Budgeting errors, increases in office staff and employee raises were the main reasons the Sweetwater Union High School District found itself with a $30-million budget deficit, according to a recent report to the board of trustees.
Manny Rubio, the district’s director of grants and communication, said he wants the community to know the district recognized the extent of the issues and they are currently working on a long-lasting resolution.
“These have been very significant challenging times for our district,” Rubio said. “We are projecting that by the end of the year we’ll be able to show a balanced budget.”
The district is currently examining the number of students enrolled in order to assess the appropriate staffing needed in an era of declining enrollments. Rubio said the standard solution to this issue has been layoffs, but they found a better alternative.
“We don’t believe that layoffs are the right way to go,” Rubio said.
Instead, the district offered early retirement incentives to employees who were getting close to normal retirement age. Mid-year retirement incentives were offered if eligible employees decided to leave by December 2018, and a lesser incentive was offered if they decided to leave by the end of the school year this June.
Over 300 employees accepted the offer including certified teaching staff, office management, maintenance and cafeteria staff. This included about 100 teaching positions and 200 other positions throughout various departments.
Patrick Murphy, policy director and senior fellow at the Public Policy Institute of California, said budget management issues are not unique to the San Diego County’s South Bay. Districts across the country are having similar budgeting hurdles to overcome, he said. Offering early retirements with an incentive is a strategy used to balance the budget.
“The assumption is that you will replace a person in your payroll with someone who makes less money,” Murphy said. “As employees were going to retire at some point anyway, they already had their benefits in hand and no one could take those away.”
Murphy also said quality is a concern. If quality teachers are hired to replace experienced teachers, then he said the strategy can be deemed effective. His concern is the potential lack of experience with new teachers, which he said “is a great unknown.”
Sweetwater’s 2018 retirement wave resulted in a savings of $6-million. Significant drops in payroll from December to February saved an additional $2-million per month. More saving projections are expected by June, when the second tier of early retirements will happen, but the final numbers cannot be reported yet, Rubio said.
Rubio credited the district’s unions for their cooperation with the plan. He said while there were some difficult conversations, the district administration and unions were able to find common ground.
Dr. Angelica Suarez, Southwestern College Vice President of Student Affairs, said SWC offers college courses to students from the Sweetwater district through a dual enrollment program. Students in their junior and senior year of high school can participate in the dual program, which provides them with a college advantage before they graduate.
“We stand in support of the students that they (Sweetwater School District) serve so that we can continue to provide strong partnerships and strong programs,” Suarez said. “We are serving the same community of students.”
Suarez said she favors collaboration with experienced entities.
“Part of working in large institutions is to seek the advice of different experts inside and outside your institution to find some of the best practices to prevent some of these issues from happening in the future,” Suarez said.
Among other things, the district administration and unions talked about taking a close look after employees leave to determine if a replacement is needed and to evaluate positions that can be condensed, Rubio said.
The district is implementing a preventative measure Rubio calls “position control.” This means it will not hire employees unless the job description and funds are confirmed and deemