
TO TEACHERS THAT YOU PROMISED
THEM MAYBE THIRTY YEARS AGO.
AS THEY STARTED WORKING LIKE
STEP THAT.
MEAN I CAN SEE HOW.
NO ACTIVE EMPLOYEES NEED HEALTH
INSURANCE IN THIS PROBLEM WITH
RAPIDLY ESCALATING PREMIUMS. FOR
FOR HEALTH INSURANCE IS A
PROBLEM THAT ALL EMPLOYERS AND
EMPLOYEES SHARE AND AND IT'S
JUST ONE THAT WE'RE GOING TO
HAVE TO GRAPPLE WITH.
ON SORT OF A LARGE SCALE NOT
JUST INSIDE THE CONFINES OF THE
SCHOOL DISTRICT I THINK IT'S
ANOTHER ISSUE WHEN YOU TALK
ABOUT POST EMPLOYMENT HEALTH
BENEFITS FOR THOSE WHO ARE
ELIGIBLE FOR FOR ANOTHER.
HEALTH PLAN PERHAPS THE
GOVERNMENT HEALTH PLAN -- FOR
WHICH A DISTRICT PROVIDED A PLAN
COULD BE A SUPPLEMENT WHERE THE
PREMIUM IS DRAMATICALLY LOWER
BECAUSE OF THE OF THE INSTANCE
OF USING UTILIZATION OF THE
SUPPLEMENT SO.
I MEAN THERE REALLY.
TO SIGNIFICANTLY DIFFERENT
ISSUES ARE THERE YES EXACTLY
RIGHT THAT THAT ACTIVE EMPLOYEES
KNOW TYRESE ARE SEPARATE ISSUES
I THINK EVEN WITH ENDING ABOUT
THESE RETIREE BENEFITS THEY'RE
SORT OF TWO DISTINCT ISSUES OF
SORT OF MANY DISTRICTS HAVE
ALREADY ACCUMULATED THESE LARGE
UNFUNDED LIBRARIES AND MAYBE
RENEGOTIATING AS BENEFIT
PACKAGES.
GOING FORWARD IS NOT NECESSARILY.
GOING TO HELP WITH THOSE LARGE
UNFUNDED LIABILITIES AND FOR
EXAMPLE IS ALSO THINGS THAT
DISTRICTS CAN BE DOING GOING
FORWARD THINGS LIKE DOING
ADDITIONAL PRE FUNDING SO
DISTRICTS IN MANY CASES.
ARE NOT DO NOT SET ASIDE MONEY
FOR THEIR ACTIVE EMPLOYEES TO
PAY FOR THEIR RETIREE BENEFITS
LATER YOU DO SEE A GROW
DISTRICTS DURING THIS
INCREASINGLY PRE FUNDING THESE
BENEFITS.
THAT HAS THE ADVANTAGE OF A OF
AVOIDING THESE LARGE UNFUNDED
LIABILITIES ACCUMULATING IT ALSO
SAVES MONEY IN THE LONG TERM
BECAUSE IF YOU SET ASIDE THE
MONEY IN A TRUST AS YOUR OFTEN A
COUPLE REQUIRED TO DO UNDER SOME
NEW ACCOUNTING STANDARDS -- YOU
CAN ACCUMULATE INTEREST ON THOSE
INVESTMENTS THAT YOU CAN THEN
USE TO PAY FOR A PORTION OF THE
BENEFITS LATER SO BUT AGAIN
THAT'S AN ISSUE GOING FORWARD
AND DOESN'T NECESSARILY SOLVE
THE PROBLEM THAT YOU'VE YOU'VE
PROMISED A LOT OF BENEFITS
ALREADY THAT.
THAT MIGHT NOT YOU MIGHT NOT
HAVE MONEY TO PAY.
FOR THE ON THE OTHER LASTING I'D
SAY FROM SORT OF A A STATE
PERSPECTIVE AGAIN IT IS A
FUNDING STATUS THINKING ABOUT
ENGAGING WITH AT THE STATE LEVEL
IS THERE SOME THINGS THAT STATE
DO TO ADJUST -- FUNDING FORMULAS
TO TAKE INTO ACCOUNT THE FACT
THAT -- WITH SOURCE ENTITLED
GEOGRAPHIC COST TO JUST MONTH
ACCOUNT FOR THE FACT THAT -- A
WORKERS IN DIFFERENT AREAS --
OFTEN TO SORT OF COMMAND HIGHER
SALARIES ARE HIGHER LEVELS OF
COMPENSATION THIS MIGHT BE
PARTICULAR TO IN A PLACE LIKE
CALIFORNIA WHERE THERE'S JUST A
TREMENDOUS VARIATION FROM PLACE
TO PLACE IN TERMS OF SORT OF
WHAT A COLLEGE GRADUATE LIKE A
TEACHER MIGHT EXPECT TO EARN IN
THE JOB. FIFTY THOUSAND DOLLARS
FOR EXAMPLELIKE A VERY
DIFFERENT KIND OF WORKER AND ONE
PART OF THE STATE AND ANOTHER IN
SOME STATES TO MAKE THESE SORTS
OF COST ADJUSTMENTS.
OF MANY OF THE DISTRICTS THAT WE
SEE WITH THE HIGHEST HEALTH AND
WELFARE BENEFIT COSTS OR THE
LARGEST -- PEBBLE LIABILITIES
ARE OFTEN IN JEEP PARTS OF
CALIFORNIA WHERE -- COLLEGE
GRADUATES EARN HIGHER WAGES ON
AVERAGE -- AND SO THOSE KINDS OF
ADJUSTMENTS BUT TEND TO BENEFIT
THESE DISTRICTS ON AVERAGE.
AND GO BUT IT JUST IN THE
FUNDING FORMULA FROM THE STATE
TO THE DISTRICT YEAH SO IT
THERE'D AND THE YEAH SO THERE'S
A THE THE STATE FUNDING FORMULA
TO SOME TYPE OF ADJUSTMENTS
ALREADY FOR THINGS LIKE SMALL
DISTRICTS AND MAKE SOME
ADJUSTMENTS OVER TIME SOMETHING
YOU DO SEE.
SOME STATES LOOKING INTO AND
STARTING TO TO IMPLEMENTED ALSO
GEOGRAPHIC DIFFERENCES IN THIS
SORT OF THINKING ABOUT HOW
DIFFERENT -- DIFFERENT KINDS OF
COSTS ARE DIFFERENT IN DIFFERENT
PARTS OF THE STATE FACTORING
THAT IN -- IF IT MIGHT BE THAT
SOME OF THESE DISTRICTS ALSO
JUST NEED TO BE OFFERING MORE
GENEROUS BENEFITS ANYWAY JUST
BASED ON WHERE THEY ARE AND THAT
THE STATE WHICH IS AN EASIER
DECISION TO MAKE IF THERE'S
ENOUGH MONEY IN THE BUCKET.
OVERALL [inaudible]
OTHERWISE WE'RE YEAH.
SO I WITH THAT THAT'S ALSO
RECOMMEND IT'LL COME IS THERE
BUT AGAIN LIKE EVERYONE I'M
HAPPY TO TAKE QUESTIONS ARE
LOWER LOOK AND OTHER ISSUES IF
THAT WOULD BE HELPFUL I THINK OF
AS MIND IT'S THEIR OWN YOU ANY
QUESTIONS.
YEAH -- WELL JUST SO YOU AND
YOUR FIRST YOUR FIRST COMMENT
ABOUT HOW ON THE COSTS ARE
GROWING AT A FASTER CLIP IS THAT
IS THAT PARTLY BECAUSE OF JUST
THE GENERAL PHENOMENON OF HEALTH
CARE COSTS.
YES I'M SAY SO CLARIFY I THOUGHT
WHAT I MEAN IS THAT THEY JUST
TEND TO GROW THE COST OF
HEALTHCARE TEND TO GROW FASTER
THAN THE THAT JUST SORT OF COST
IN GENERAL AND THIS IS JUST AN
ACROSS THE BOARD PROBLEM THAT WE
HAVE.
YES IT TOO AT THE IT'S A NICE
NOT LIMITED EDUCATION A
CALIFORNIA BY APPOINTMENT.
OKAY AND ARE YOU SEEING A AND
WHAT WHAT ARE SOME.
CAN YOU GET I GUESS FLUSH OUT
ALL THAT MORE SOME OF THE BEST
PRACTICES YOU'RE SEEING OUT
THERE -- IN TERMS OF AND AND I
I'D LIKE TO FOCUS ON STATES THAT
REALLY DO -- YOU KNOW.
HAVE.
GOOD STRONG RELATIONSHIPS WITH
THEIR WITH THEIR PUBLIC
EMPLOYEES THAT DID THAT.
YOU HAVE PROBABLY VALUE THE
PUBLIC EMPLOYEES -- BUT ARE
DOING SO IN A WAY THAT IS -- IN
pA FINANCIALLY SUSTAINABLE YOU
KNOW LIKE WHAT WHAT WHAT ARE
SOME LESSONS A CALIFORNIA CAN
LEARN GIVEN -- IN OUR VALUES IS
STATE.
I YOU KNOW I DON'T I DON'T WE WE
WE DON'T WANT TO TURN WE WANT TO
BE DRAWN FROM AND SOME STATES
THAT HAVE REALLY GONE OFF THE
DEEP IN TERMS OF UNDER INVESTING
IN -- EDUCATION THERE AND A
PUBLIC EMPLOYEES BUT BUT THAT
BUT BUT THAT THAT ARE FINDING
WAYS TO MAKE -- THEIR SYSTEM OR
THE MORE.
FINANCIALLY SUSTAINABLE.
WAS IT FOR ME AND FOR ALL OF YOU
ACTUALLY IMAGES THIS BILL ON THE
ISSUES THAT WE TALKED ABOUT
EARLIER WITH THAN THE GENERATION
FIX THAT AND AND AND ON THE
ISSUES THAT YOU ALL WERE WORKING
ON YES I'M OUTSIDE SO TO SAY
SOMETHING I TOUCHED ON BRIEFLY
ON THE HEALTH.
BENEFITS SIDE IS SOMETHING THAT.
AS I SAID I THINK SOME STATES
HAVE SEEN IS THAT -- IF -- IF
WHEN IF TEACHERS OR MAKE LARGER
CONTRIBUTIONS TO THEIR BENEFIT
PLANS THAT BOTH SIDES DISTRICT
MONEY BECAUSE THEY'RE THE AND
THE THE TEACHERS ARE PAYING SOME
OF THE BENEFIT COSTS AND IT ALSO.
MEANS THAT THEY TEND OP FOR
CHEAPER PLANS SO ONE OF THE
UPSHOT OF THAT IS IT CAN HELP
THE DISTRICT NAVIGATE THESE
BECAUSE IT'S ALSO POTENTIALLY.
FOR IT MIGHT BE FOR MANY
TEACHERS ALSO MORE ATTRACTIVE IN
SOME CASES BECAUSE IT DEPENDING
ON IF DISTRICTS TAKE THEIR
SAVINGS AND GIVE IT TO TEACHERS
BACK IN THE FORM OF SALARY FOR
EXAMPLE TEACHERS MY STILL AT THE
OPTION IF THEY WANT TO TAKE
THEIR THEIR SALARY COMPENSATION --
AND THEN AND THEN YOU MORE
FLEXIBILITY AND USE IT TO BUY
THE SAME BENEFIT PACKAGE IF
THEY'RE IF THEY'RE SO INCLINED
OR NOT.
I AM A WHY THERE'S SO MUCH
RELUCTANCE TO THAT SORT OF THING
WAIT WITH IT.
ON THE OTHER SIDE AMERICAN I CAN
ANSWER SORT OF HERE SORT OF IN A
GENERAL WAY I THINK IT VARIES A
LOT DEPENDING ON PROJECT IN A
PLACE LIKE CALIFORNIA WITH SO
MANY DISTRICT WITH SO MANY
DIFFERENT NEEDS I THINK IT'S A
COMBINATION OF DISTRICTS IN
DIFFERENT PARTS OF THE STATE.
HAVING DIFFERENT NEEDS IN TERMS
OF HOW THEY NEED TO COMPENSATE
EMPLOYEES OR THE KINDS OF
PACKAGES THAT HAVE BEEN
INHERITED OVER TIME BUT I CAN'T
SPEAK DIRECTLY TO SORT OF WHY
INDIVIDUAL DISTRICTS IN MAKING
THAT THE CHOICES THAT THEY MAKE
[inaudible]
ON OKAY HAVE YOU SEEN ANY
DISTRICT ANY OF YOU GUYS SEEN DO
YOU HAVE ANY COMMENTS ABOUT THE
INTERCHANGE THAT WE HAD EARLIER
WITH MR FIND OF YOU KNOW ABOUT
HOW DISTRICTS ARE.
HAVE YOU SEEN ANY DISTRICTS THAT
HAVE THAT HAVE SUCCESSFULLY
FOUND A WAY -- TO YOU KNOW TO TO
TRANSITION -- THERE HAVE
LIABILITIES.
TO BETTER TAKE ADVANTAGE OF THE
EXISTING.
INFRASTRUCTURE OUT THERE WHETHER
BE MEDICARE COVER CALIFORNIA ACA
AT BUT DO SO IN A WAY THAT
REALLY -- YOU KNOW BECAME A IN
WIN FOR THEIR BOTH THEIR
RETIREES AND THEIR CURRENT
EMPLOYEES WHO COULD THEN REAP
THE WINDFALL OF THE SAVE MY NEED.
THAT MONEY COULD BE ROLLED INTO.
CLASS SIZE REDUCTIONS AND SALARY
INCREASES AT OTHER GOOD EXAMPLES
OUT THERE OF FOLKS WHO FOUND A
WAY.
TO MAKE THIS CHANGE IN IN A WAY
THAT COULD BE A WIN WIN FOR THE
DISTRICT.
HI COULD SOMEONE COULD GIVE ME
MORE VERSUS THE WIRING TO SEEMS
TO ME TO BE -- I'LL TAKE A STEP
SO I I THINK THE PROBLEM IS IT'S
VERY HARD TO TRACE SO IN THE
PENSIONS SPACE THERE ARE A
NUMBER OF STATES THAT HAVE DONE
THINGS TO REDUCE THEIR PENSION
COSTS.
AND I WOULD LIKE TO THINK THAT
THAT SOME OF THAT SAVINGS IS
GONNA HIGHER TEACHER SALARIES
BUT IT'S EXTREMELY DIFFICULT TO
FIND THAT NUMBER.
THE BUDGETS ARE VERY COMPLICATED
SAID A PENSION COSTS HAVE GONE
DOWN AND MAYBE SALARIES HAVE
GOTTEN BETTER BUT IT'S
IMPOSSIBLE TO KNOW WHAT SALARIES
WOULD HAVE BEEN.
IF THEY DIDN'T LOWER THEIR
PENSION COSTS.
AND SO YOU KNOW NO ONE SITTING
ON THE BUDGET SAY OKAY HERE'S
THE PENSION SAVINGS WHEN I PUT
IT RIGHT INTO SALARIES.
YOU KNOW IN MARKING OUT AND READ
FOR US TO SEE ON THE BUDGET SO.
I THINK IT'S REALLY HARD TO
TRACE WHERE THE MONEY'S GOING
BACK I I WILL SAY YOU KNOW
THERE'S A NUMBER OF STATES HAVE
I GET UP A COULD NOT BE PART OF
A OF A COLLECTIVE BARGAINING
PROCESS WHERE IT WHERE.
THERE IS A LITTLE BIT MORE
DIRECT NEXUS YOU KNOW THAT THE
OKAY WE'RE GONNA MAKE THESE
CHANGES HERE AND THEN HERE'S
WHAT THE DISTRICT'S GONNA DO.
ON THIS END AND THAT'S A VERY
REASONABLE TO ME BUT I HAVE NO
EXPERTISE TO SAY WHY THAT
DOESN'T HAPPEN MORE BUT CLEARLY
SOMETHING THERE SOMETHING
INHIBITING THAT RIGHT BUT IT
SEEMS SENSIBLE TO ME WHAT YOU
JUST SAID.
WE KNOW WE WE COULD SOMEBODY
COULD CALCULATE THAT JUST IF I
COULD JUMP AND SOMEBODY COULD
CALCULATE THE DIFFERENCE IN.
IN TOTAL COST FOR A POST
RETIREMENT BENEFITS OF FOR
SOMEONE WHO SIXTY FIVE YEARS OF
AGE AND OLDER. FOR HEALTH
PREMIUM VERSUS MEDICARE AND THE
COST OF A SUPPLEMENT AND YOU
COULD COME UP YOU WOULDN'T IT
WOULDN'T BE SO EXACT SCIENCE BUT
YOU KNOW WHAT THE DELTA IS.
AND PRESUMABLY THE DELTA IS
GOING TO GO TO SOMETHING.
IT'S EITHER GOING TO GO
CORRECTION SALARIES AND BENEFITS
WHO ARE ACTIVE EMPLOYEES OR IT'S
GOING TO GO TO SOMETHING ELSE
RIGHT.
BUT I GUESS NOBODY'S DONE THAT
SORT OF ANNOUNCEMENT COULD ALL
BE DONE AS PART OF A YOU KNOW
BUT PARTY PROCESS FOR YOU CAN
COME BACK TO YOU JUST CAME UP I
THINK WAS SACRAMENTO SAID YOU
GUYS WERE JUST TALKING ABOUT HOW
THEY HAVE TO DO THIS REDUCTION
IN.
COSTS BUT THEY ENDED THE
TEACHERS UNION WANTS THE MONEY
TO GO TO CERTAIN THINGS IN THE
DISTRICTS AS WE JUST NEED THE
MONEY BECAUSE WE'RE IN A
FINANCIAL CRISIS.
I FEEL LIKE THIS IS THE KIND OF
SCENARIO THAT PLAYED OUT WITH.
THAT.
I SESSION SPECULATE TOO MUCH
RIGHT MANAGEMENT WOULD HAVE TO
THE DESTROYED A LOCAL DISTRICT
THAT HAS ONE OF THESE POST
RETIREMENT BENEFIT PLANS IF.
IF THEY SUFFERED SOMEBODY WOULD
HAVE TO TAKE THE CALCULATOR RUN
THE NUMBER.
AND SAY HERE'S WHAT THE DELTA IS
AND THEN PUT THE MONEY ON THE
TABLE HAVE A CONTRACT
NEGOTIATION AND EITHER THEY HAVE
IT HAS BEEN SUCCESSFUL OR
NOBODY'S BOTHERED SO.
I THINK THE RIGHT WHAT YOU'RE
GETTING MY HOPE POINT IS THAT
YOU THE CLIP YOU THE THE
BARGAINING UNIT WOULD ONLY
PERSONALLY FIND AS ATTRACTIVE AS
AN OPTION IF A WE WERE VERY
CLEAR ABOUT GUARANTEEING.
YOU KNOW OF OF OF OF OF
SUBSTANTIVELY -- YOU KNOW EQUAL
LEVEL SERVICE FOR THE RETIREES
PLUS.
OF A YOU KNOW A DIRECT NEXUS
BETWEEN THOSE COST SAVINGS AND
SUPPORT FOR THE EMPLOYEES
THROUGH.
YOU KNOW HIRING MORE FOLKS AND
PEOPLE BETTER.
SO BUT BUT THAT WOULD SEEM TO ME
TO BE SOMETHING THAT.
WE SHOULD WILL FIND OME COMMON
GROUND ON GIVEN I MEAN THAT WAS
THE WHOLE CONVERSATION ABOUT
THAT I'VE BEEN SEEING WITH THE
RIGHTS OF THE STRIKES PEOPLE
BEING UPSET ABOUT.
THE LACK OF ADEQUATE NURSES IN
LIBRARIANS IN CLASS SIZE IS
GOING THROUGH THE ROOF AND
THAT'S HOW YOU FIND MORE MONEY
AND YOU DO SO IN A WAY THAT
DOESN'T YOU KNOW.
ATRAER RETIREES.
I MEAN YOU GUYS ARE ALL KIND OF
NODDING TO ME BUT I BUT I GUESS
'M I'M WHAT.
THE GIVEN HOW HOW HOT THIS IS
GETTING WHY WHY AREN'T WE WHAT
WHY IS IN THIS BEING MORE WHY IN
THIS OF OF A MORE.
INTENSE CONVERSATION GOING ON AT
THE LOCAL LEVEL LIKE WHAT WHAT'S
WHAT'S WHAT'S STANDING IN THE
WAY WHAT CAN WE DO TO HELP
[inaudible]
PUSHED ALONG.
SO MY MY NOT IT IS BECAUSE OF
THEIR THERE'S ACTUALLY GOOD
EVIDENCE IN THE RESEARCH
LITERATURE THAT THE TEACHERS
DON'T VALUE THE COST OF THEIR
PENSIONS.
AT THE FULL COST AT AT WHAT IT
COSTS THAT TIPPER TO PROVIDE
THEM IN TERMS OF THEY'D RATHER
HAVE MORE RESOURCES SHIFTED THE
CURRENT SALARIES AND SO.
AND AND I'M GONNA DETAILS
WHETHER I I THINK THERE'S SOME
COMPELLING EVIDENCE THAT THAT'S
TRUE SO THE ANSWER TO YOUR
QUESTION MUST BE A POLITICAL
CONSTRAINTS AND AND AND WERE OUT
OF MY AREA OF EXPERTISE FINAL TO
TELL YOU BUT ALL THE EVIDENCE ON
THE TABLE SUGGEST THAT A DEAL.
LIKE THAT.
EVERYONE SHOULD BE WILLING TO
COME TO THE TABLE TO TALK ABOUT
THAT SO THERE SOME ASPECT OF THE
POLITICAL PROCESS THAT'S THAT'S
INHIBITING THINGS IS IS MY ONLY
RESPONSE.
CAN YOU SPECULATE IT FURTHER I
MEAN YOU KNOW I I UNDERSTAND
YOU'RE NOT POLITICIZE THIS BUT
LIKE.
WHAT'S GOING BUT WHEN MY MISSING
HERE WITH WHAT YOU KNOW AND
ESPECIALLY ON THINK THIS THAT
YOU JUST RAISED.
IF THE EMPLOYEES THEMSELVES
WOULD RATHER.
HAVE A DIFFERENT STRUCTURE
[inaudible]
THE I'M NOT AYE THIS IS NOT MY
AREA OF EXPERTISE BUT I'M NOT
SURE IF THAT'S A GENERALITY I
MEAN YEAH -- I CAN SEE THAT THAT --
NEWER TEACHERS FOR FOR LIQUIDITY.
AND AND WOULD LIKE MORE OF THEIR
COMPENSATION PACKAGE LOWER THAN
THE SALARY. NINE AS YOU GET
OLDER AND YOU MIGHT HAVE A
FAMILY I MEAN I I GUESS IS
VARIATION THERE BUT COR YOU KNOW
THIS MUCH BETTER THAN I DO THE
STUDY I'M REFERRING TO ACTUALLY
LOOKS OLDER TEACHERS AND SO
OFTEN IS AS EVEN THE MORE TRUE
FOR YOUNGER TEACHERS -- YEAH
OKAY INTERESTING OKAY THE
PENSIONS ARE EXTREMELY EXPENSIVE.
AT SURELY THE VALUE THE IDEA
THAT THEY CAN HAVE RETIREMENT
ABSOLUTE THAT'S AB.
SO IT THAT IS SO THAT THE STUDY
I'M THINKING OF IS IN ILLINOIS
AND THERE'S A REALLY GENEROUS
PENSIONS FOR THE TEACHERS THERE
AND YOU GET A TON OF MONEY
RETIREMENT AND THERE IS AN
OPPORTUNITY TO BUY BACK TO BUY
MUCH BETTER PENSIONS.
BUT THE PRICING CURRENT SALARY
TEACHERS WILLING TO PAY WAS FAR
LESS THAN WHAT IT COST TO
PROVIDE THOSE BENEFITS.
BUT IS THAT MAYBE THAT HAS MORE
TO DO WITH THE FACT THAT.
PEOPLE ARE PEOPLE COSTS ARE AS
THEIR THEIR EVENT HORIZONS ARE
NOT THAT FAR SO AS YOU WE WANT
LIQUIDITY NOW RATHER THAN LATER
YOU KNOW I WAS THINKING THAT
WRAPS IT SO THE WAY THAT THE
PERSON TO THAT'S THEY DESCRIBE
IT IS THAT -- ARGUMENT WAS THAT
TEACHERS IN PUBLIC SECTOR
EMPLOYEE PLAYS WERE GENERALLY
ARE ARE OVER SATURATED WITH
PENSION WELL.
SO ON THE MARGIN SO THEY DON'T
VALUE THEIR POTENTIAL THEIR
PENSIONS ARE JUST SO GENEROUS.
THE RALLY RELATIVE TO THE
RETIREMENT OF A LOT OF OTHER
PEOPLE THAT ON THE MARGIN NEED
RATHER PULL SOME OF THAT MONEY
FORWARD IF THEY CRIED AND THERE
AND THEY GOT ABOUT HER ARE YOU
AND I'M NOT.
GETTING RELATIVELY LOWER PAY
THAN OTHER PROFESSIONALS AT
RIGHT HANDED RATHER RE BALANCE
OUT A LITTLE ABOUT ANYTHING
THAT'S THAT'S THE ARGUMENT I
MAKES US [inaudible]
YEAH.
I'M OKAY WELL I YOU KNOW ANY
OTHER KIND OF COMMENTS ON THE
INTERCHANGEABLE AND ABOUT THIS
OR NOT REALLY I MEAN I'M ALSO A
LOCAL SCHOOL BOARD MEMBER HERE
IN CALIFORNIA SO -- SO WE WE
ACTUALLY ARE -- HEADS ARE NOT
BIG AND WE'RE WE'RE REALLY
RUNNING ON RAZOR THIN MARGIN
HERE BUT WE HAVE A CONSULTANT
COME IN WITH -- SO WE'RE GOING
FOR NEGOTIATIONS SO WE HAD A A A
CLOSED SESSION AND WE ACTUALLY
HAVE CONSULTANT COME IN WITH A
AN EXCEL SIMULATOR AND WE HAD TO
MAKE ALL SORTS OF DIFFERENT
CHOICES -- TO TO DEVELOP WHAT
OUR SIDE OF THE OFFERS GOING TO
BE -- SO IT'S IN LINE WITH WHAT
YOU'RE DOING BUT WE WE OF HAS
RUN CLEAR THERE BECAUSE DR.
OKAY AND I JUST ALSO WANT TO
POINT OUT I'VE HAD OPPORTUNITY
ME PRIVATELY WITH MISTER WARREN
I I VERY MUCH RESPECT AND
APPRECIATE YOUR RESEARCH WE'RE
DOING SOME WORK IN THIS AREA
RIGHT NOW BUT THE ISSUE OF A
SPECIAL ED FINANCES BECAUSE AS A
SCHOOL BOARD MEMBER YOU KNOW.
IT'S BECOME AN ENORMOUS
CHALLENGE FOR SCHOOL DISTRICTS
AND ANOTHER REAL GROWING COST
PRESSURE.
AND THAT IS CONTINUE TO GROW AT
A AT A RATE.
MIRRORS THE THE THAT THAT KIND
OF IT THE BENEFITS LIABILITIES
THAT EVERYONE'S TAKEN ON AND AND
THAT HAS TO DO WITH FEDERAL LAW
AND AND THE FACT THE PHONE
GOVERNMENT'S REFUSED TO FIND --
ID A EVEN A CLOSE TO WHAT THEY
PROMISED INITIALLY LET ALONE THE
FULL COST -- BUT YOU KNOW AND
WATCH THIS SPACE BECAUSE THIS IS
CERTAINLY AN AREA THAT I'M THE
RESPECT OF TIME ON MIGHT IT
MIGHT I JUST ADD IN ADDITION TO
THE THE THE UNDERFUNDING OF IDA
THEIR THINGS LIKE YOU KNOW MADE
ITS FINANCIAL SUPPORT AND
MAINTENANCE OF EFFORT.
THAT THEY THE SPENDING ON
SPECIAL EDUCATION THE STICK.
RIGHT RIGHT SO SO -- I MEAN
THERE'S GOOD REASONS FOR FOR A
LOT OF THIS AS WELL BUT DON'T
WANT TO ALLOW.
DESTRUCTIVE JUST DROP.
DROP FUNDING FOR NO REASON.
BUT BUT RIGHT RIGHT RIGHT I
THINK WE JUST WANT TO HAVE A
SYSTEM THAT BETTER REFLECTS THE
COSTS ASSOCIATED.
IT WILL HAVE A WE'RE GOING TO
HAVE THE SUBCOMMITTEE WILL HAVE
ANOTHER HEARING THAT -- AT LEAST
IN PART FOCUSES ON SPECIAL
INTEGRATION AND I'LL INVITE MY
COLLEAGUES TO PLEASE.
THAT THAT SURVEYS.
YEAH I WANNA BRING THE THANK YOU
FOR YOUR TESTIMONY HONORING THE
ISSUE BACK TO THE ISSUE OF
PENSIONS -- AND OBVIOUSLY IN
STATE GOVERNMENT AT ALL LEVELS
WE HAVE THIS PROBLEM -- THAT
WE'RE TALKING ABOUT FOR THE
SCHOOLS.
SO THE UNIVERSITY OF CALIFORNIA
HAS A INNOVATIVE WAY OF TRYING
TO DEAL WITH IT.
THEY HAVE CREATED AND AN
OPTIONAL MATTER REQUIRED AND
OPTIONAL FOR A ONE K.. FOR NEW
EMPLOYEES -- THAT THAT.
THE SOME OF THE CALCULATIONS OF
IN NATURE THAT IF YOU'RE GONNA
CHANGE JOBS IN TEN OR FIFTEEN
YEARS YOU'D BE BETTER OFF.
IN GETTING THAT MONEY BACK.
SOME SORT OF A MATCH -- AND BE
ABLE TO INVESTED ON YOUR OWN --
ADDED AND THAT WOULD BE BETTER
OFF FOR THE EMPLOYEES SO YOU
WERE TO CALIFORNIA OFFERED THIS
I GUESS THREE YEARS AGO.
AND THAT THE INFORMATION I GET
IS THAT 40%.
OF ABOUT 40% OF THE NEW
EMPLOYEES ARE PICKING.
THAT FOUR OH ONE K. OPTION. FOUR
THAT'S A LOT NOW.
I UNDERSTAND THERE'S SOME
LIMITATIONS THAT SCHOOL
DISTRICTS BEING ABLE TO PROVIDE
THAT SAME OPTION. FOR NEW
EMPLOYEES AND MAYBE YOU COULD
SPEAK TO THAT.
YEAH SURE SO I WILL ALSO SAY SO
THERE'S BEEN A NUMBER OF STUDIES
OF K. TWELVE TEACHERS THAT MERE
THAT SAME RESULTS OF FLORIDA
COME TO TOP MY MIND THEY HAVE A
CHOICE TEACHERS CAN CHOOSE WHICH
PLAN A ONE I BELIEVE IT'S ABOUT.
FIFTY FIFTY WOULD CHOOSE THE
FOUR OH ONE K. TYPE PLAN VERSUS
DEFINED BENEFIT -- SO I DO THINK
THERE'S A LOT OF DEMAND THE
WORKFORCE IS DIVERSE YOUR POINT
ABOUT YOUNG WORKERS I THINK IT'S
QUITE WELL ESTABLISHED IF YOU'RE
NOT GONNA STAY IN IN THESE
POSITIONS FOR A FULL CAREER
YOU'RE BETTER OFF GETTING A FOUR
ONE K. TYPE PLANTS.
RIGHT NOW THERE IS NO WAY YOU
CAN'T.
THERE'S NO THESE IT'S A STATE
LAW DAY STATE POLICY TO EL ALL
THE TEACHERS HAVE TO BE ENROLLED
IN CAL STIRS.
SO THERE HAVE TO BE A CHANGE TO
STATE LAWS MY UNDERSTANDING IN
ORDER TO ALLOW MAKE THIS
POSSIBLE BUT THE NUMBER OF
STATES HAVE DONE THIS.
THE SOMEONE SUGGEST THAT -- IF
THAT LAW WERE TO BE ENACTED.
THAT YOU WOULD JEOPARDIZE
CHARACTERS BECAUSE YOU WOULD NOT
BE GETTING THOSE WE WERE
CONTRIBUTIONS INTO THE SYSTEM
WOULD THAT BE YOUR ANALYSIS.
I THINK I THINK THAT'S A FALSE
ARGUMENT -- BECAUSE THE PLAN THE
SYSTEM IS NOT SUPPOSED TO BE
DESIGNED TO HAVE THAT THE SYSTEM
IS SUPPOSED TO BE COURT FUNDED
EVERY FOR EVERY YEAR IBM THE
FULL BENEFITS ARE SUPPOSED TO BE
PAID BY THEMSELVES IS NOT
SUPPOSED TO BE A PAY GO SYSTEM.
ANOTHER WAY TO STATUS IS THERE'S
AT THAT POINT PROBLEM RIGHT NOW
BECAUSE THE CALIFORNIA'S SORT OF
YOU CAN IMAGINE ANALOGY TO DIG A
HOLE.
AT SOME POINT YOU HAVE TO START
DIGGING THE ARGUMENT THAT YOU
THE ONLY THING YOU CAN DO IS
KEEP DIGGING IS NOT REALLY
COMPELLING ARGUMENT EVER GET OUT
OF THE HOLE.
I'M YOU HAVE A CERTAIN DAY EVEN
ACCUMULATED THAT ALREADY
HAPPENED YESTERDAY IS GONE AND
AND THAT'S NOT GOING TO BE
THAT'S NOT GONNA CHANGE
REGARDLESS WHAT POLICY FROM
TOMORROW.
THE BECAUSE OF YOU ACTUALLY
AGREED WITH THAT ARGUMENT THAT
SOMEHOW THE CURRENT SYSTEM WOULD
BE AFFECTED.
IN ESSENCE YOU BE ACKNOWLEDGING
THAT YOU'RE ENGAGED IN A PONZI
SCHEME.
THAT THE SOLVENCY IS ONLY
OCCURRING BECAUSE OF GETTING
MORE SUCKERS TO COME BACK INTO
THE SYSTEM TO PAY FOR THE
BENEFITS OF THAT YOU'VE ALREADY
COMMITTED.
TO YOU SAID IT YEAH SELF.
I MEAN I I FIND THE THING SO
INTERESTING BECAUSE HAVE A
SITUATION WHERE UP WITH EVIDENCE
IN AND OUR STATE AND IN OTHERS
THAT THE EMPLOYEES BENEFIT THEY
IT'S A DESIRABLE OPTION FOR THEM.
AND AND AT SO THEY WOULD THEY
WOULD LIKE IT IT'S IT'S A CHOICE
AND FROM OUR POINT OF VIEW IT
STOPS THAT WHOLE FROM GETTING
ANY DEEPER.
RIGHT AND ADDS AN OVERTIME WILL
DETACH AS FROM THIS INCREDIBLY
DIFFICULT CIRCUMSTANCE THAT WERE
AND AGAIN OVER TIME -- AND YET
THERE IS RESISTANCE.
BECAUSE OF THIS FALSE CLAIM IS
YOU HAVE ACKNOWLEDGED THAT
SOMEHOW THE EXISTING RETIREMENT
SYSTEM WOULD BE IN JEOPARDY.
OF TAKING THAT STEP AND YET WE
PREVENT ALL OF OUR SCHOOL
DISTRICT FROM HAVING THAT CHOICE
THAT CHOICE TO HAVE AN OPTION.
IS NOT EVEN GIVEN TO THEM TODAY.
I FIND IT -- YEAH WITH ITS PART
NOW THEY THEY IF IT DID THEY
CANNOT BARGAIN THIS OPTION IS
THAT CORRECT.
THEY COULD ADD MAYBE PROBABLY
ADDED ONE ON THEMSELVES BUT THEY
COULD NOT GIVE A CHOICE YOU HAVE
TO BE AND CAL STAR IS IF YOU'RE
A CERTIFIED.
SOMETHING.
AT SO I APPRECIATE THAT -- THE
THAT IN SAY BY THE WAY.
WE HEARD ABOUT THE LA EXAMPLE
WHERE THEY ACTUALLY HEARD
THROUGH NEGOTIATIONS.
HAVE GIVEN THE CONTROL -- OVER
OTHER BENEFITS PROGRAM TO
ANOTHER COMMITTEE.
THAT SEEMS TO BE DOMINATED NOT
BY THE ADMINISTRATION BUT BY THE
PLOY GROUPS HAVE YOU HEARD OF
THAT EXAMPLE IN PLACE ELSEWHERE
IN CALIFORNIA.
THAT MUST BE HEALTH NOT PENSIONS
RIGHT.
HEALTH YES SO -- YEAH I I'M NOT
AS FAMILIAR WITH THE HEALTH
STUFF YOU HAVE A COULD I KNOW
CAN BE WITH PENSIONS BECAUSE
PENSION YOU KNOW THE DISTRICT
DON'T HAVE A CHOICE.
OKAY VERY GOOD THANK YOU.
YES SIR -- I JUST -- I'M I'M I'M
TRULY CAN TREE BY THIS WHOLE
ISSUE OF PRE FUNDING WHAT WHAT
TIME BECAUSE IT DOES SEEM TO BE
THE ANSWER RIGHT I MEAN YOU KNOW.
CERTAINLY MOVING FOR I MEAN HERE
I AM ON THE CHAIR THE
ENVIRONMENTAL QUALITY COMMITTEE
PART WHAT WE DEAL WITH THE FACT
THAT CLIMATE CHANGE IS HAPPENING --
YOU KNOW WE'RE NOT GOING TO STOP
IT AT LEAST NOT AS SOME OF IT
AND YET WE GOT TO DEAL WITH WHAT
WE CAN AND INCLUDING BOTH BE BE
MORE RESILIENT ALSO REDUCING THE
THE SPEED WITH WHICH IT HITS US
SO IT'S KIND OF THE SAME
SITUATION IN.
IN THE WORK THAT YOU DO -- WHAT
WHAT SO SO SO SO I I WAS?
I'M THINKING LIKE HOW HOW DO WE
HELP TO MAKE PRE FINDING MORE OF
A REALITY -- YOU MENTIONED THAT
I HAVE IS NOW STARTING TO ENTER
INTO THE CONVERSATION ABOUT
GENERAL ABOUT ACCOUNTING
PROCEDURES AND THEY KNOW IS THIS.
IS IS NOW BECOMING A PART OF
WHAT FIX MATT OUGHT TO BE
LOOKING AT AT WHAT -- WHAT THE
COUNTY OFFICES OUGHT TO BE
LOOKING OUT WHEN THEY MAKE A
DECISION ABOUT [inaudible]
CONDITIONAL -- YOU KNOW I'M
STAMP OF APPROVAL ON ON A
DISTRICTS BUDGET THE EXTENT TO
WHICH THEY'RE ACTUALLY YOU KNOW
TAKING CARE OF THE LONGER TERM
LIABILITIES THAT THEY'VE TAKEN
ON HOW HOW CAN WE HELP TO
ENCOURAGE AND PUSH.
OUT RESPONSIBLE PRE FINDING INTO
THE FINANCIAL PRACTICES OF
DISTRICTS.
I MISTER SPEAKER THE QUICKLY IN
A PASSIVE APOSTLE FOR THE
PENSIONS THIS IS NOT REALLY A
QUESTION THAT THE STATE SETS
WITH THE DISTRICTS PAY TO THE
PENSION PLAN.
THAT'S STATE LAW AND AND THEY
JUST FOLLOW THE SCHEDULE SO IT'S
PRETTY FUNDED TO THE EXTENT YOU
GUYS LEGISLATIVE TO BE REFUNDED
AND FIVE FIVE BY CAL STIRS AS A
WELL CAL STAR SPECIFIES A RATE
BUT RIGHT OKAY SAMPLE OKAY SO
I'M MORE TALK ABOUT HIGHER TO
TWENTY FOURTEEN CALIFORNIA.
WHEN I'M PAYING WHAT HOUSE ARE
SET RIGHT OKAY BUT YOU THAT'S A
WHOLE OTHER ISSUE RIGHT THERE?
HELLO SO I'M ACTUALLY MORE
TALKING TO TO TO MISTER BURN OUT.
YEAH SO ON THE ON THE BEDSIDE
THE ALL THE ADVANTAGES THAT I
MENTIONED OF PRE FUNDING ON THE
OPEN SIDE I MEAN REALISTICALLY
THERE ARE THE IT IS IT IS A
SHORT TERM COST TO DISTRICTS TO
BE PRE FUNDING AS THE EMPLOYEES
ARE EARNING.
THE BENEFITS AND I MEAN I THINK
FOR THE REASON WE'RE HERE IS A
DISTRICTS ARE FACING A LOT OF
COMPETING PRESSURES -- JUSTICE
PAYING INTO THE RAINY DAY FUND
IS A SHORT TERM COSTS BUT IT'S
GOING TO HELP US WIN.
YES AND TO BE CLEAR THE THERE
ARE INCLUDED ACCOUNTING
STANDARDS FOR DISTRICT TWO
INCREASINGLY REQUIRE THAT
DISTRICTS ACCOUNT FOR THESE
LIABILITIES FOR EXAMPLE AS
EMPLOYEES ARE IN THEM RATHER
THAN SORT OF NOT I CAN'T BRING
THEM ON THE ON THE BOOKS UNTIL
AFTER -- EMPLOYEES RETIRE BUT
THEY DON'T REQUIRE PRE FUNDING I
DO BELIEVE HOWEVER THAT --
PARTICULARLY NOW THIS IS
INCREASED WHERE DISTRICTS NEED
TO BE GETTING REGULAR --
ACTUARIAL REPORTS ON THEIR BED
LIABILITIES I DON'T KNOW EXACTLY
HOW -- FIGMENT DEALS WITH THOSE
BUT I MEAN I DO I DO BELIEVE
THEY ARE CONSIDERED AS PART OF
DISTRICTS -- SORT OF A IN THE
ASSESSMENT OF WHETHER DISTRICTS
WILL BE ABLE TO MEET THEIR
OBLIGATIONS GOING FORWARD I'M
NOT SURE I THINK PART OF THE
PROBLEM MIGHT BE THAT SOMETIMES
THE WINDOWS THAT ARE USED TO
ASSESS DISTRICT BUDGETS OFTEN
HAVE NOT PROJECTED -- IT FAR
ENOUGH TO SEE SOME OF THE WHEN
THE PUBLIC ABILITIES WILL BE
BECOMING DO AS THAT MIGHT BE A
FACTOR THERE BUT I WOULD DEFER
TO THE THE PEOPLE DOING THAT
THOSE BECAUSE THAT KIND OF
MONITORING.
DO YOU KNOW OF ANY EXAMPLES OF
OTHER PLACES WHERE THERE'S WHERE
WHERE STATE SAY DISTRICTS YOU
KNOW HEY LOOK YOU'RE TôI
WELCOME TO BARGAIN WHICH ONE A
BARGAIN.
THAT'S YOUR RIGHT BUT YOU HAVE
TO THEN BUILD.
THE COSTS ASSOCIATED WITH YOUR
YOU KNOW YOUR BARGAINING IN NOT
JUST.
YOU DID YOUR CURRENT BUDGET NOT
JUST -- ALLOW.
THAT TO BE ON THE BOOKS FOR WAY
OFF IN THE FUTURE I'M NOT OFF
HAND BUT I CAN I CAN LOOK AND
SEE IF STATES OTHER STATES HAVE
DONE THAT I HAVEN'T HEARD ABOUT
IT BUT IT'S IT'S A POSSIBILITY
YEAH.
BECAUSE WASN'T GROUPS REALLY ONE
OF THE CHALLENGES IS YOU KNOW
THIS IS A SCHOOL WHERE MEMBERS
IT.
THESE ARE COMMITMENTS THAT ARE
MADE THAT THAT THE CURRENT
PORTAL NEVER REALLY HAVE.
TO DEAL WITH -- ANY ANY AND THE
REAL COST IN AND BY THE WAY THIS
IS IT IT'S NOT SOMETHING THAT
THE BOARD NECESSARILY OUGHT NOT
TO DO.
I'M IF THAT'S THE PRIORITY THAT
THE COMMUNITY THE BOARD AND AND
THEN AND THE NEEDS OF THEIR
EMPLOYEES THAT THAT'S THAT'S
FINE BUT BUT IT OUGHT TO BE.
BUILT INTO THEIR FINANCIAL MODEL
IN A WAY THAT THEY CAN ACTUALLY
AFFORD AND AND AND AND THAT THEY
OUGHT TO BE ABLE TO THE ODD AT
AFTER I'D LIKE.
ACCOUNT FOR THAT WHEN THEY'RE
MAKING THAT DECISION
[inaudible]
THESE ISSUES.
THESE ISSUES AFFECT THE
DISTRICT'S ABILITY TO BORROW FOR
EXAMPLE.
WITH BONDS AND AND RATINGS IS IT
THE SAME ISSUE BONDS WE FACE IS
A STATE OR I DON'T KNOW THE
ANSWER TO THE QUESTION I JUST
ASKED.
IT WOULD MAKE SENSE IF THEY'RE
GOING TO SUCH A LARGE PROPORTION
OF THE SHOULD HAVE.
SOME SORT OF EFFECT ON YOUR BOND
RATING RIGHT.
WELL IF IN FACT IT'S TRUE THAT
SOME POINT IT'S GOING TO IT MAY
DRIVE A DIFFERENT BEHAVIOR. TO
GO.
TO WITH MY COLLEAGUES QUESTION.
I WAS AT THE LEGISLATIVE
ANALYST'S OFFICE.
I WAS AT THE LEGISLATIVE
ANALYST'S OFFICE IN TWO THOUSAND
FIVE AND WE HAD A COUPLE YEARS
WHERE WE SERVICE THE ISSUE OF OF
OF RETIREE HEALTH BENEFITS AND
THE THE LARGE LIABILITY AND WHO
ONE SUGGESTION WE MADE IS THAT.
YOU KNOW WHEN YOU'RE COMING OUT
OF A RECESSION THERE'S COVER
RECOVERY REVENUES ARE COMING
BACK INTO PROP NINETY EIGHT AND
USUALLY THERE'S SO ONE TIME
FUNDS THAT -- BECOME AVAILABLE
AND THAT.
WE SUGGESTED THE LEGISLATURE
COULD EARMARK SOME OF THOSE.
ONE THAT REQUIRED DISTRICTS TO
SPEND SOME OF THOSE ONE TIME
MONIES ON RETIRING AND PRE
FUNDING OR OR PUTTING MONEY AWAY
FOR THIS LIABILITY.
YOU KNOW YOU YOU DO HAVE A BIG
INFLUENCE ON SCHOOL FINANCE.
WHAT YOU'RE COMMITTEE DOES RIGHT?
AND ONE TIME FUNDS.
WE ARE A GOOD WAY TO ACCOMPLISH
CERTAIN KINDS OF OBJECTIVES AND
I THINK WE KIND OF THOUGHT
GETTING DISTRICTS.
THINKING ABOUT THIS ISSUE
PUTTING MONEYASIDE FOR THEM IN
A SENSE GETTING THEM STARTED ON
RETAIN THAT THAT DEBT.
OR YOU KNOW BUT ACCOMMODATING
THAT DEBT -- WOULD BE SOMETHING
THAT MAY BE THE STATE WILL
CONSIDER SO.
WE'RE GOOD WE'RE GONNA HEAR
SOMETHING SIMILAR IN THE NEXT
ISSUE WHEN THE COASTERS FOLKS
COME UP AND WE DISCUSS THE
GOVERNOR'S PROPOSALS.
ANY FURTHER QUESTIONS KILLINGS.
GERMAN IT'S AN EXCELLENT
CONVERSATION I APPRECIATE YOUR
TIME AND YOUR ATTENTION LOOK
FORWARD TO HAVING FURTHER
CONVERSATIONS WITH YOU ON THE
SUGGESTION JUST YOU MAY THANK
YOU VERY VERY MUCH.
PUT TAKE ISSUE NUMBER THREE CAL
STIRS PENSION PROPOSAL THIS ALSO
IS AN INFORMATION ONLY ITEM
[inaudible]
WHAT [inaudible]
NOW.
WE OPPOSE OPTION FOR ONE K..
THEY HAVE.
LIKE TO HAVE.
THANK YOU FOR JOINING US SO IF I
COULD HAVE YOU INTRODUCE
YOURSELVES STARTING MY LEFT
YOU'RE RIGHT SIR.
SO MY NAME IS MY NAME IS RICK
RENOWNED THE ACTUARY. FOR THE
CALIFORNIA STATE TEACHERS
RETIREMENT THIS MYSTERY THANK
YOU FOR JOINING US.
KENNETH COUPON WITH THE
LEGISLATIVE ANALYST'S OFFICE.
THANK YOU FOR COMING BACK ERIN
TODAVíA DEPARTMENT OF FINANCE
EARLIER THANK YOU FOR BEING HERE
AGAIN AS WELL OKAY WHO WANTS TO
START.
ALTHOUGH IN THE JUST THE ORDER
OF THE AGENDA HERE.
SO -- GOOD AFTERNOON NOW HER
MISTER CHAIR AND MEMBERS -- I'M
HERE TO PRESENT YOU JUST WITH A
BRIEF.
OVERVIEW OF THE ADMINISTRATION'S
PROPOSAL TO PROVIDE A TOTAL OF
THREE BILLION DOLLARS IN RELIEF --
FOR K. TWELVE SCHOOL DISTRICTS
LIKE ME BECAUSE GO DISTRICTS ON
THE EMPLOYER CONTRIBUTION.
RATES.
CAL STIRS -- AS I'VE BEEN HERE
IN THIS -- COMMITTEE ON PREVIOUS
OCCASIONS MENTIONING JUST THE
ROBUST INCREASES -- TO EDUCATION
FUNDING UNDER BOTH PROPERTY
EIGHT AND THEY'LL SEE IF F. OVER
THE LAST A HANDFUL OF YEARS
SINCE -- TWENTY THIRTEEN AS WE
HAVE ALSO BEEN COMING OUT OF THE
GREAT RECESSION AND OF COURSE
THIS YEAR IN TWENTY NINETEEN
TWENTY ALONE THE BUDGET PROPOSES
AN ADDITIONAL TWO BILLION
DOLLARS.
AUGMENTATION TO THE CFF -- TO
REPRESENT A THREE POINT 46% COLA --
ON TOP OF A MORE THAN THREE AND
A HALF BILLION DOLLARS THOSE WHO
FOR FOR SEA GLASS HERE -- WITH
ALL THAT THAT I'VE SAID AS I
SAID TODAY IN IN PREVIOUS
HEARINGS OF THE ADMINISTRATION
DOES STILL RECOGNIZE THAT MANY
DISTRICTS ACROSS THE STATE ARE
CONTINUE TO GRAPPLE WITH THE
RISING FIX COSTA DIFFICULT BUZZ
BUDGET DECISIONS MANY OF WHICH
ARE YOU HEARD OVER THE LAST
COUPLE OF HOURS.
HERE FROM THE DIFFERENT PANELS --
AND I THINK THAT WAS HELPFUL FOR
THE CONVERSATION -- AS ALL THE
DISTRICTS -- GRAPPLE WITH THOSE
THINGS ARE WORKING TOWARDS
IMPROVING OUTCOMES YOU KNOW FOR
ALL OF THEIR STUDENTS -- AND
ADDITIONALLY BASED ON THE
CURRENT STATE OF GENERAL FUND
REVENUES -- IT'S UNLIKELY THAT
SIGNIFICANT ADDITIONAL MONIES
WOULD BE AVAILABLE UNDER THE
PROPOSITION NINETY GUARANTEE --
OUT THE TWENTY EIGHTEEN REX
USING -- WOULD BE AVAILABLE AT
THIS THIS YEAR'S -- MAY REVISION
ON LIKE IN LAST YEAR'S BUDGET
ACT IN IN PREVIOUS YEARS -- WHEN
THERE WAS SIGNIFICANT REVENUE
CHANGES AT THE MAJOR VERSION --
IN THE POSITIVE.
DIRECTION -- WITHOUT SO IT MAKES
IT A LITTLE BIT MORE DIFFICULT --
MAKING SOME LEASES WE HAVE TO
MAKE WITHOUT SIGNIFICANTLY
REDUCING IN OTHER PARTS OF THE
BUDGET OUTSIDE OF EDUCATION.
I IN RECOGNITION OF THIS REALITY
ADMINISTRATION IS PROPOSING TO
MAKE A ONE TIME -- PROD NOT
OPPOSITION NINETY INVESTMENT AND
REALLY APPLY IN THE WAY THAT WE
FEEL YIELDS THE BEST RETURN ON
OUR INVESTMENT -- BOTH IN THE
SHORT TERM IN THE FORM OF RELIEF
TO SCHOOL DISTRICTS AND ALSO IN
THE LONG TERM TOWARDS PAYING
DOWN.
THE OF REMAINING UNFUNDED
LIABILITY FOR CAL STIRS A
SPECIFICALLY.
A PROPOSED TO SPEND A TOTAL OF
SEVEN HUNDRE FIFTY EXCUSE ME.
SEVEN HUNDRED MILLION DOLLARS
OVER THE NEXT TWO YEARS
APPROXIMATELY THREE HUNDRED
FIFTY MILLION DOLLARS IN EACH
YEAR SO IN NINETEEN TWENTY AND
TWENTY TWENTY ONE INDIVIDUALLY --
EFFECTIVELY -- LOWERING THE
CONTRIBUTION RATES FOR EMPLOYERS
BY 1% IN EACH YEAR FROM EIGHTEEN
POINT 1% DOWN TO SEVENTEEN POINT
1% IN NINETEEN TWENTY AND ALSO
FROM NINETEEN POINT 1%. TO
EIGHTEEN POINT 1% IN TWENTY
TWENTY ONE LIKE I SAID
APPROXIMATELY -- THREE HUNDRED
FIFTY MILLION DOLLARS STATEWIDE
IN SAVINGS TO EMPLOYERS IN EACH
OF THOSE YEARS -- THE REMAINING
TWO POINT THREE BILLION DOLLARS
APPROXIMATELY WILL GO TOWARDS
PAYING DOWN THE LONG TERM
UNFUNDED LIABILITY.
ESTIMATED EQUAL ABOUT EIGHT
POINT 5% REDUCTION IN FUTURE
YEAR CONTRIBUTION RATES
BEGINNING IN. TWENTY TWO TWENTY
THREE OF FOR A TOTAL ESTIMATED
SAVINGS THROUGH THE LIFE OF THE
CULTURES FUNDING PLAN OF ABOUT
SIX POINT NINE BILLION DOLLARS I
WITH THAT I'LL INCLUDE MY
REMARKS BUT HAPPY TO ANSWER
QUESTIONS.
WHAT'S WILL THROW THIS OUT WE
DON'T HAVE TO ADDRESS IT RIGHT
NOW THE IT LOOKS LIKE IT'S ABOUT
TWO POINT SIX BILLION AND CHANGE
FOR THE THE FIRST YEAR AND THEN
THE THREE FIFTY THREE AND FIFTY
MILLION FOR THESECOND YEAR.
IN TERMS OF THE BUDGET PLAN THE
ANALYSIS -- SPEAKS TO UNFUNDED
LIABILITY -- FOR BENEFITS TURNED
AFTER TWO THOUSAND THIRTEEN
FOURTEEN AND NOTE NOTES THAT'S
ABOUT TWO HUNDRED MILLION
PROJECTED TO GROW TO A BILLION.
AND MY QUESTION IS THIS WOULD WE
NOT BE.
IF NOT BETTER OFF AT LEAST IN A
GOOD POSITION.
TO SORT OF SATISFIED THAT
UNFUNDED LIABILITY RATHER THAN
LET IT GROW TO A BILLION AND IS
THERE A PLAN TO DEAL WITH THAT
IN SOME WAY.
AT SOME POINT JUST THINK ABOUT
THAT -- LET EVERYBODY ELSE GET
THROUGH AND THEN CAN WE JUMP
BACK AND DEAL WITH THAT I DIDN'T
WANT TO FORGET [inaudible]
QUESTIONS [inaudible]
HELLO.
THANK YOU AND GOOD AFTERNOON
NEWMAN -- MISTER CHAIR AND
SENATORS KENNETH COUPON WITH THE
LEGEND OF THIS OFFICE.
I'LL BE SPEAKING FROM A HANDOUT
THAT I THINK THE SERGEANT JUST
DISTRIBUTED AND YOU'VE ALREADY
HEARD A LOT ABOUT COASTERS TODAY
SO ALL -- DISPENSED WITH THE
FIRST PAGE AND JUST BY WAY OF
BRIEF BACKGROUND AND TURNING TO
PAGE.
TWO AND I WANTED TO TOUCH
BRIEFLY ON THE SIGNIFICANCE OF
THE CHARACTERS FUNDING PLAN THE
STATE ENACTED IN.
TWENTY FOURTEEN I CUSTER'S
CONTRIBUTIONS HAVE NOT BEEN
SUFFICIENT TO PAY FOR BENEFITS
AS TEACHERS OF BRING THEM FOR
MOST OF THE SYSTEM HISTORY --
MOST OF ITS HUNDRED PLUS YEAR
HISTORY.
BY THE EARLY TWO THOUSANDS ARE
REALLY ODD -- TWENTY TENS I
SHOULD SAY -- THAT UNDER FUNDING
HAD REACHED A CRITICAL POINT AND
THE SYSTEM WAS PROJECTED TO RUN
OUT OF FUNDING BY THE MID TWENTY
FORTY IS.
OF THE LEGISLATURE SPENT A LOT
OF TIME THINKING ABOUT THAT
ISSUE IT HAD MANY MANY HEARINGS
IT WAS OF A VERY.
COMPLETE THOROUGH STUDY THAT WAS
DONE MCALLISTER IS.
AND THE LEGISLATURE EVENTUALLY
CRAFTED A PLAN AT WORK WORKING
WITH THE ADMINISTRATION THAT
BALANCE THE CONCERNS OF
DISTRICTS -- WITH THE FUNDING
NEEDS OF CAL STAR IS.
AND HELP DISTRICTS WITH THE
LOCAL BUDGETING -- THAT PLAN I
GAVE DISTRICTS A SEVEN YEAR
STATUTORY SCHEDULE SO THAT THEY
WOULD KNOW IN.
TWENTY FOURTEEN WHAT THE
CONTRIBUTION RATE WOULD BE EVERY
YEAR THROUGH.
TWENTY TWENTY TWENTY ONE AND
PLAN ALSO FACED IN HIGHER
CONTRIBUTIONS FOR TEACHERS AS
WELL AS THE STATE -- GENERAL
FUND.
THE FIGURE ON PAGE TWO I THINK
GIVES YOU A SENSE OF HOW
SIGNIFICANT THAT PLAN WAS IN
MOVING CAL STIRS MUCH DIRECTORY
WHERE IT WAS -- ON TRACK TO ONE
OF THE FUNDING MY ON TRACK TO
REACH A FULL FUNDING -- OVER
THAT SAME PERIOD.
BUT AS YOU HEARD AND TURNING TO
PAGE.
THREE THIS IS A THIRTY TWO YEAR
PLAN.
AND SO -- PERHAPS NOT
SURPRISINGLY THE UNFUNDED
LIABILITY TODAY IS STILL QUITE
LARGE OVER A HUNDRD BILLION
DOLLARS.
OF THAT AMOUNT.
ABOUT SEVENTY ONE BILLION IS
ASSIGNED TO SCHOOL DISTRICTS.
THIRTY FIVE BILLION IS ASSIGNED
TO THE STATE THOSE PERCENTAGES
AREN'T FIXED THE LIABILITY KIND
OF SHIFTS BETWEEN STATE AND
DISTRICTS.
EACH YEAR WITH UPDATED SORT OF
ACTUAL NUMBERS AND INVESTMENT
RETURNS AND OTHER FACTORS -- BUT
STILL LARGE -- WHETHER YOU'RE
LOOKING AT JUST THE DISTRICTS
HERE ORDER -- THIS YEAR FOR THE
WHOLE SYSTEM.
AND THEN THE UNASSIGNED SURE OF
FIVE AND TWENTY THREE MILLION.
THE GUY SAID IT WAS TWO HUNDRED
MILLION IT'S ACTUALLY FIVE AND
TWENTY THREE MILLION I THINK THE
DIFFERENCE MIGHT BE AND HOW THE
ASSETS ARE SORT OF BEING VALUED
WITHIN CAL STIRS I CAN.
SURE CHARACTERS CAN GIVE YOU
MORE DETAIL ON THAT BUT YOU'RE
RIGHT THAT IT'S RELATIVELY
MODEST NOW BUT IT WILL KEEP
GOING I THINK OVER THE NEXT
COUPLE YEARS.
THE ADMINISTRATION GIVE YU A
GOOD OVERVIEW OF WHAT'S
HAPPENING WITH RATES AND
CONTRIBUTIONS UNDER THEIR
PROPOSAL.
ALL DISTRICTS FACE THE SAME
CONTRIBUTION RATE THERE ARE SOME
DIFFERENCES IN THE COST
INCREASES THE FEES.
BASED ON THE DECISIONS THEY'RE
MAKING ABOUT -- THINGS THAT
AFFECT PAY WELL MAINLY TEACHER
SALARY IN CLASS SIZE.
A SOME DISTRICTS THAT HAVE
INCREASED THOSE THINGS MORE
RAPIDLY OVER THE YEARS AND OTHER
DISTRICTS ARE ALSO FACING
CORRESPONDINGLY HIGHER INCREASES
IN THEIR HOUSES CONTRIBUTION
COSTS.
THE ADMINISTRATION ARE TRYING TO
PAGE FIVE GIVE YOU A GOOD
OVERVIEW OF THEIR PROPOSALS. ONE
POINTED EMPHASIZES THAT ALTHOUGH
THE PROPOSALS ARE SORT OF BOTH
INVOLVING HEALTHCARE IS THERE
REALLY A QUITE DIFFERENT IN
THEIR OBJECTIVES.
ARE THE SEVEN HUNDRED MILLION IS
REALLY A PROPOSAL THAT'S ALL
ABOUT BUDGET RELIEF BY DESIGN
IT'S NOT INTENDED TO SORT OF
IMPROVE OR WORSEN CAL STIRS
CURRENT.
FUNDING SITUATION IT'S REALLY
ABOUT PROVIDING RELIEF FOR
DISTRICTS IN THE IN THE NEAR
TERM OVER THE NEXT TWO YEARS.
OF THE TWO POINT THREE BILLION
IS SORT OF JUST THE REVERSE IT'S
MAINLY A PROPOSAL ABOUT PAYING
DOWN THE UNFUNDED LIABILITY AND
THERE ARE SOME LONG TERM
BENEFITS FOR DISTRICTS FOR THAT
BUT THEY REALLY ARE IN THE LONG
TERM THEY WON'T BE.
A SORT OF ANY IMMEDIATE SAVINGS
FOR DISTRICTS THE NEXT TWO YEARS
BUT THERE COULD BE -- MORE
MODEST SAVINGS OVER A MUCH
LONGER PERIOD OF TIME.
I TURNING TO OUR ASSESSMENT AND
HE'S SIX I THINK THE REASON THAT%
CAL STIRS HAS.
ACOSTA BEEN SUCH A DIFFICULT
CONVERSATION IS THAT THE
DISTRICT CONTRIBUTION RATE TODAY.
ALREADY AROUND 16%.
MORE THAN DOUBLE ITS LEVEL FROM
FIVE YEARS AGO.
AND DESPITE THAT INCREASE THE
RATE STILL ISN'T AT THE LEVEL.
WHERE IT'S NEEDED TO ACHIEVE THE
OBJECTIVES OF HE FUNDING PLAN?
AND SO THE QUESTION I THINK THE
GOVERNOR'S PROPOSAL PUTS BEFORE
YOU.
ISN'T SO MUCH ABOUT WHETHER TO
INCREASE DISTRICT RATES BUT WHAT
THE TIMING SHOULD BE AND WHEN
THOSE RATE INCREASES SHOULD
OCCUR.
AT DISTRICTS ARE LIKELY TO SEE
INCREASES IN RATES IS
CHALLENGING IN ANY FISCAL
ENVIRONMENT.
BUT AS YOU THINK ABOUT THE
QUESTION THE STATE RIGHT NOW IS
IN THE MIDST OF VERY STRONG
ECONOMIC TIMES.
A SCHOOL FUNDING AS YOU HEARD
HAS GONE TWENTY TWO BILLION OVER
THE PAST SIX YEARS ANOTHER TWO
POINT NINE BILLION IN THE
GOVERNOR'S PROPOSAL -- SCHOOL
FUNDING ON A PER PUPIL BASIS IS
AT AN ALL TIME HIGH AND SO THE
ALTERNATIVE WE WANT TO SKETCH
OUT FOR YOU.
IS TO SATISFY THE SEVEN HUNDRED
MILLION AS THE GOVERNOR PROPOSES
BUT NOT USE IT TOO IMMEDIATELY I
JUST DISTRICT.
THREE INSTEAD LEAVE THE CURRENT
RATES ON THEIR STATUTORY
SCHEDULE.
AND THAT INSTEAD USE THEM OUT.
DURING THE NEXT DOWNTURN IN
DISTRICTS MIGHT BE FACING
PARTICULARLY DIFFICULT BUDGET
CHOICES MUCH MORE DIFFICULT IN
THE ARE TODAY.
AND USE THAT SEVEN HUNDRED
MILLION TO PROVIDE GREAT RELIEF
AT THAT POINT.
TURNING TO ACQUIRE THE FINAL
PAGE PAGE -- SEVEN AND YOU PUT A
LOT OF ALREADY ABOUT THE
GOVERNOR'S PLANS FOR DEBTS AND
LIABILITIES HIS CHARACTERS
PROPOSAL IS JUST ONE OF MANY
PROPOSALS YOU'VE HEARD YOU HAD A
WHOLE FULL BUDGET COMMITTEE
HEARING ON THOSE TOPICS.
I'M A COUPLE WEEKS AGO SO I
WON'T FOR THE BELIEVER
ASSESSMENT.
BUT INBRIEF WE THINK THE STATE
DOES HAVE AN OPPORTUNITY NOW
WITH SUCH A LARGE A BUDGET
SURPLUS.
AND TAKING ADVANTAGE OF THAT
OPPORTUNITY TO PAY OWN SOME
LIABILITIES SEEMS PRUDENT THERE
ARE POTENTIALLY.
SIGNIFICANT LONG TERM SAVINGS.
YOUR ACTIONS ON THE TWO POINT
THREE BILLION I THINK ARE LIKELY
TO DEPEND ON HOW WILLING YOU ARE
TO ASSUME.
SOME ADDITIONAL SHARE OF
DISTRICT LIABILITIES.
AT A TIME WHEN THE STATE ALSO
HAS MANY OTHER LIABILITIES
INCLUDING LIABILITIES FOR ITS
OWN EMPLOYEES AND PENSION COSTS
THAT GO ALONG WITH THAT -- AND
SO IT SORT OF COMES DOWN TO YOUR
DECISION ABOUT ARE YOU WILLING.
TO TAKE ON A LITTLE BIT MORE OF
THE THE SHARE OF THE UNFUNDED
LIABILITY THAN WAS ORIGINALLY
ASSIGNED TO THE STATE.
UNDER THE TWENTY FOURTEEN PLAN.
A SO WITH THAT I WOULD BE HAPPY
TO TAKEANY QUESTIONS IS IT
POSSIBLE THAT THE DISTRICTS
DISTRICTS OF ALREADY BUDGETED
FOR THE RATE BY DOWN WHICH WOULD
CAUSE.
CHANGE AT THIS POINT WHICH MIGHT
CAUSE PROBLEMS.
IT'S CERTAINLY POSSIBLE I THINK
WE'D BE CONCERNED THAT THAT'S NO
THAT'S NOT GOOD FISCAL PRACTICE
TO BECOME SOMETHING FOR IT EVEN
HAPPENS -- I THINK IN THE PAST
DISTRICTS -- SOMETIMES THERE'S A
PERCEPTION OF THE JANUARY BUDGET
IS JUST KIND OF THE OPENING
LEVEL AND THERE ARE CERTAIN
THINGS WILL BE BETTER BY ME BUT
YOU KNOW THAT.
THAT'S NOT NECESSARILY THE CASE
THIS YEAR KIND OF LOOKING AT TAX
RETURNS IN SOME OF THE OTHER
ECONOMIC INDICATORS MAKE COULD
BE A LITTLE BIT TIGHTER.
AND SO I THINK.
IT'S IMPORTANT TO SEND THE SIX
SIX SIGNAL NOW OF OF CAUTION FOR
DISTRICTS ABOUT BANKING
EVERYTHING THAT'S NECESSARILY IN
THE GOVERNOR'S BUDGET RIGHT NOW
[inaudible]
CULTURES.
THANK YOU MISTER CHAIR.
BOTH THE GERMAN HAVE -- GONE
OVER THE THE PROPOSAL'S VERY
WELL THEY'VE DONE A VERY GOOD
JOB SO I WON'T REPEAT.
THINGS THAT HAVE SAID BUT WHEN
WE LOOKING AT THE SIX BILLION
DOLLARS IN TOTAL.
THAT IS PROPOSED TO THE
GOVERNOR'S BUDGET. TO TO BE
CONTRIBUTED TO CHARACTERS.
AND WE LOOK AT THE EFFECT ON THE
UNFUNDED LIABILITY.
IT'S A VERY GOOD PROPOSAL AND
WILL PAY DOWN.
DEBT OVER THE LONG TERM.
IN OVER THE LONG TERM THIS WOULD
BE A TREMENDOUS SAVINGS TO THE
STATE BECAUSE WE GET MONEY WE
WERE ABLE TO INVESTED.
AT LOW RIGHT NOW OUR ASSUMPTION
IS 7%.
BUT IN IN SOME CASES WE MAY BE
MORE OVER THE LAST THIRTY YEARS
CAL STARTED.
RATE OF RETURN IS AVERAGE EIGHT
POINT 6%.
SO WHEN WE HAVE THE MONEY YOU
CAN INVEST IT.
IN THE SAVINGS DOWN THE LINE.
CONTINUES TO GROW AND CONTINUE
TO GROW MULTIPLY SO.
THIS PROPOSAL WE THINK.
AND OTHERS LIKE IT.
ARE EXCELLENT IDEAS TO TRY TO
STRENGTHEN THE FUNDING PLAN
WHICH IS WORKING.
IS WORKING SO OUR MENU SO FAR
IT'S WORKING.
IT'S FIVE YEARS THE THE THE
PROPOSAL'SPASSED IN TWO
THOUSAND FOURTEEN BUT IT DIDN'T
START TO TWO THOUSAND SIXTEEN IN
EFFECT SO IN EFFECT IT'S BEEN IN
EFFECT.
WHERE CONTRIBUTIONS OF JUMPED
FOR THE LAST COUPLE YEARS AND SO
FAR?
IS WORKING VERY WELL SO WE
SUPPORT.
OPPOSED TO STRENGTHEN.
THE THE FUNDING PLAN AND THIS IS
ONE OBVIOUSLY THAT THAT WOULD DO
SO AND SO WITH THAT I'M JUST.
AVAILABLE FOR ANY QUESTIONS WELL
LET ME AS MY GENERAL QUESTION
THAT I SORT OF ALLUDED TO AT THE
BEGINNING WHAT WE DO ABOUT THE
UNASSIGNEDUNFUNDED LIABILITY
FOR THE BENEFITS OF THAT --
EARNED WERE UNDER CRUDE AFTER TO
THE TWENTY THIRTEEN TWENTY
FOURTEEN YEAR SO SO RIGHT NOW IT.
IT WOULD DEPEND ON THE INVESTOR
RETURNS IN THE FUND IF THERE'S
ENOUGH ACCESS.
FROM THE INVESTMENT TURNS TO
MAKE UP FOR THIS.
SO.
I THINK RIGHT NOW WHAT WE'RE
DOING WILL KEEP AN EYE ON IT.
BECAUSE IT HASN'T GROWN VERY
LARGE NOW BUT IT WILL CONTINUE
TO GROW.
UNLESS A SOLUTION IT IS MADE ARE
THAT THEIR ACCESS INVEST RETURNS
TO COVER SO I MEAN I GUESS MY
THOUGHT AND MY QUESTION IS MAYBE
TO FINANCE.
IF THIS TURNS OUT TO BE A YEAR
THAT'S A GOOD YEAR WHO KNOWS IF
WE FIND THAT.
THE MISSING TWO POINT TWO
BILLION OR WHATEVER THE NUMBER
IS HAPPENS TO SHOW UP IN THE
MAILBOX SOMEWHERE -- WHY
WOULDN'T WE TAKE TWO HUNDRED
MILLION AND JUST BY DOWN THE
UNFUNDED LIABILITY BE DONE WITH
IT AS OPPOSED TO LETTING IT GROW?
IS THAT A FAIR QUESTION.
ON ON UNFORTUNATELY MISTER CHAIR
I PERSONALLY -- AM NOT -- I
THINK WELL VERSED ENOUGH IN THIS
PARTICULAR ISSUE AT ALL AFTER
OVER TO OUR EMPLOYEE
COMPENSATION FROM.
WELL AS COASTERS OKAY SO
ALTHOUGH I DON'T CONTROL THE
STATE BUDGET SO WHAT WE IF WE
TAKE TO AN EIGHT MILLION IT
WOULD REDUCE THAT AND WE COULD
ALLOCATE YOU CAN ALLOCATE THAT.
TO TO THAT PIECE AND THEN ON THE
BOOKS WE WOULD SHOW THERE'S NO
MORE.
UNFUNDED FOR THAT PIECE.
THE ONE THING WE ALWAYS HAVE TO
KEEP IN MIND IS THE ASSETS WE
HAVE ARE AT RISK.
IN THE EQUITY MARKET SO WE MAY
SEE IT AGAIN.
SO YOU MAY SEE AGAIN OR YOU MAY
SEE SURPLUSES SO WHAT HAPPENED
IN -- LATE NIGHT -- NINETEEN
NINETIES TWO THOUSAND THEY WERE
JUST TREMENDOUS SURPLUSES
BECAUSE OF INVEST RETURNS AND SO
THAT'S ALSO A POSSIBILITY SO IT
CAN GO EITHER WAY.
I GUESS YEAH.
THE GREATER ANY QUESTIONS
[inaudible]
EXCELLENT PRESENTATION.
THANK YOU GERMAN.
WITH THIS IS AN OPEN ITEM
BECAUSE IT'S ALSO GOING TO BE
HEARD FOR THOSE IN THE AUDIENCE
AND BUDGET SUBCOMMITTEE NUMBER
FOR STATE ADMINISTRATION LOCAL
GOVRNMENTS AND WE WILL REVISIT
THIS -- AT A LATER DATE WITH
RESPECT TO THE SPECIFIC
PROPOSALS INVOLVED.
THANK YOU VERY MUCH.
LET'S TURN -- TO ITEM. SIX THREE
FIVE ZERO OFFICE OF PUBLIC
SCHOOL CONSTRUCTION ISSUE NUMBER
FOUR K. THROUGH TWELVE SCHOOL
FACILITIES.
IN THIS WILL BE AN ITEM THAT WE
ALSO HOLD OPEN BUT WE WERE HERE
TODAY [inaudible]
SO WELL.
LADIES AND GENTLEMEN IF YOU WILL
IDENTIFY YOURSELVES STARTING TO
MY LEFT YOU'RE RIGHT.
MA'AM [inaudible]
THAT'S RICH.
MRS SILVERMAN I'M EXECUTIVE
OFFICER OF THE OFFICE OF PUBLIC
SCHOOL CONSTRUCTION.
KEITH IS ON DEPARTMENT OF
FINANCE SISTERS -- THANKS FOR
JOINING US.
AND COUPON AGAIN WITH THE LEGEND
LESS OFFICE -- YOU'RE STAYING
WITH US.
EMILY ALSO WITH THE LEGISLATIVE
ANALYST'S OFFICE.
THANK YOU ALL WHAT'S TO START.
A GOOD START -- THANK YOU FOR
HAVING US HERE -- MY SOLVE AS
YOU KNOW THE THE GOVERNOR'S
BUDGET -- I'M SORRY THE VOTERS
APPROVED PROPOSITION FIFTY ONE
IN TWO THOUSAND SIXTEEN
AUTHORIZING THE SALE OF SEVEN
BILLION DOLLARS IN -- BOND
FUNDING TO SUPPORT SCHOOL
FACILITIES -- AND OF THAT AMOUNT
THREE BILLION WAS FOR NEW
CONSTRUCTION THREE BILLION FOR
MODERNIZATION AND FIVE HUNDRED
MILLION EACH -- FOR KERR CREE
TECHNICAL EDUCATION FACILITIES
AND CHARTER SCHOOL FACILITIES --
DA OFFICE OF PUBLIC SCHOOL
CONSTRUCTION -- VIA ARE ACTUALLY
STATE ALLOCATION BOARD THE STAFF
BY THE OFFICE OF PUBLIC SCHOOL
CONSTRUCTION -- AT THE
DEPARTMENT GENERAL SERVICES IN
TWO THOUSAND SEVENTEEN EIGHTEEN
DISPERSED FIVE HUNDRED SIXTY
FIVE MILLION OF THESE BOND FUNDS
IN THE CURRENT YEAR -- WE'RE
ESTIMATING THAT FIVE OR NINETY
FIVE MILLION WILL BE DISPERSED
AND THE GOVERNOR'S BUDGET
PROPOSES TO DISPERSE -- ONE
POINT FIVE BILLION DOLLARS -- IN
NINETEEN TWENTY AND THEN EACH
YEAR THEREAFTER UNTIL BOND
FUNDING IS EXHAUSTED -- TO MAKE
MEET THIS GOAL -- THE GOVERNOR'S
BUDGET ALSO INCLUDES -- TEN
POSITIONS AND ONE POINT TWO
MILLION DOLLARS TO SUPPORT THE
THE INCREASED WORKLOAD --
THERE'D BE NECESSARY TO PROCESS
THAT ENOUGH APPLICATIONS TO
DISPERSE THAT TARGET ONE POINT
FIVE BILLION DOLLARS IN
[inaudible]
TWO THOUSAND NINETEEN TWENTY I'M.
WITH REGARDS TO DEBT SERVICE --
OBVIOUSLY A GENERAL OBLIGATION
BONDS ARE NOT FREE -- THERE'S
THE PRINCIPAL AND INTEREST IS
PAID OVER A THIRTY YEAR
AMORTIZATION PERIOD -- AND IN --
TWO THOUSAND NINETEEN TWENTY
THAT THAT SERVICE FOR
PROPOSITION FIFTY ONE AS WELL AS
NUMEROUS PREVIOUS SCHOOL
FACILITY BONDS -- IS ESTIMATED
WE TWO POINT THREE BILLION
DOLLARS -- OF THE ONE POINT FIVE
MILL BILLION THIS PROPOSED TO BE
DISPERSED IN -- NINETEEN TWENTY
THERE WOULD BE A ANNUALIZED THAT
SERVICE OF EIGHTY FOUR MILLION --
AND OVER THAT THIRTY YEAR PERIOD
WOULD BE APPROXIMATELY TWO POINT
FIVE BILLION DOLLARS SO IT'S
ABOUT SIXTY MILLION PER ONE
BILLION.
A BINDER.
I DEPENDS ON INTEREST RATE -- SO
THE THE NUMBER I'M QUOTING IS
BASED ON A THREE POINT 75%
INTEREST RATE WHICH WOULD BE --
FIFTY SIX MILLION PER BILLION
DOLLARS IN DEBT SERVICE PER YEAR
OVER THE THIRTY YEAR.
PERIOD -- SO THE STATE STATE
BONDS ARE -- OF COURSE NOT THE
ONLY -- FUNDING THAT'S AVAILABLE
TO PAY FOR SCHOOL FACILITY COSTS
THERE HAVE BEEN -- OVER ONE
HUNDRED FOURTEEN BILLION DOLLARS
AND A LOCAL BOND A GENERAL
AVIATION BONDS AUTHORIZED BY
LOCAL VOTERS -- AS WELL AS
ELEVEN BILLION DOLLARS IN ON
DEBTS -- DEVELOPER FEES THAT
HAVE BEEN COLLECTED FROM
RESIDENTIAL AND COMMERCIAL
DEVELOPMENT AND THE THE LOCAL
THAT SERVICE FIGURES FROM THE
CALIFORNIA DEBT AND IN
INVESTMENT ADVISORY.
COMMITTEE COMMISSION -- SO WITH
THAT AND THE THOSE OF THE OTHER
FUNDING -- SOURCES THAT ARE
AVAILABLE THERE'S ALSO OTHER
PARCEL TAXES ARE AVAILABLE THEY
WERE MUCH SMALLER -- DOLLAR
FIGURES BUT THESE ARE THE
PRIMARY FUNDING SOURCES ARE
AVAILABLE -- TO TO MEET THE
SCHOOL FACILITIES OF THE K.
TWELVE SCHOOLS IN CALIFORNIA.
CONCLUDE MY REMARKS DO WE HAVE
ANY IDEA AS TO WHAT THE TOTAL
NEED IN THE STATE IS.
NOTWITHSTANDING WHAT THE BONDS
ARE THAT HAVE BEEN ISSUED --
AUTHORIZED.
NOT TO MY KNOWLEDGE -- THERE
ISN'T AN INVENTORY -- OF YOU
KNOW.
THE UNDER THE ALL THE SCHOOL
FACILITIES THAT EXIST THAT EACH
WITHIN EACH K. TWELVE AND SEE --
AND I DON'T THINK THERE'S THERE
ISN'T AN INVENTORY OF TURN TERMS
OF GE AND AND THE SILLY UPGRADE
COST BUT TO THE EXTENT.
DISTRICTS ARE SUBMITTING
APPLICATIONS THAT WE DO HAVE
SOME INFORMATION -- IN REGARDS
TO THOSE PARTICULAR DISTRICTS
BUT NOT AN OVERALL INVENTORY OF
THE OVER ONE THOUSAND SCHOOL
DISTRICTS AND AND I ONE THOUSAND
CHARTER SCHOOLS.
WE'LL HEAR FROM THE OFFICE OF
PUBLIC SCHOOL CONSTRUCTION BUT I
GUESS THE THE ACCURACY OF THAT
DATA WILL WILL DEPEND ON WHETHER
THEY CONTINUE TO ACCEPT
APPLICATIONS.
EVEN AFTER BOND FUNDS HAVE BEEN
EXHAUSTED OR WHETHER THERE'S A
STOP AND IF IF THEY IF THE
APPLICATIONS CONTINUE TO FLOW AT
SOMEPOINT WILL HAVE A PRETTY
GOOD IDEA OF WHAT THE NEED IS.
FOR THE SCHOOL DISTRICTS THAT GO
TO THE TROUBLE OF PUTTING AN
APPLICATION TOGETHER -- KNOWING
THAT THERE'S NO MONEY IN THE POT.
BUT I I WHAT YOU'RE SAYING IS IS
NO OVERALL STATEWIDE INVENTORY
OF NEED AND I GET THAT.
GOOD AFTERNOON MR CARE EMILY
WITH THE LEGISLATIVE ANALYST'S
OFFICE ARE YOU SHOULD HAVE
RECEIVED A HANDOUT THAT WILL BE
REFERENCING THERE ARE
PRESENTATION.
THIS AFTERNOON AND WILL COVER
THE GOVERNOR'S PROPOSED BOND
SALE FIRST AND THEN MOVE ON TO
THIS IS NEEDED STAFFING PROPOSAL.
THIRTEEN ON PAGE ONE JUST TO
PROVIDE SOME QUICK BACKGROUND AT
IN SCHOOL DISTRICTS SHARE THE
COST OF BUILDING NEW SCHOOL
FACILITIES AND RENOVATING OLD
ONES.
THE STATE COVERS THAT SHARE
USING VOTER APPROVED GENERAL
OBLIGATION BONDS AND THIS
FUNDING IS AWARDED TO DISTRICTS
THROUGH THE STATE'S LONGSTANDING
SCHOOL FACILITY PROGRAM.
DISTRICTS COVER THEIR SHARE
THROUGH LOCAL BONDS.
MOVING ON TO PAGE TWO AT THE
DEPARTMENT OF FINANCE ALREADY
COVERED PROPOSITION FIFTY ONE
WHICH WAS PASSED IN.
SIXTY SEVEN SIXTEEN BRIEFLY I
THINK WE'LL JUST MENTION.
THAT AT THE PREVIOUS BASED ON
THE PREVIOUS TWO INSTALLMENTS OF
PROPOSITION FIFTY ONE BONDS
WHICH I WERE UNDER SIX HUNDRED
MILLION FOR EACH YEAR.
THIS SET THIS SEAT ON A PIECE TO
EXHAUST PROPOSITION FIFTY ONE
FUNDS AND IN TWELVE YEARS -- AT
THE SAME TIME THE STAE HAD A
GROWING BACKLOG OF SCHOOL
FACILITY APPLICATIONS WITH ONE
POINT FIVE BILLION IN
APPLICATION STILL WAITING
PROCESSING.
AND LIVING AT THIS PAGE.
THREE THE WE RECOMMEND THE
LEGISLATURE ADOPT THE GOVERNOR'S
PROPOSAL TO SELL THE ONE POINT
FIVE BILLION IN SCHOOL BONDS FOR
NINETEEN TWENTY THIS PROPOSAL
WOULD ALLOW THE STATE TO MORE
QUICKLY FIND PROJECTS WAITING IN
THE PIPELINE.
AND IS CONSISTENT WITH THE LEVEL
OF BOND SALES LEGISLATURE
DISCUSSED IN THE BUDGET HEARINGS
LAST YEAR AT THIS PACE IT WOULD
TAKE A TOTAL OF SIX YEARS TO
EXHAUST PIPE POSITION. FIFTY ONE
FUND.
STARTING ON PAGE FOR HOW WE MOVE
ON TO THE GOVERNOR STAFFING
PROPOSAL TO SUPPORT THE PROPOSED
INCREASE BOND SALES.
AS YOU CAN SEE IN THE FIGURE ON
PAGE.
FOUR THERE ARE THREE MAIN
AGENCIES INVOLVED IN THE SEATS
REVIEW PROCESS FOR OF A SCHOOL
FACILITY PROGRAM.
THE DEPARTMENT OF EDUCATION
REVIEWS THANK APPROVAL AND PLANS
FOR EDUCATIONAL PURPOSES.
THAT DIVISION OF THE ARCHITECT
REVIEWS PLANS FOR SAFETY AND
ACCESSIBILITY CONCERNS.
AND OFFICE THE PUBLIC SCHOOL
CONSTRUCTION OPSEC PROCESSES
SCHOOL FACILITY APPLICATIONS TO
DETERMINE FACILITY -- FUNDING
ELIGIBILITY AND THE PRESENTS
PROJECTS TO THE C. ALLOCATION
BOARD FOR APPROVAL.
CURRENTLY -- PSE HAS FIFTY TWO
AUTHORIZED POSITIONS HALF OF
THEM ARE SIGNS TO THE AUDIT
DIVISION AND THE OTHER HALF ARE%
ASSIGNED TO THE PROGRAM SERVICES
DIVISION.
THE PROGRAM SERVICES DIVISION IS
RESPONSIBLE FOR PROCESSING
APPLICATIONS AS WELL AS HANDLING
APPEALS.
PROGRAM POLICIES AND
ADMINISTRATIVE SERVICES.
MOVING ON TO PAGE.
FIVE THE GOVERNOR PROPOSES TO
PROVIDE A ONE POINT TWO MILLION --
I ONGOING AUGMENTATION FOR OPSEU
TO HIRE TEN ADDITIONAL STAFF FOR
APPLICATION PROCESSING THIS
WOULD INCLUDE EIGHT ANALYSTS
INTO MANAGERS.
THE AD AUGMENTATION WOULD COME
FROM PROPOSITION FIFTY ONE FINDS.
WE HAVE THREE MAIN CONCERNS WITH
THE STAFFING PROPOSAL.
FIRST WE BELIEVE OPSEU DEDICATES
TI FEW STAFF TO APPLICATION
PROCESSING.
CURRENTLY ONLY TEN FULL TIME
EQUIVALENT EMPLOYEES OUT OF THE
FIFTY TWO AUTHORIZED POSITIONS
ARE DEDICATED TO THIS CORE
FUNCTION.
THIS IS LESS THAN 20% OF ALL
PHYSICIANS.
SECONDLY WE HAVE A RELATED
CONCERN AT THAT THE REQUESTED
TEN NEW POSITIONS IS MORE THAN --
PSE MAY NEED USING OPIATES OWNED
LOGIC AND ASSUMPTIONS USED IN
THE STAFFING PROPOSAL WE
ESTIMATE THAT THE ONE POINT FIVE
BILLION IN APPLICATIONS COULD BE
PROCESS WITH TWELVE EMPLOYEES.
THIS IS ONLY TWO MORE THAN OPC
CURRENTLY DEDICATES TO THIS
FUNCTION WHEN WE BROUGHT UP TO
THIS DIFFERENCE OPC INDICATED TO
US THAT THERE IS AN ADDITIONAL
WORK ASSOCIATED WITH PROCESSING
APPLICATIONS.
I AM SUCH AS UPDATING
ELIGIBILITY FOR THE PROGRAM AND
HANDLING APPEALS NEVER THE LESS
WE HAD CONCERNS THAT THE
STAFFING PROPOSAL DIDN'T INCLUDE
THESE ADDITIONAL WORK.
AND IS ADDITIONAL WORK WOULD
HAVE TO BE RATHER HIGH RELATIVE
TO THE CITED TIME SPENT
PROCESSING APPLICATIONS TO
POTENTIALLY JUSTIFY TEN NEW
POSITIONS.
FINALLY WE BELIEVE SOME
POSITIONS CAN BE REDIRECTED FROM
PROCESSING APPLICATIONS.
OUR TO PROCESSING APPLICATIONS
FROM -- PC'S AUDIT DIVISION IN
THE PAST OPSEU WAS RESPONSIBLE
FOR AUDITING PROJECTS TO ENSURE
THAT THEY COMPLY WITH PROGRAM
REGULATIONS AND THAT PROJECT
PROPOSALS ORIGINALLY APPROVED.
IN IT AT TWO THOUSAND SEVENTEEN
EIGHTEEN THE SEAT DEVOLVED TO
THESE AUDIT RESPONSIBILITIES TO
LOCAL INDEPENDENT AUDITORS
WITHOUT ANY CORRESPONDING STAFF
REDUCTION TO OBESITY.
WE RECOGNIZE THAT A P. C. HAS
SOME WORK ASSOCIATED WITH
TRANSITIONING THOSE
RESPONSIBILITIES AND IS STILL
WRAPPING UP SOME PROJECT.
HOWEVER AUDITING IS NO LONGER A
CORE FUNCTION OF THIS AGENCY YET
TWENTY FOUR POSITIONS ARE ALMOST
HALF OF ALL POSITIONS ARE STILL
HOUSED IN AUDIT DIVISION.
WE RECOMMEND THE LEGISLATURE
REJECTS THE OPC STAFF AND
PROPOSAL BECAUSE WE FIND OKAY AS
HE CAN MANAGE THE NEW WORKLOAD
WITHIN EXISTING RESOURCES.
AND THAT CONCLUDES MY REMARKS
AND I WOULD BE HAPPY TO ANSWER
ANY QUESTIONS THANK YOU.
LET ME JUST THROW THIS OUT.
TO THE BROTHER OF FINANCING --
PSE BECAUSE A MEMBER OF THE NEXT --
I ASSUME WITHOUT REALLY KNOWING.
THAT WHEN A PROPOSAL TO ADD --
TEN F. TEASES TEN TEN F. FEES
IS PROPOSED THERE'S SOME SORT OF
MANPOWER STUDY THAT GOES ON I
MEAN HAS IT HAS IT BEEN A
MANPOWER STUDY.
DONE INSIDE -- PSE TO EVALUATE
WHICH WHAT EACH OF THE FUNCTIONS --
DOES.
AND HOW LONG IT TAKES TO DO IT.
TO DETERMINE THE NUMBER OF MAN
HOURS NECESSARY TO ACCOMPLISH
VARIOUS TASKS AND THEN CORRELATE
THAT THE TOTAL OF TV'S AND THEN.
THE INCREASE.
I YOU DON'T NECESSARILY HAVE TO
ANSWER RIGHT NOW AS WELL THROW
THAT OUT.
YOU MAKE COVERAGE MA'AM.
YES ACTUALLY SOMEBODY TO WRITE
THAT WAS ACTUALLY PROVIDED TO AS
FAR AS OUR BUDGET.
CHANGE PROPOSAL SO YEAH THAT'S
STUDY WAS PERFORMED AND THERE'S
OTHER FUNCTIONS THAT WE DO
OUTSIDE OF THE CORE.
FUNCTIONS OF PROCESS A NEW
CONSTRUCTION GRANTS AND
MODERNIZATION GRANTS -- THERE'S
OTHER PROGRAM GRANTS CAREER TECH
ITS CATION PROGRAM GRANTS THAT
THERE'S TWO HUNDRED FIFTY
MILLION DOLLARS LEFT OUT OF THE
ORIGINAL -- PROPOSITION FIFTY
ONE PROPOSAL THEIR CHARTER
SCHOOL -- PROGRAM GRANTS THAT
ARE ALSO -- MANAGED BY THE
PROGRAM.
THERE IS -- OTHER ITEMS THAT WE
STAFF TO STAY LOCATION BOARD --
RELATED TO A FACILITY HARDSHIP
PROGRAM GRANTS THERE'S GRANT
AGREEMENTS THEIR ADDITIONAL
WORKLOAD THAT WAS BROUGHT ON AS
AS THAT ADDITIONAL.
OF GRANT ACCOUNTABILITY PROGRAM
GRANTS AS FAR AS A AGAIN TO
ENSURE GREATER ACCOUNTABILITY
FOR THE PROGRAM AND THOSE ARE
PROCESSED.
IN ADDITION TO A APPROVING YOUR
PROJECTS -- AGAIN THEY'R SMALL
PROGRAMS THERE'S ALSO GRABBED
ADDITIONAL REGULATIONS THERE'S
AN ADDITIONAL PROGRAM THEY CAME
AND FILLED A CANDOR.
AND AGAIN THERE'S A GENDER
PUBLICATION SO THERE'S A WHOLE
HOST OF OTHER WORKLOAD THAT'S
ASSOCIATED WITH OUR BOARD
AGENDAS SO AGAIN WE DID A FULL
STUDY OF OUR PROGRAM AND IT DID
WARRANTED TEN ADDITIONAL STAFF.
WHAT WHAT?
WHAT IS YOUR RESPONSE TO THE
COMMENTS ABOUT THE AUDIT?
TO STEPHANIE AUDIT TEAM VIS A
VIS OLD RESPONSIBILITIES NEW
RESPONSIBILITIES AND I THINK THE
REFERENCE WAS TO TWENTY FOUR OF
TEAS.
YEP WALL ONE CLARIFY THAT SO --
IT'S ACTUALLY CORRECT THAT -- AS
FAR AS WHAT WAS ADOPTED IN THE
TWENTY SEVENTEEN BUDGET -- THE
LOCAL AUDIT RESPONSIBILITIES DID
SHIFT.
BUT WE STILL HAVE -- THERE IS
STILL.
OTHER AFTER WORKLOAD SO.
PRIOR TO THAT SHIFTY AND THEY'RE
STILLTWO HUNDRED FIFTEEN CLOSE
OUT AUDIT SYSTEM HAVE TO PERFORM
BUYER AUDIT STAFF -- SO THAT
STILL ONGOING WORKLOAD THAT WE
STILL HAVE -- EVEN THOUGH THE
LOCAL AUDIT DID SHIFT THEY'RE
STILL SUBJECT MATTER EXPERTS --
THERE ARE THE K. TWELVE AUDIT
GUIDELINES IS STILL HAD TO BE --
ADOPTED AND OF DEVELOP FIRE
AUDIT TEAM -- THAT ALSO ENTAILED --
WILL STILL BE PART OF OF WORKING
GROUP MOVING FORWARD SO ANY
ADDITIONAL CHANGES TO THE K.
TWELVE AUDIT GUIDE THERE WILL BE
RELYING ON OUR STAFF. TO A
DOCTOR'S ADDITIONAL CHANGES
THERE IS ALSO AN ADDITIONAL
COUPON OF EDUCATION AND OUTREACH
TO THE LOCAL AUDITOR'S -- ALSO
TO THE ALLEY ETS OTHER WE RELY
IN OUR OUR STAFF -- TO PERFORM
SOME REVIEWS OF A CURSORY
REVIEWS TO ENSURE THAT THEY'RE
IN COMPLIANCE WITH THE RICOTTA
REQUIREMENTS THIS EDUCATION AND
OUTREACH TO THOSE FOLKS.
THERE'S ALSO THE BE IN PROGRESS
PERFORMANCE CHECKS THAT ARE
GONNA BE THE LOCAL WATER
REQUIREMENTS SO AS WE MOVE%
FORWARD -- THERE'S GOING TO BE
THAT BACKING COMPLIANCE JACK --
THE PROJECT WILL HAVE IT IN
PROGRESS PERFORMANCE SHOCK THAT
ARE GONNA BE PERFORMED BY OUR
STAFF SO AGAIN THE THE AUDIT
WORKLOAD DIDN'T DIMINISH -- WE
STILL HAVE THE CORE
RESPONSIBILITY TO CONTINUE THESE
TRACKS SO FINANCE WITH A B. C.
P. IS OF IS SUBMITTED FOR AN
INCREASE IN F. T. E.'S AND
THERE'S I ASSUME SOME WORKSHEETS.
THAT'S COMPLETED IS THERE ANY
SORT OF INDEPENDENT CHECK OF THE
ASSESSMENT ANALYSIS DONE BY THE
THE DEPARTMENT OR IN THIS CASE.
THE OFFICE -- WITH BACK TO THE
NUMBER.
YES CERTAINLY -- YOU KNOW AS
PART OF THE YOU KNOW FALL.
PROCESS WE WOULD NEVER RECEIVED
BCP'S FROM DEPARTMENTS WE LOOK
AT THEIR CURRENT RESOURCES AND
WE LOOK AT WHAT NEW WORKLOAD IS
GOING TO BE INCOMING.
AND WE WE WE COULD WE LOOK AT
ALL THE FACTORS THAT EXIST I
MEAN THIS IS A BOB IS A PUBLIC
SCHOOL CONSTRUCTION -- HAS BEEN
FUNDED.
YOU KNOW FIFTY TWO POSITIONS FOR
THE PAST FOUR YEARS -- PRIOR
PRIOR -- TO WHAT DURING THE
DURING THE PEAK -- BOND ISSUANCE
PERIOD WHEN WE'RE ISSUE IN TWO
TO THREE BILLION DOLLARS EVERY
YEAR THIS OFFICE WAS STAFF THAT
OF TWO HUNDRED FIFTY POSITIONS --
RECENTLY THERE THEY WENT DOWN TO
NINETY NINE BACK IN -- TWO
THOUSAND THIRTEEN AND SO THIS
FIFTY TWO POSITION -- FUNDING
LEVEL A RESOURCE LEVEL IS IS A
REFLECTION OF BASELINE WORKLOAD
IS NECESSARY TO KIND OF HANDLE
THE THE THE ALL PREVIOUS BONDS
THEY'VE BEEN DISPERSED AND THEN
THE WORKLOAD THAT GOES THEIR
STAFF AND ALLOCATION BORDERS IN
REFERENCE -- AND CERTAINLY.
AS WE ADDED -- AS PROPERTY ONE
WAS PASSED YOU KNOW AND OF IN
THE FIRST YEAR AND NOW AND GOING
TO THE SECOND YEAR BOND ISSUANCE.
THERE THERE HAS BEEN AN INCREASE
IN RESOURCES FOR THE OFFICE AND
WE RECOGNIZE THAT THEY HAVE HAD
TO RE DIRECT FROM OTHER CORE
RESPONSIBILITIES TO ACHIEVE THE
TARGETS THAT WE'VE LAID OUT FOR
THEM IN TERMS OF THE AMOUNT THAT
WAS ISSUED AND SEVENTEEN
EIGHTEEN AND THE GOLD IS --
BEING AT THE OF A FIVE OR NINETY
FIVE MILLION IN THE CURRENT YEAR
SO YES WE WE REVIEW ALL ASPECTS
OF THEIR THE THE PROGRAM AND AND
WITHOUT THE TEN POSITIONS WAS
WARRANTED IN IN ORDER TO MEET
THAT TARGET.
AND IN ALSO TO MAKE SURE THAT
YOU KNOW THE DATES BECAUSE THERE
ARE IT'S THERE ARE STATUTORY AND
REGULATORY -- REQUIREMENTS IN
TERMS OF REVIEWING APPLICATIONS
TO MAKE SURE THAT -- THAT
SCHOOLS ARE ELIGIBLE TO MAKE
SURE THAT THE THE COSTRUCTION
PROJECTS.
DENTAL FOR THE RESULT BASED ON
YOU KNOW NOT A A LACK OF A
THOROUGH REVIEW SO WE RECOGNIZE
THAT THERE IS IMPORTANT WORK.
THERE IN ORDER TO MEET THE
TARGET OF ONE POINT FIVE BILLION.
WHEN I'M NOT BEING CRITICAL I?
I COME OUT OF THE MILITARY
ALTHOUGH THAT'S BEEN A LONG TIME
AGO BUT I REMEMBER WE USED.
TO PERIODICALLY GET THESE TEAMS
IT WOULD DESCEND ON US AND THEY
WERE CALLED MANPOWER SOMETHING
TEAMS AND THEY COME INTO OUR
WORKPLACE AND THEY TAKE A LOOK
AT WHAT WE DO AND WE DO OUR
WORKSHEETS AHEAD OF TIME AND
THEY COME IN AND WATCH WHAT WE
DO AND ASK.
A BUNCH OF QUESTIONS AND TAKE
OUR WORKSHEETS AND DECIDE
WHETHER -- WE WERE RIGHT OR
WRONG AND SOMETIMES YOU WOUND UP
WITH MORE PEOPLE AND SOMETIMES
YOU ONE OF THE LESSON.
THAT WAS THE DEPARTMENT OF
DEFENSE MESSAGE AND THAT'S WHY I
WAS ASKING HOW WE DO IT IN THE
STATE SO.
IF WE DO SOME VERSION OF THAT
THEN.
THAT'SGOOD I WOULD ASK WELL LET
ME THIS IS QUESTION YOU MAY HAVE
HEARD MY COLLEAGUE COMMAND.
AT THE VERY BEGINNING OF THIS
SUBCOMMITTEE HEARING AND SUGGEST
FROM HIS PERSPECTIVE THAT WE
SHOULD I GUESS SO ALL THE
REMAINING BONDS.
AND PUSH THOSE PROJECTS OUT AS
QUICKLY AS POSSIBLE.
IF THAT WERE TO HAPPEN.
WHAT WOULD BE THE IMPACT ON ON
THE OFFICER YOU MANNED
APPROPRIATELY FOR THAT -- AND
FINANCE WHAT WOULD BE THE IMPACT
MáS WILL TALK ABOUT HIS
PROPOSAL WHAT WOULD BE THE
IMPACT ON THE STATE AND THE
DEPARTMENT OF FINANCE IF THAT
WERE TO HAPPEN.
TECHNICALLY I'M NOT WE'RE NOT
MAN FOR THAT EVEN AT OUR CURRENT%
LEVELS AND EVEN AT TEN
ADDITIONAL POSITIONS WE WERE NOT
MEANT FOR THAT WHAT WOULD YOU
HAVE ANY IDEA OR ANY PROJECTIONS
AS TO WHAT.
ADDITIONAL F. T. EASE YOU WOULD
NEED IN ORDER FIVE BILLION IT'S
IT'S IT'S IMPOSSIBLE TO EVEN
IMAGINE BECAUSE EVEN IF YOU HAVE
STAFF THAT FOR THAT FIVE BILLION
DOLLAR WORKLOAD.
YOU WOULD STILL HAVE TO HIRE AND
TRAIN FOLKS AND FOR TEN
POSITIONS TO HIRE WHAT TO PUT
OUT THE ONE POINT FIVE BILLION.
YOU WOULD ALMOST HAVE TO TRIPLE
THAT IT'S JUST AN ESTIMATE.
AND THEN YOU WOULD HAVE TO TRAIN
AND HIRE FOLKS AND IT TAKES.
AT LEAST EIGHTY MONSTER FOLKS TO
BE PROFICIENT -- SO WHAT TIME
YOU HIRE FOLKS AND GET THEM FISH
THEY PUT OUT THAT WORKLOAD THEN
YOU'RE AT LA OFF MODE.
SO YOU'LL BE DIFFICULT TO HIRE
FOLKS IN THAT SHORT PERIOD TIME
AND TO PUT OUT THE FUNDS IN A
TWO YEAR PERIOD.
AND THEN TURN AROUND AND LEAVE
OAKS OFF SO THAT THAT WOULD BE
DIFFICULT BILLS.
AND FROM THE DEBT SERVICE
STANDPOINT FINANCE RIGHT WE
WOULD ECHO EXACTLY WHAT -- LISA
MENTION IN TERMS OF THEIR
CAPACITY AND YOU KNOW HIRING IN
AND LAY OUT STILL OCCUR BUT JUST
IN TERMS OF PRACTICAL DEBT
SERVICE COSTS I MEAN THE THE THE
GOVERNOR'S BUDGET INCLUDES AN
ASSUMPTION OF DEBT SERVICE -- IN
IN OUR MULTI YEAR ESTIMATES
BASED ON ONE POINT FIVE BILLION
DOLLARS GOING ON IN NINETEEN
TWENTY THE EXTENT.
SOMEHOW WE WERE ABLE TO DISPERSE
FIVE BILLION DOLLARS WHICH WE
DON'T THINK THERE'S CAPACITY DO
THAT BASED ON THE NUMBER STAFF
IT'S AVAILABLE -- THE FIRST
YEAR'S DESERT HAS ROUGHLY WOULD
BE ABOUT TWO HUNDRED FIFTY
MILLION DOLLARS IN AN ADDITIONAL
GENERAL FUND THAT IN THE SECOND
YEAR IT WOULD BE SLIGHTLY LOWER
THAN THAT AND THIRTY JUST.
IN COMPARISON TO THE PLANNED
DISBURSEMENT THAT WE'VE BUILT
INTO THE GOVERNOR SQUARE SO
THESE ARE GENERAL FUND COSTS
THAT WOULD NEED TO BE ABSORBED
IN IN SOME OTHER.
AREA OF THE STATE BUDGET.
I THINK THERE'S ONE OTHER
IMPORTANT ASPECT I WANTED TO
SHARE WITH YOU IS PART OF THE
EVEN THE GOVERNOR'S BUDGET OF
ONE POINT FIVE BILLION DOLLARS
OF PROCESSING APPLICATIONS.
THERE IS DISTRICTS THAT ARE
SEEKING FINANCIAL HARDSHIP
ASSISTANCE AND SO THAT'S THE
STATE MATCH PROGRAM AND SO PART
OF THAT MATCH BY REQUEST IS
ACTUALLY -- HAVING A FINANCIAL
REVIEW IN AND OUR ORDERS TO
PERFORM THAT FINANCIAL REVIEW
THERE'S AN ESTIMATE ABOUT THIRTY
FIVE DISTRICTS CURRENTLY THERE
WOULD BE REQUESTING THAT
FINANCIAL REVIEW SO OUR AUDITORS
WOULD HAVE TO DETERMINE.
HOW MUCH FUNDS AT THE DISTRICT
HAS AVAILABLE AT TO SEEK THAT
FINANCIAL ASSISTANCE SO WHETHER
NOT THE QUALIFIER THERE ELIGIBLE
FOR THAT FINANCIAL ASSISTANCE?
THAT IS A COMMON OUR AUDIT STAFF
TO MAKE THAT DETERMINATION SO
ABSENT OF HAVING THOSE AUDITORS
TO DO THAT FRONT IN REVIEW WOULD
BE.
PROCESSING THAT GRANT THAT FRONT
AND REQUEST FOR FOR STATE
ASSISTANCE AN INCUMBENT OF THE
OUR STAFF PROCESS IN THE THE
FUNDING APPLICATION SO THAT GOES
HAND IN HAND.
SO IF YOU START TRIMMING DOWN
THE AUDIT STAFF.
THEN YOU'RE NOT GONNA HAVE THE
CAPACITY TO ALSO PROCESS THE ONE
POINT FIVE BILLION APPLICATIONS
SO AGAIN I I THINK THAT WOULD BE.
OF A MISTAKE TO OVERLOOK THAT
THAT WORKLOAD AS WELL WELL THIS
IS A HOLD OPEN ITEM THAT WE WILL
BE REVISITING I GUESS WHAT I'D
ASK IS -- FOR THE OFFICE FINANCE
IN LA -- TO SORT OF GET TOGETHER
AND IF WE CAN -- COME TO SOME.
MUTUAL AGREEMENT ON THE NUMBER
OTHERWISE I GUESS WE'LL MAKE THE
DECISION AT SOME POINT IN TIME.
THAT MAKES SENSE [inaudible]
AND IN.
ACCESS ABSOLUTELY AND IN FRONT
OF ME AS ONE FINAL QUESTION IS
THERE SOME.
OF STRATEGIC PLAN IN TERMS OF
HOW TO ROLL UP THE REST OF THE
BOND MONEY AT ABSENT SOME DUMP
OF ADDITIONAL FIVE BILLION
DOLLARS RIGHT NOW.
YES OUR OUR CURRENT PLAN IS TO
DISPERSE ONE POINT FIVE BILLION
DOLLARS EACH YEAR AFTER NINETEEN
TWENTY UNTIL THE BOND FUNDS OR
SAUCES THAT BE THREE YEARS AND
THEN THERE BE MAYBE A THREE
HUNDRED MILLION LEFT.
IN THE FOURTH BUDGET PLUS. THREE
YOU PROBABLY SAID THAT I MISSED
AND I APOLOGIZE NO FROM.
WELL I HAVE NO FURTHER QUESTIONS
I WANT TO THANK YOU ALL FOR AN
EXCELLENT PRESENTATION AND LOOK
FORWARD TO HAVING YOU -- BACK.
LET'S GO AHEAD AND TAKE PUBLIC
COMMENT IS FOR BECAUSE I THINK
I'VE COVERED ALL THE ISSUES ON
THE AGENDA.
YES HELLO MY NAME IS JENNIFER
BESTER AND I'M A VOLUNTEER
RESEARCH DIRECTOR FOR EDUCATE
OUR STATE EDUCATE OUR STATE IS A
STATE WIDE GRASSROOTS PARENT LED
ORGANIZATION FOCUSED.
ON A QUALITY EDUCATION FOR EVERY
CALIFORNIA SCHOOL CHILD.
THANK YOU FOR A VERY WELL
DOCUMENTED AND WELL CONSIDERED --
REVIEW OF THE RESEARCH AND
ADEQUATE FUNDING.
POURTANT LEE DOCTOR LEVIN MISTER
BRUNO.
ARE YOUR YOUR OWN REPORT
RECOGNIZED THAT ACCOUNTING FOR
LOCAL COSTS.
IS A KEY ELEMENT IN ACHIEVING
ADEQUACY AND EQUITY. ELEVEN
YEARS AGO MICHAEL CURSED FORMER
PRESIDENT OF THE STATE BOARD OF
EDUCATION DID THE SAME THING.
IN THE LCF OF GROUP BLUEPRINT HE
RECOGNIZED THAT THEY WERE KEYED
ANY RATIONAL EQUITABLE SCHOOL
FINANCE SYSTEM.
BECAUSE LOCAL COSTS ARE IGNORED
NLC FF HOWEVER MAJOR DAMAGE IS
INFLICTED ON THE POOREST AND
MOST DISADVANTAGED DISTRICTS IN
OUR WEALTHIEST COUNTIES.
THE GOOD NEWS SENATOR ROCK.
IS THAT THERE IS IN FACT
SIGNIFICANT PROPERTY TAX REVENUE.
THAT IS ALLOCATED TO EDUCATION
IN THOSE MOST EXPENSIVE COUNTIES
THAT IS CURRENTLY BEING RE
DIRECTED TO OTHER USES.
THIS IS TAX REVENUE THAT COULD
COVER THE LOCAL COST DIFFERENCES
IN SAN FRANCISCO SAN MATTEO
MARIN SANTA CLARA.
BUT IT.
CANNOT DO SO NOW BECAUSE THE
STATE DOES NOT ACKNOWLEDGE THAT
DIFFERENCE.
IF THERE'S ANYONE HERE WHO WOULD
POINT TO SEVEN HUNDRED MILLION.
OF EDUCATION ALLOCATED PROPERTY
TAX THAT THEY DIDN'T WANT TO GO
EDUCATION I WOULD BE VERY
SURPRISED.
SO AND IT'S GROWING IT'LL
PROBABLY GROW A NUDGE ABOUT A
BILLION THIS YEAR AS A STATEWIDE
ORGANIZATION WE SEE IN THESE
HIGH COST AREAS.
DISTRICTS CAUGHT BETWEEN A ROCK
AND HARD PLACE OF ALL QUENEAU
AND A FLOOD AND LISTENING TO A
MISTER FINE.
I SEE THE DIFFERENCE BETWEEN
GOOD DISTRICTS DROWNING AND BAD
ONES EXPLODING.
SO WE HAVE TO MESH AND WE HAVE
THE OPPORTUNITY TO MASH THESE
THREE ISSUES IN THE MAY REVIVE
[inaudible]
EQUITY.
LOCAL COST OF LIVING.
AND SEVEN HUNDRED MILLION
DOLLARS OF EXCESS EDUCATION
ALLOCATED PROPERTY TAX.
I HOPE YOU WILL ACCEPT THAT AMIR
PARENT MIGHT KNOW SOMETHING
ABOUT THIS.
WE PREPARED AN ANALYSIS OF THE
FOUR HUNDRED AND FIFTEEN MILLION
OF EXCESS EDUCATION REVENUE THAT
WAS FOUND IN SAN FRANCISCO IN
NOVEMBER.
IF I MAY PRESENTED THANK YOU --
TO MS NGUYEN IF THERE'S ANY
CHANCE YOU BE WILLING TO LISTEN
TO OUR FULL.
OF THOUGHTS ABOUT THIS WE WOULD
BE SO GRATEFUL TO SHARE THEM
WITH YOU THANK YOU VERY MUCH
THANKS FOR SHARING.
SIR GOOD AFTERNOON SENATOR ROBB
THEIR CLINICS ON BEHALF OF THE
SMALL SCHOOL DISTRICT BECAUSE HE
ASIAN -- I WANT TO SPEAK FIRST
ON THAT PENSION ISSUE WE TALKED
ABOUT A NUMBER OF DISHES
DIFFERENT ISSUES RELATED
PENSIONS -- DURING THIS HEARING
BUT THE ONE POINT THAT I REALLY
WANT TO DRIVE HOME NOT JUST FOR
SMALL BUT THE VAST MAJORITY OF
OUR SCHOOL DISTRICT CLIENTS THAT
WE REPRESENT.
IS THAT THE THREE BILLION DOLLAR
CAL STIRS PROPOSAL.
IN SPITE OF THE MANY OTHER GREAT
PROPOSALS THAT ARE OUT THERE
MAYBE THE MOST SIGNIFICANT
PROPOSAL AS PART OF THE K.
TWELVE BUDGET THIS YEAR.
AND THE REASON IS NOT
NECESSARILY BECAUSE IT'S RELATED
PENSIONS WE BECAUSE IT'S THREE
BILLION DOLLARS ABOVE AND BEYOND
THE MINIMUM GUARANTEE FOR
PROPOSITION.
NINETY EIGHT PEOPLE OFTEN JOKE
THAT THE I FLOOR THAT WAS
SUPPOSED TO BE CREATED BY PROP
NINETY EIGHT IS NOW ACTING LIKE
A CEILING WELL HERE WE HAVE AN
EXAMPLE OF GOING ABOVE AND
BEYOND THAT BY THREE BILLION
DOLLARS.
SO I JUST DON'T WANT TO TAKE IT
FOR GRANTED THAT BECAUSE IT'S SO
BROADLY SUPPORTED YOU'RE NOT
HEARING SUPPORT FOR IT -- I
THINK EVERYBODY IN LINE HERE
PROBABLY SUPPORT THE PROPOSAL
AND I WANT TO REITERATE THAT AND
THEN LASTLY ON THE FACILITIES
PROPOSAL NOT WITHSTANDING THE
GREAT PARNERS THAT WE DO HAVE
IT -- PSE IN THE GREAT WORK THAT
THEY DO WITH THEIR LIMITED STAFF
THE ONE EXPRESSED SUPPORT FOR
CENTER REQUIRES ALTERNATIVE
PROPOSAL -- ESPECIALLY IN SMALL
IN RURAL AREAS -- THAT MONEY
REALLY MAKES A BIG DIFFERENCE
AND IF WE CAN GET OUT TO THEM
FASTER THAT'S CRITICAL FOR THE
SCHOOLS THANK YOU.
THANK YOU IS FROM.
GOOD AFTERNOON JENNIFER BAKER
WITH THE CALIFORNIA TEACHERS
ASSOCIATION -- I DO WANT TO NOTE
THAT IF IF OUR MEMBERS HAVE OF
OUR RETIREMENT COMMITTEE AND
TEACHERS WERE LISTENING TO THE
CONVERSATION THAT TOOK PLACE IN
REGARD.
TO A DEFINED BENEFIT PENSIONS
VERSUS DEFINED CONTRIBUTION
PENSIONS AND THE CONVERSATIONS
ABOUT A RETIREE HEALTH THEY
WOULD BE VERY DISAPPOINTED --
AND UNFORTUNATELY I DON'T
BELIEVE THAT THEY WOULD FEEL
THAT THE PANEL WAS BIAS.
OR N.
SUPPORT OF DEFINED BENEFIT
PENSIONS AND RETIREE HEALTH IT
WHICH HE IT IS QUITE THE
CONTRARY YOU MAY PLEASE FOLKS IT
WE WOULD ASK THAT IF YOU'RE
GOING TO HAVE TO ASK QUESTIONS
ABOUT TEACHERS BENEFITS SUCH AS
RETIREMENT IN RETIREE.
HEALTH OBLIGATIONS THAT IT'S
DONE IN A WAY THAT'S FAIR IN
NEUTRAL -- AND NOT IN A WAY
THAT'S DEROGATORY TOWARDS
SOMETHING THAT
DISPROPORTIONATELY IMPACT WOMEN.
AND THAT'S ONE OF THE IMPORTANCE
OF HAVING WOMEN SITTING.
IN THE CHAIRS AND WE CERTAINLY
APPRECIATE STAFF IT'S IMPORTANT
TO UNDERSTAND WE'RE TALKING
ABOUT A GENDER EQUITY ISSUE AS
WELL BECAUSE 72% OF RETIRED OR
OF CAL STARS MEMBERS.
ARE WOMEN.
SO WHEN YOU START TALKING ABOUT
WELL LET'S TRY TO FIND A WAY TO
MAKE IT MORE AFFORDABLE FOR
RETIREE HEALTH OU'RE TALKING
ABOUT DISPROPORTIONATELY WOMEN.
BECAUSE WOMEN ALSO LIVE LONGER
SO THEREFORE THE DECISIONS THAT
YOU MIGHT BE WORKING TO
INFLUENCE.
ARE GOING TO DISPROPORTIONATELY
IMPACT WOMEN AND ELDERLY WOMEN
WHO LIVE LONGER STATISTICALLY
THAN ANY OTHER DEMOGRAPHIC IN
THE COUNTRY.
SO WE WOULD ASK THAT AS YOU'RE
REFLECTING ON THESE THAT YOU
ALSO PUT ON A LENDS A GENDER
EQUITY.
AND ASK THE QUESTIONS.
THAT -- YOU CAN CONSIDER THAT
MIGHT BE ABLE TO ENSURE THAT NOT
ONLY ARE ACTIVE TEACHERS BUT ARE
RETIRED TEACHERS ARE GOING TO BE
ABLE TO HAVE A SECURE LIVING.
BECAUSE HAVING A SECURE
RETIREMENT IS ONE OF THE MAJOR
ISSUES THAT ACTUALLY KEEPS
TEACHERS IN THE CLASSROOM THAT'S
ONE OF THE REASONS WHY TEACHERS
IN KENTUCKY.
HAD A STRIKE BECAUSE LEGISLATORS
AND NOT STATE WANTED TO
ELIMINATE DEFINED BENEFIT
PENSIONS AND MOVED TO RE DEFINED
CONTRIBUTION SYSTEM.
AND THE TEACHERS OF THAT STATE
SAID THAT'S NOT GOING TO WORK
FOR US PENSIONS ARE EXTREMELY
IMPORTANT SO WE WOULD ENCOURAGE
YOU NOT TO ENTERTAIN DISCUSSIONS
OF ELIMINATING A SECURE
RETIREMENT FOR CALIFORNIA'S
TEACHERS.
SPECIFICALLY BECAUSE THEY ARE
CONTRIBUTING MORE TO THEIR
RETIREMENT BENEFITS AS WELL AB
FOURTEEN SIXTY NINE IS WORKING
IT'S BEING IMPLEMENTED THE ISSUE
IS NOT ABOUT RETIREMENT FUNDING
THE ISSUE IS ABOUT A LACK OF
ADEQUATE EDUCATION FUNDING.
AND WE NEED TO FIND WAYS TO
pPARTICULARLY WHEN WE HAVE ONE OF
THE LARGEST ECONOMIES HAVE.
THANK YOU WELL I DON'T WANT YOU
TO MISINTERPRET WHAT.
OCCURRED HERE TODAY I DO HAVE
COLLEAGUES WHO HAVE QUESTIONS
ABOUT DEFINED BENEFIT PENSION
PLANS BUT I'M SURE THERE WITH --
AN EQUAL NUMBER OF NOT MORE WHO
DO NOT HAVE THE SAME QUESTIONS
BUT I ALLOW PEOPLE TO ASK
QUESTIONS IF THEY HAVE AN ISSUE
AND WANT TO ASK THEM.
ON THE SUBJECT OF RETIREE HEALTH
CARE AND VERTICALLY RETIREMENT
HEALTH CARE PROVIDED TO THOSE
WHO ARE SIXTY FIVE AND OLDER I
WOULD WELCOME ANOTHER
OPPORTUNITY TO HAVE.
OF THE SUBCOMMITTEE HEARING ON
THAT ISSUE JUST TO INFORM MYSELF
AS TO THE REASONS WHY -- FOR
EXAMPLE MEDICARE AND MEDICARE
SUPPLEMENT PROVIDED BY THE
DISTRICT AS AN OPTION IS IS
REJECTED IN SOME DISTRICTS IN
FAVOR OF A CONVENTIONAL A HEALTH
PLAN THAT CONTINUES ON BEYOND
AGE SIXTY FIVE IN THE COST
DIFFERENTIAL IN THAT.
OTHER MAYBE SOME ISSUES I MEAN
OBVIOUSLY THIS NOT FOR ME TO
DECIDE THESE ARE LOCALLY
NEGOTIATED -- ISSUES AND WE DO
NOT GET INVOLVED IN LOCAL
NEGOTIATIONS YOU KNOW CERTAINLY
IN THIS BUILDING.
FROM THIS POSITION BUT IT'S AN
INTERESTING ISSUE THAT SOME
DISTRICTS ARE FACING AND THIS
PORTION THAT PORTION WAS AN
INFORMATIONAL ITEM AND I'M
SIMPLY INTERESTED IN FINDING OUT
WHY -- WHY THE STAKEHOLDERS IN
CERTAIN DISTRICTS MAKE THE
DECISIONS THAT THEY DO AND WHAT
THE CONSEQUENCES ARE IF ANY?
AND IF THERE ARE NONE THAT I
GUESS WE CLOSE THE BOOK AND MOVE
ON TO ANOTHER ISSUE BUT I DO
APPRECIATE YOU COMING AND
STAYING TO THE HEARING AND
OFFERING YOUR COMMENTS AND I
LOOK FORWARD TO A FOR THE
CONVERSATION WITH YOU ON THE
SUBJECT.
THANK YOU.
GOOD AFTERNOON SERRA BOTCHES
WITH THE CALIFORNIA ASSOCIATION
OF SCHOOL BUSINESS OFFIIALS
BOTH IN SUPPORT OF ITEM THREE AN
ITEM FOR A FIVE REGARDING
INCREASING PROVIDING.
FUNDING FOR CUTS PENSION
CONTRIBUTIONS AS WELL AS
FACILITATING THE RELEASED THE
PROPOSITION FIFTY ONE DOLLARS.
REPRESENTING THE FOR THE SCHOOL
FISCAL SIDE WE REALLY ARE VERY
GRATEFUL AND THANKFUL FOR
TODAY'S CONVERSATION I THINK
AFTER THE POP PASSAGE OF PEPPER
WE HAVEN'T HAD AN IN DEPTH
CONVERSATION OF REALLY THE THREE
FOLD ON HOW WE ARE.
NEEDING THESE A LONG TERM
OBLIGATIONS AND PAYING DOWN OUR
DEBT AND SO WE WELCOME ANY
OPPORTUNITY WHERE WE COULD HAVE
REELS.
CHIEF BUSINESS OFFICERS AT THE
TABLE TO REALLY ENGAGE ON WHAT
OUR BEST PRACTICES HOW ARE WE
MITIGATING ALL OUR ISSUES.
IN LIGHT OF WHAT REALLY IS OUR
PRIMARY MISSION WHICH IS TO
SERVE OUR STUDENTS.
THANK YOU THANKS FOR COMING.
SENATOR ROBB NOT TO TRY TO
SUSPEND ALSO ON BEHALF OF THE
COALITION FOR ADEQUATE SCHOOL
HOUSING CASH -- YOU ASKED IF IF
THE ADMINISTRATION OR SOMEONE
COULD QUANTIFY FOR YOU THE
MAGNITUDE OF THE NEED I THINK
THE RESPONSE HE GOT WAS ACCURATE
AND THAT WE DO NOT HAVE A
STATEWIDE INVENTORY PER SE THAT
QUANTIFIES ALL OF THE NEW
CONSTRUCTION MODERNIZATION NEEDS.
BUT WE DO HAVE SOME INFORMATION
THAT THAT GUIDES US THAT WAY SO
WE DO KNOW FOR EXAMPLE THAT THE
BACKLOG OF PROJECTS ALREADY
PROCESS THAT THE STATE OF THE
STATE ALLOCATION BORDERS FOUR
POINT SEVEN EIGHT BILLION.
AND THAT -- THE MODERNIZATION OF
NEW CONSTRUCTION PROJECTS ARE
ARE NOW OVERSUBSCRIBED SO SIMPLY
IF YOU COUNT THAT ONE PROGRAM
AND ALL OF THE HOOPS THEY HAVE
TO GO THROUGH -- WE ALREADY KNOW
THAT THE NEED IS GREAT -- SINCE
199890% OF THE STATE SCHOOL
FACILITIES -- PROGRAM BOND FUNDS
HAVE BEN APPORTIONED WITHIN
FOUR YEARS OF PASSAGE OF THE
RESPECTIVE BOND AT THE CURRENT
RATE THE BUDGET PROPOSAL WILL
SET AN ALL TIME LOW OF ABOUT 50%
WITHIN FOUR YEARS -- WITH
QUALIFIED UP STILL WAITING IN
THE QUEUE UP AND WE THINK THAT
THEY CAN DO BETTER -- SO WE
SUPPORT MISTER MAGUIRE'S
PROPOSAL TO EXPEDITE A STATE
SCHOOL FACILITY PROGRAM
APPORTIONMENT AND IN ADDITION
CASH HAS OFFERED THE STATE
ALLOCATION BOARD -- PCIN THE
ADMINISTRATION SOMETHING THAT
THEY CAN DO WITHIN THEIR
EXISTING AUTHORITY TO HELP
EXPEDITE THESE APPORTIONMENT
SUCH AS RETURNING TO THE AB
FIFTY FIVE INTERNAL LOAN PROCESS
APPORTIONING ON A MONTHLY BASIS
AND INCREASING THE FREQUENCY OF
THE PRIORITY IN FUNDING.
ROUNDS WHICH IS WHEN THEY
ACTUALLY GET THE MONEY OUT THE
DOOR -- OFTEN WE HEAR FROM THE
ADMINISTRATION THAT THEY THEY
DON'T -- MY GUESS HAVE THE SAME
SENSE OF URGENCY THAT THOSE OF
US IN THE FIELD TO ABOUT
PROJECTS AND SPECIFICALLY
BECAUSE SO MANY OF THE PROJECTS
IN THE QUEUE OUR REIMBURSEMENT
PROJECTS -- WE THINK IT'S VERY
IMPORTANT THAT WE ALL RECOGNIZE
THAT REIMBURSEMENT PROJECT THAT
THE STUDENTS -- SERVE BY THOSE
PROJECTS ARE JUST AS DESERVING
AS STUDENTS -- WITH OTHER
PROJECTS -- AND THAT IT'S IT
WOULD BE UNFAIR TO TO SET UP
SOME KIND OF TWO TIER SYSTEM --
WE'VE ALSO HEARD FREQUENTLY
ABOUT CONCERNS OF RELATED TO
INTEREST ON DEBT SERVICE WITH --
STATEWIDE BONDS -- BUT WE WANT
TO POINT OUT THAT.
INCREASING OR OR EXPEDITING
APPORTIONMENT OR PROCESSING A
STATE SCHOOL OF FACILITY PROGRAM
PROP -- PROJECTS DOESN'T
ACTUALLY INCREASE THAT SERVICE
IT JUST MOVE THAT UP IN TIME AND
IF YOU FACTOR IN THE TIME VALUE
OF MONEY AND INFLATION COST.
YOU MIGHT ACTUALLY SPEND LESS
MONEY IF YOU FUND THOSE SOONER
AS OPPOSED TO LATER AND THEN OF
COURSE -- WITH RAPID COST
ESCALATION THE CONSTRUCTION
SECTOR THE VOTERS AND AND THE
REST OF US WOULD ALL GET MORE
VALUE FOR MONEY IF WE EXPEDITE
THE PROCESSING OF ALL OF THOSE
PROJECTS.
I THINK THAT INTERESTED TO DO
WITH THEM.
WITH THE MONTHLY A PORTION OR
WHATEVER USE ALLOCATION WHATEVER
WORD YOU USE AND THE I ASSUME
THAT MEANT THE BONDS ARE SOLD
AND SITTING THERE AND THEN THE
MONEY IS ROLLING OUT ITS CREW
STATES PAYING INTEREST ON IT OR
SOMETHING LIKE THAT.
WITH THE USE OF AB FIFTY FIVE
LONG -- THAT ISN'T YEAH THERE
THERE ARE SOME INTEREST --
ISSUES RELATED THERE BUT SINCE
WE AS A STATE HAVE A LOT OF
HISTORY USING THIS MECHANISM WE
DO KNOW THAT IT ALSO ENDS UP
BEING TO THE BENEFIT OF THE
STATE TO THE TO THE VOTERS.
THAT WE USE THAT INTERNAL
MECHANISM IT'S CHEAPER THAN
GOING TO THE PRIVATE MARKET AND
AGAIN WITH RESPECT TO COST
ESCALATION WE STILL COME OUT.
BETTER BECAUSE OF THAT -- I WILL
THINK THE DEPARTMENT OF FINANCE
IN LA -- FOR WORKING WITH US WE
PLAN TO CONTINUE THOSE
DISCUSSIONS AS WELL AS INVOLVING
STAFF -- CASH ALSO HAS A
PROPOSAL TO GET US OUT OF BOND
FINANCING AND WE DO HOPE TO
ENGAGE IN THE LEGISLATURE.
OF GOING FORWARD.
THANK YOU VERY MUCH THE NEED IS
GREAT AND WE CERTAINLY NEED TO
SPEED PROJECTS ALONG SO LOOK
FORWARD TO WORKING WITH YOU.
YES MA'AM.
ON BEHALF OF THREE ORGANIZATIONS
THE SCHOOLS FOR SOUND FINANCE
THAT CAL STARS FUNDING COALITION
AND THE CALIFORNIA SCHOOL
FUNDING COALITION WHICH IS ABOUT
THREE HUNDRED DISTRICTS AND
COUNTY OFFICES AROUND THE STATE
OF CALIFORNIA -- WE WANT TO
REALLY SUPPORT THE CAL STIRS
FUNDING PROPOSAL THAT GOVERNOR
NEW SOME HAS -- HAS PUT OUT
THERE -- TO ECHO MANY OF THE
COMMENTS -- FROM MISTER LENNIX --
EARLIER -- THIS AFTERNOON THIS
IS A VERY MUCH A UNIVERSALLY
ACCEPTED AND UNIVERSALLY
SUPPORTED PROPOSAL WE THINK THE
STRUCTURE-- THAT GOVERNOR SOME
AS PUT FORWARD MAKES A LOT OF
SENSE JUST MOVE THOSE RATES --
IN TERMS OF OUR DISTRICTS THAT
THE QUESTION ARE DISTRICTS
PLANNING ON THIS I WOULD SAY YES
BUT DISTRICTS ALREADY ARE
ALREADY THINKING WHAT COULD THEY
DO WITH THOSE DOLLARS THOSE
DOLLARS THAT THEY HAD PLANNED TO
SEND OVER TO STORES WHAT COULD
THEY DO.
BETTER WITH THEM LOCALLY IN
THEIR CLASSROOMS -- SO I I KNOW
THAT -- YOUNG MAN THE MAYOR
VISION POTENTIALLY IS NOT AS
STRONG -- SO WE WANT TO MAKE
pPRIORITY ESPECIALLY SINCE THESE
ARE NON PROPOSITION NINETY EIGHT
DOLLARS AND BOTH UNDER SORT OF
THE THE PURVIEW OF THIS
COMMITTEE AS WELL AS OTHERS.
AND MAY NOT HAVE THE SAME
INTEREST SO WE REALLY HOPE THIS
IS -- HIGH PRIORITY FOR FOR THIS
COMMITTEE THANK THANK YOU THANKS
FOR JOINING US YES SIR -- IS THE
CHAIRMAN OF A SHY THE PROCESS
WITH THE COMPANY SCHOOL
EMPLOYEES ASSOCIATION.
I'M YET TO ASK PLEASE DON'T
FORGET TO CLASSIFY STAFF.
ON THE PENSION ISSUE WE APPLAUD
THE GOVERNMENT FOR SETTING ASIDE.
NON NINETY A ONE TIME FUNDS TO
ADDRESS THIS ISSUE.
WHAT A CLASSIFIED STAFF AS WE
ARE SPEAKING TO THE
ADMINISTRATION DIRECTLY?
INTO CALPERS THE IMAM WOULD BE A
LOT LOWER IS ONE POINT ONE FIVE
BILLION IF YOU WANTED TO THE
THREE BILLION EQUIVALENT.
AND FOR THE 1% REDUCTION PUT A
NOTE FROM THE FIRST TWO YEARS.
INSTEAD OF SEVEN HUNDRED MILLION
IT'S ABOUT A HUNDRED TWENTY FIVE
EACH YEAR OR THREE HUNDRED
MILLION.
WE WOULD JUST ASK OF PARITY
SCHOOLS CANNOT RUN WITHOUT A
MEMBERS.
WHO HAD SHOULD THE KIDS GET TO
SCHOOL AT THE FOOD SERVICE
PROVIDED?
PROTECTED ON THIS C° SITE ABOUT
CAUGHT IN THE CLASSROOM ALONG
WITH TEACHERS.
OF FOR THOSE REASONS WE REALLY --
TO TO ADOPT SOME KIND OF
PROPOSAL TO RECOGNIZE THE
CONTRIBUTION ABOUT MEMBERS TO
RECOGNIZE THAT WE TOO ARE FACING
RISING COSTS.
AND JUST REALLY BRIEFLY I KNOW
IT'S LATE IN THE DAY ON YOUR
CONVERSATION ON PENSION
OBVIOUSLY WE CARE QUITE A BIT.
AND SOME OF THE CONVERSATION.
LEAVE US SOME CREE ISSUES FOR
EXAMPLE I DON'T THINK YOU'RE
PANEL TALK ABOUT WHITE ACOSTA
GOING UP -- IN TERMS OF STATE
POLICY.
OF RECOGNIZING PEOPLE LIVING
LONGER HAS INCREASED THE COST.
STATE THE STATE DECISION TO
AMORTIZE THE THREE EARLIER THIS
THAT A THIRTY A TWENTY YEARS HAS
INCREASED THE CAUGHT.
IN ONE OF THE BIGGEST FACTOR
THAT WAS LEFT OUT IS THAT.
YOU KNOW IF THE STOCK MARKET HAD
CRASHED THAT'S WHAT CAUSED THE
UNFUNDED LIABILITY SQUATS HI.
AT TWO POINTS WITHIN THE LAST
THIRTY YEARS IN THE LATE
NINETIES IT WAS A 128% FUNDED.
IN A I BELIEVE -- TEN YEARS AGO
RIGHT BEFORE THE STOCK MARKET
CRASH WE HAD A HUNDRED AND 1%
FUNDED.
OF THE THESE FUNDS.
NOW WE'RE TALKING ABOUT RUSHING
TO SOLVE SOMETHING THAT LIKE
MORTGAGE.
WE SHOULD TRY TO PAY IT ALL OFF
A COMMA THIS IS SOMETHING THAT
PEOPLE ADDRESS OVER TIME THE
EMPLOYEES ARE READY TO SIT DOWN.
AND TALK TO THE EMPLOYEES AND
WORK WITHIN THE SYSTEM TO ENSURE
THAT WE HAVE AN ADEQUATE SYSTEM.
THE MOST IMPORTANT PART THERE
WAS NO.
RECOGNITION THAT'S THE CAN DOWN
TO FAX HAD INDICATED WE HAVE A
PROBLEM OF ADEQUACY HERE.
SO THE FOCUS ON PENSION IN OF
ITSELF OUTSIDE OF THESE CONTACTS
WITHOUT RECOGNIZING ALL THE
FACTORS APPROPRIATELY.
COULD RUSH SOMEBODY TO JACK TO
THERE'S SOME.
REAL PROBLEM I HAD WITH US
SAYING THAT WE SHOULD ADDRESS
THEM.
BUT THIS IS BY TO POSE BORDERS
DOES BOARD HAVE BEEN MOVING
FORWARD TO TRY TO DAL WITH
THESE ISSUES.
AND WE THINK THAT WHAT THE
GOVERNOR IS PROPOSING IS GREAT.
PLEASE DON'T FORGET TO CLASSIFY
STOP WE WOULD APPRECIATE ANY
RECOGNITION.
THESE FUNDS WOULD BE ADDITIONAL
DISCRETIONARY MONEY THAT HELP
SCHOOL DISTRICT AS THE FACING
ALL THESE ISSUES AT THE LOCAL
LEVEL.
GOOD POINT THANK YOU FOR
BRINGING THAT UP.
THANK YOU FOR WHAT YOU'RE
MEMBERS DO.
YES MA'AM GOOD AFTERNOON REBEKAH
CURLY ON BEHALF OF THE COUNTY
SCHOOL FACILITIES CONSORTIUM
REPRESENTING COUNTY OFFICES OF
EDUCATION FACILITIES ISSUES.
MY COLLEAGUE AT THE LOS ANGELES
COUNTY OFFICE OF EDUCATION ALSO
WANTED TO ASSOCIATE -- HER --
COMMENTS WITH MINE AS SHE WASN'T
ABLE TO BE HERE THIS AFTERNOON.
COUNTY OFFICES SERVE A REALLY
UNIQUE AND DIVERSE POPULATION OF
STUDENTS THINK STUDENTS IN
SPECIAL EDUCATION COURT SCHOOL
COMMUNITY SCHOOLS.
WE HAVE VERY SPECIALIZED
FACILITY NEEDS THAT COME ALONG
WITH THAT POPULATION THAT WE
SERVE.
WE DON'T HAVE THE AUTHORITY TO
PASS LOCAL BONDS WE DON'T LEVY
DEVELOPER FEES AND SO WERE OFTEN
DEPENDENT UPON THE STATE. FOR
FUNDS TO CONSTRUCT RENOVATE AND
REPAIR OUR FACILITIES AND MEET
THE NEEDS OF THESE STUDENTS.
BECAUSE OF THIS WE SUPPORT THE
PROPOSAL THAT SENATOR MCGUIRE
BROUGHT FORWARD TODAY WE ARE
PART OF THAT COALITION AND WE
ALSO SUPPORT THE STAFFING
INCREASE THAT WAS REQUESTED IN
ORDER TO EXPEDITE THE PROCESSING
OF THE APPLICATIONS AT THE PSC.
WE'VE GOT MULTIPLE COUNTY OFFICE
PROJECTS AROUND THE WORKLOAD
LIST RIGHT NOW THAT'S THAT
ALMOST FIVE BILLION DOLLAR LIST
THAT'S WAITING FOR APPORTIONMENT.
AND MOST OF THOSE ARE FINANCIAL
HARDSHIP APPLICATION SO WHAT
THAT MEANS IS THAT WE ACTUALLY
NEED THOSE FUNDS FROM THE STATE
BEFORE WE CAN COMMENCE
CONSTRUCTION ON THESE IMPORTANT
PROJECTS.
THERE ARE PROJECTS ON THE LIST
RIGHT NOW THAT WERE SUBMITTED
BACK IN TWENTY FOURTEEN IT'S
FIVE YEARS LATER AND WE ARE NOT
ABLE TO MOVE FORWARD WITHOUT.
SOME SORT OF INTERNAL BORROWING
OR SOME SORT OF SPECIAL
MECHANISM AND MANY OF MY MEMBERS
ARE NOT ABLE TO DO THAT IN ORDER
TO PROVIDE THESE NEEDED
FACILITIES.
I'M THEIR BEEN QUESTIONS THAT MY
COLLEAGUE RAISED ABOUT THE
REIMBURSEMENT QUESTION YOU KNOW
DO YOU CREATE TO TEARS.
FIND THOSE FIRST TWO NEED THE
FUNDS IN ORDER TO COMMENCE
CONSTRUCTION WE DO NOT AGREE
WITH THAT APPROACH EVEN THOUGH
WE'RE THE ONES THAT MAY BENEFIT
FROM DOT WE BELIEVE THAT ALL --
PROJECTS THAT ARE ELIGIBLE AND
HAVE MET THE STATE LAWS THAT
WERE IN PLACE WHEN THEY SUBMIT
IT SHOULD ALL BE TREATED THE
SAME -- WE KNOW THE NEED IS
THERE WE KNOW THAT THE STATE HAS
THE CAPACITY TO FUND THESE
PROJECTS.
I THINK THE QUESTION REALLY
ABOUT THAT SERVICE IS WHAT
BUDGET YEAR WILL YOU A CREW AND
PAY THAT -- THAT FINANCIAL
OBLIGATION THE OBLIGATION IS
THERE REGARDLESS OF WHETHER IT'S
THIS BUDGET YEAR NEXT BUDGET
YEAR OR THREE YEARS OUT BECAUSE
WE KNOW WE HAVE TO ADMINISTER
NINE BILLION DOLLAR BOND PROGRAM
THAT WAS APPROVED BY VOTERS.
KNOWING THAT THERE WAS A COST
ASSOCIATED WITH THAT SO WITH
THAT I WANT TO THANK YOU FOR
YOUR ATTENTION TO THIS -- WE
SUPPORT MOVING QUICKER ON
GETTING THIS FACILITIES DOLLARS
OUT THE DOOR THANK YOU THANK YOU
SEE WHAT WE CAN DO.
CERTAINLY NEED FACILITIES.
THANK YOU CENTER ROTH AND STAFF --
JEFF BARKER REPRESENTING THE
RIVERSIDE COUNTY SUPERINTENDENT
OF SCHOOLS.
I LIKE TO ASSOCIATE MYSELF WITH
THE COMMENTS OF THE PREVIOUS
SPEAKERS IN SUPPORT OF ISSUE
NUMBER.
FIVE SENATOR MAGUIRE'S PROPOSAL
TO EXPEDITE THE SALE AND THE
ALLOCATION OF THE BOND.
FINDINGS FROM PROPOSITION.
FIFTY ONE AND A COUPLE OF
COMMENTS AS A RESULT OF YOUR
VERY RICH CONVERSATION ABOUT
FISCAL CHALLENGES THAT ARE
FACING SCHOOL DISTRICTS.
AND SPECIFICALLY THE CHALLENGES
THAT ARE FACING -- ALVORD
UNIFIED IN RIVERSIDE COUNTY I
THINK IT PROVIDES A GOOD
OPPORTUNITY TO ASSURE THE
PERSPECTIVE OF THE WORK THAT THE
COUNTY OFFICE OF EDUCATION HAS
BEEN DOING WITH ALVORD.
OF WHEN THE LETTER OF LACK OF
GOING CONCERN.
WHEN OUT IN NOVEMBER OF THAT
STARTED A PROCESS WHERE THERE
HAS BEEN A NUMBER OF MEETINGS
TAKING PLACE?
BETWEEN HER COUNTY OFFICE FISCAL
TEAM AND THE SCHOOL DISTRICT.
ONE OF THE ISSUES THAT CAME TO
LIGHT AND THE INITIAL
CONVERSATIONS THAT YOU DIDN'T
REALLY DELVE INTO.
DURING YOUR CONVERSATION -- THIS
MORNING WAS THAT OUR OUR INITIAL
CONCERN WAS THAT SOME OF THE
STRATEGIES THAT THE DISTRICT WAS
PROPOSING TO MEET THEIR FISCAL
OBLIGATIONS.
WHAT ESSENTIALLY HAVE REMOVED
STRATEGIES FROM THEIR LOCAL
CONTROL ACCOUNTABILITY PLAN THAT
HAVE BEEN DESIGNED TO MEET THE
NEEDS OF THE STUDENTS OR THE
DASHBOARD IDENTIFIED GAPS?
NONE OF US WANTED THAT TO HAPPEN
OF COURSE AND I SUSPECT THAT YOU
AND YOUR COLLEAGUES WOULD NOT
LIKE TO SEE THAT HAPPEN AS WELL.
WE'VE CONTINUE TO MEET WITH THEM.
AND A I THINK OF BUDGET
STABILIZATION PLAN THAT
SATISFIED.
OF OUR FISCAL TEAM I HAVE BEEN
DEVELOPED AND NOW IT REALLY
RESTS IN THE HANDS OF THE
GOVERNING BOARD.
AND IN HER LAST LETTER TO THE
DISTRICT -- JUST WANT TO READ
YOU A COUPLE OF QUOTES FROM OUR
COUNTY SUPERINTENDENT DR WHITES
LETTER.
ONLY THE DISTRICT'S GOVERNING
BOARD CAN TAKE THE NECESSARY
ACTIONS TO CORRECT THE
DISTRICT'S CURRENT FISCAL
CHALLENGES.
AND SHOULD THE DISTRICT FAILED
TO TAKE APPROPRIATE REMEDIAL
ACTION.
THE COUNTY SUPERINTENDENT WILL
INVOKE ALL AUTHORITIES AT HER
DISPOSAL INCLUDING THE
ASSIGNMENT OF A FISCAL ADVISER.
WITH STAY IN RECENT POWER OVER
THE GOVERNING BOARDS DECISION.
CLEARLY WE DON'T WANT TO DO THAT
I DON'T THINK THE DISTRICT WOULD
WANT US TO DO THAT -- WE'RE
PREPARED TO DO THAT IF NEED BE --
AND IN APRIL IN LATE APRIL ARE --
DEPUTY SUPERINTENDENT MISTER
JUST UP AND ARE FISCAL TEAM WILL
BE MAKING A PRESENTATION TO THE
BOARD THAT NIGHT.
AND I SUSPECT IT WILL BE AN
UNPLEASANT EXPERIENCE FOR ALL
INVOLVED BECAUSE THAT WILL BE
WHERE -- ESSENTIALLY THAT IT
WILL BE LAID OUT FOR THEM WHAT
HAS TO HAPPEN.
BUT THEN IT WILL BE IN THEIR
HANDS TO MAKE THOSE DECISIONS.
AND I THINK THAT'S A GOOD.
A PROBABLY A TOPIC FOR
ADDITIONAL CONVERSATION ON A
LATER DATE.
BUT A GOOD FLASHLIGHT INTO SOME
OF THE DISCUSSIONS THAT ARE
GOING ON AT THE LOCAL LEVEL
RIGHT NOW.
BECAUSE OF THE FISCAL CHALLENGES
FACING.
A DISTRICTS ACROSS THE STATE
THANK YOU THANK YOU THANK YOU
FOR YOUR WORK ON THAT ISSUE
THANKS FOR BEING THERE IS SIR
AIRBAG WITH THE CALIFORNIA
SCHOOL BOARDS ASSOCIATION HAPPY
TO BE HERE AND THANK YOU FOR
YOUR PATIENCE AND TIME TONIGHT --
PROVIDING US THIS OPPORTUNITY WE
JUST WANTED TO SHARE OUR
THOUGHTS -- FIRST ON RECOGNIZING
THAT WERE OF VERY -- THANKFUL --
FOR GOVERNANCE AND AND THE
CHARACTERS -- PROPOSAL THAT IS
UP ABSOLUTELY WELL NEEDED BUT WE
DO WANT TO HIGHLIGHT THAT THE
NEED TO ADDRESS OUR CALPERS
PARTNERS ARE CLASSIFIED
EMPLOYEES.
THEY REPRESENT ABOUT HALF OF OUR
CERTIFICATED PAYROLL AND SCHOOL
DISTRICTS AND THE FOLKS AND
ATTENTION THAT IS NEEDED -- TO
BOTH FOR ARE THOSE EMPLOYEES BUT
AS WELL AS THE SCHOOL DISTRICTS --
TO MAINTAIN BUDGET BECAUSE OF
THE RISING COSTS AS WELL THAT WE
WANT TO MAKE SURE THERE'S PARITY
IN ONE PROPOSAL FOR ONE SET OF
IN PLACE AS WELL AS THE OTHERS
WE WANT TO HIGHLIGHT THAT.
THAT CONCERN IN OUR SUPPORT FOR
THEM.
THE SECOND ISSUE IS RELATED TO
ITEM FIVE AND CSPA SUPPORT --
FOR CENTER REQUIRES PROPOSAL WE
ARE PART OF THAT COALITION.
I ALSO WANT TO ADD THAT -- THE
ASSOCIATION OF CALIFORNIA SCHOOL
ADMINISTRATORS -- IS UNABLE TO
BE HERE TODAY BUT THEY ARE
LINING THEIR COMMENTS WITH MINE
AS WELL ON THIS ISSUE.
AT THE NEED -- TO ISSUE THE THE
DEBT.
ON THE SCHOOL FACILITIES
PROJECTS IS CRITICAL AT YOU'VE
ALREADY HEARD OF BEFORE THAT
THERE IS A RISING COSTS OF THIS --
COSTS OF CONSTRUCTION AT THE
NUMBER PROJECTS IT'S GONNA TAKE
OVER THREE YEARS TO RELEASE
THOSE FUNDS YET COSTS CONTINUE
TO RISE.
I THINK A LOT OF THE REASON WHY
WE'RE SEEING A LOT OF COST
ESCALATION IS THE ABSENT FLOWS
OF FUNDS AND THE INSTABILITY OF
THE STATE PARTICIPATING
PROVIDING.
A CONSISTENT FORM OF FUNDING --
AND IT'S RELYING ON THE SCHOOL
DISTRICT THAT THE LOCALS TO DO
THE BEST THEY CAN'T ENFORCE AND
THAT CAN ONLY GO SO FAR.
IF WE GET TO A POINT WHERE WE
CAN MOVE THROUGH THIS WORKLOAD
LESS GET BACK TO A STABLE LEVEL
OF CONSISTENT FUNDING SO THAT WE
CAN PLANT.
AND ASSET THE MARKET.
THE MARKET IS AND DRIVING OUR
COSTS.
WE CAN ACTUALLY DO A LOT BETTER
AND DRIVING DOWN THE COST FOR
RIGHT NOW WE CAN'T DO THAT GIVEN
THE CURRENT STATE OF THINGS.
I KNOW IT'S NO ONE'S FAULT THE
THE FINANCIAL CRISIS CONTRIBUTED
TO THAT AND WE'RE DOING THE BEST
WE CAN TO GET OUT OF IT.
WE HAVE AN OPPORTUNITY RIGHT NOW
WITH THE AVAILABLE BONTA STORY
THAT WE HAVE. TO STEP UP BUT THE
MONEY OUT THERE CITIES PROJECT
CAN GET AND WE CAN THEN SET THE
TABLE AND STRAIGHTEN OUT THE
MARKET SO WITH ENCOURAGED US
SUPPORT OF ITEM FIVE AND HOPE
THAT IF WE CAN BE OF ANY
ASSISTANCE IS THAT CONVERSATION
GO FORWARD WILL.
ON PARTICIPATE IS THERE A
CALPERS PROPOSAL GOING BACK TO
YOUR FIRST POINT.
AT SUPPORT AT THE EXISTING --
CASTERS BUT IS THERE A CAL PERS.
WE WILL SEE WANT TO SEE A
PROPORTIONATE SHARE SO IF BASED
ON AND PLAIN VOLUME -- WE WOULD
THINK THAT A REASONABLE
RELATIONSHIP THERE IN TERMS OF
THE AMOUNT OF FUNDING SET ASIDE
WE CERTAINLY WANT TO LOOK AT
THAT'S MORE BUT THAT'S WHERE
WE'RE THINKING ABOUT RIGHT NOW.
THANK YOU FOR COMING.
YES SIR GOOD AFTERNOON I'M
CALLING MILLER WITH THE
CALIFORNIA CHARTER SCHOOLS
ASSOCIATION WHERE TO ADDRESS
SOME OF THE FACILITIES ISSUES --
DISCUSSED TODAY THIS FOUR POINT
OF FACT -- RELATIVE TO THE BOND
THERE WAS THERE WAS FIVE HUNDRED
MILLION DOLLARS IN THE LAST BOND
FOR CHARTER SCHOOL FACILITIES
PARTICULARLY SATISFIED WE HAD
ALMOST A TWO BILLION DOLLARS
WORTH OF APPLICANTS FOR THAT
THAT MONEY SO YOU CAN GET A
SENSE OF OF THE SCALE OF OF THE
NEED OUT.
THERE -- ONE PROGRAM THAT I DO
WANT TO MENTION IS THE SB SOME
FORTY FACILITY GRANT PROGRAM FOR
CHARTER SCHOOLS WHICH DOES
PROVIDE A SURE OF COST PER PUPIL
ALLOCATION. FOR FACILITIES --
FOR CHARTER SCHOOLS ARE SERVING
STUDENTS IN -- THESE FACILITIES.
IN A VERY HIGH -- I NEED AREAS
SERVING HIGH NEED STUDENTS --
THAT THAT PROGRAM IT DOES HELP
RELIEVE SOME OF THE PRESSURE ON
THE BOND PROGRAM WHICH IS
RELATIVELY MUCH MORE EXPENSIVE --
THEN THE PER PUPIL ALLOCATION OF
PROGRAM -- THE PROGRAM IS -- IN
THE GOVERNOR'S BUDGET FUNDED AT
PRIOR YEARS LEVEL -- WE'VE HEARD
FROM THE STATE TREASURER'S
OFFICE WHO ADMINISTERS THE
PROGRAM THAT -- CURRENT YEAR
THERE IS -- ANTICIPATED TO BE
ABOUT A TWENTY MILLION AT TWENTY
MILLION DOLLAR SHORTFALL IN THE
PROGRAM I'M IN CURRENT YEAR --
IT THERE THEY'LL BE UPDATING
THOSE ESTIMATES -- SOONER SOONER
AROUND MAY REVIVE VISION TO TO
KNOW WHAT THE TRUTH SHORTFALL IS --
WHEN THAT PROGRAM IS UNDER
FUNDED -- IT DOES CREATE -- PRO
RATIONS AND SO SCHOOLS ARE ARE
THEN FORCED -- TO USE MORE OF
THEIR FUNDING FOR FACILITIES
RATHER THAN FOR FOR BASIC
EDUCATION PROGRAM SO WE REALLY
ENCOURAGE YOU -- TO TAKE A LOOK
AT THAT AT ME REVISION -- TO TO
MAKE SURE ENSURE THAT THE
PROGRAM IS FULLY FUNDED -- AT AT
THE ELIGIBILITY LEVEL THE
CONCERN WE HAVE WITH IT IS THAT
THE PROGRAM DOES PROVIDE A A
COLA.
ON THE GRANT RATES BUT THE COAL
IS NOT NECESSARILY FUNDED AND
LESS YOU CHOOSE TO DO THAT IN
THE BUDGET SO THERE'S ALL ALWAYS
GOING TO BE THIS MISMATCH UNLESS
WERE WERE KEEPING KEEPING UP
WITH THE COLA.
AS WELL AS GROWTH IN THE
PROGRAMMER EACH YEAR TO
APPRECIATE YOUR CONSIDERATION
THANK YOU [inaudible]
YES MA'AM.
GOOD AFTERNOON MY NAME IS BONNIE
BENSON AND I'M THE CHIEF
FINANCIAL OFFICER WITH FOURTEEN
SCHOOL OF EDUCATION I'M ALSO
HERE TO SPEAK ON BEHALF OF
SUPPORTING AS THE SEVEN FORTY
BEING FULLY FUNDED -- I BELIEVE
YOU'VE ALREADY RECEIVED A LETTER
OF SUPPORT FOR ME BUT I WANT TO
SPEAK SPECIFICALLY ABOUT ONE OF
OUR SCHOOLS WHICH IS PARTY BROWN
COLLEGE PREP LOCATED IN SAN
BERNADINE NOW.
AT HEARTY BROWN -- WE HAVE THREE
HUNDRED AND FIFTEEN STUDENTS AND
OUR MISSION WITH ALL OF OUR
CHARTERS IN OUR NETWORK IS TO
CLOSE THE ACHIEVEMENT GAP
WRAPPED IN AMERICAN STUDENTS.
AT HEARTY BROWN WE ACTUALLY HAVE
A 68% OF OUR STUDENTS ARE
AFRICAN AMERICAN. 25% FOR LATINO
AND 90% OF OUR STUDENTS QUALIFY
FOR FREE OR REDUCED MEALS.
OUR MODEL FOR FACILITIES HAS
ALWAYS BEEN TO OPERATE IN THESE
FACILITIES.
IT ALLOWS US TO NEGOTIATE FOR
LONG TERM FACILITIES WE ENTER
INTO LONG TERM LEASES AND THAT
WAY.
WE AS EDUCATORS CAN SPEND OUR
TIME FOCUSING ON ACADEMICS
RATHER THAN ON NEGOTIATING FOR
FACILITIES EACH YAR IN IT ALSO
GIVES OUR FAMILY'S.
STABILITY BECAUSE THEY KNOW YEAR
AFTER YEAR WERE SCHOOLS GOING TO
BE LOCATED -- OF COURSE WHEN WE
NEGOTIATE HE'S LONG TERM LEASES
OUR RANGE INCLUDES ESCALATION
CLAUSES EACH YEAR SO FOR US --
SB SEVEN FORTY IS CRUCIAL AT
THAT SCHOOL SITE.
OUR PEACE COSTS IN THE CURRENT
YEAR ARE ABOUT SIX HUNDRED
EIGHTY FOUR THOUSAND DOLLARS.
AND ARE SB -- SEVEN FORTY
FUNDING IF IT WERE FULLY FUNDED
WITH THE CALL ACT IS ABOUT THREE
HUNDRED AND NINETY ONE THOUSAND
DOLLARS SO IT COVERS ABOUT 57%
OF OUR RENT THERE.
WHICH IS HUGE THAT WOULD BE -- A
LOT OF MONEY TO GET IT OUT OF
OUR CLASSROOMS WE DIDN'T GET
THAT MONEY.
AND HAVING THAT WHOLE OFFENDED
IS WHAT HELPS US KEEP UPWITH
THE RIGHT ESCALATIONS THAT ARE
ALREADY BUILT INTO OUR LONG TERM
BASIS WHAT.
WORKS APPRECIATE YOUR TIME TODAY
THANK YOU FOR COMING WE'LL TAKE
A LOOK AT SIR.
GOOD AFTERNOON DAVE ALL RATS
REPRESENTING CALIFORNIA RETIRED
TEACHERS ASSOCIATION.
FIRST OUT WE SUPPORT THE
GOVERNOR'S PROPOSAL ON CAL STIRS
FUNDING.
I WE ALSO -- ALIGN OURSELVES
WITH COMMENTS MADE BY JENNIFER
BAKER CTA.
REGARDING THE CONCERNS ON SOME
OF THE PROPOSALS AFFECTING
RETIREMENT SECURITY.
ON THE HEALTH CARE TO DISCUSSION.
THIS IS A MAJOR ISSUE A WE WANT
TO BRING UP THE FACT THAT.
THERE 70% OF THE RETIRED
EDUCATORS WHO DO NOT HAVE.
ANY SUPPORT FOR LIFETIME HEALTH
BENEFITS FROM THEIR EMPLOYER.
WHEN WE START DISCUSSION ON HOW
WE LOOK AT?
RETIREMENT SECURITY AND HEALTH
CARE SECURITY [inaudible]
THE AVERAGE.
REPLACEMENT OF INCOME IS ABOUT
65%.
ALL THE STUDIES SAY YOU NEED 85%.
IF IT'S LESS THAN THAT AND YOU
DO NOT HAVE HEALTH CARE FUNDING.
EVEN WORSE ALL.
SO WE WOULD APPRECIATE WHEN YOU
COME BACK THE SUBCOMMITTEE LOOKS
AT THESE ISSUES AGAIN.
WE CAN HAVE A MORE DISCUSSION ON
WHAT ARE SOME OF THE INCENTIVES
THAT COULD BE PROVIDED. FOR
REDUCING BARRIERS. FOR
POTENTIALLY HAVING SCHOOL
DISTRICT BY INTO THE CALPERS.
SYSTEM WHICH MAYBE MUCH LESS
EXPENSIVE AND PROVIDE DOWN THE
ROAD BETTER FUNDING FOR RETIREE
HEALTHCARE.
HOW WITH THAT THANK YOU VERY
MUCH AND BY THE WAY DON'T WORRY
THERE WERE NO PROPOSALS TO
IMPACT?
OR EFFECT TO RETIREE HEALTH CARE
COMING OUT OF THIS SUBCOMMITTEE
I UNDERSTAND WAS AN
INFORMATIONAL ISSUE AT SOME
COLLEAGUES THAT ARE INTERESTED
IN FINDING OUTTHE WISE IN THE
WHERE FOR IS WITH RESPECT.
TO THOSE OF FEW DISTRICTS
APPARENTLY THAT.
THAT OFFER OF A POST RETIREMENT
HEALTH BENEFITS -- OTHER THAN A
MEDICARE -- SUPPLEMENT CONCEPT
AND TRYING TO FIGURE OUT THE
COST IN THE WISE AND THE WEATHER
WHERE THE DISTRICTS WERE
DISTRICTS THAT ARE UNDER.
OF REVIEW OR MONITORING BUT REST
EASY NOTHING COME OUT OF THIS
ONE THANK YOU PRESSURE JOINING
US.
ANY OTHER PUBLIC COMMENT --
SEEING NONE I THINK WE'VE
COVERED THE AGENDA AND THIS
SUBCOMMITTEE NUMBER ONE WILL BE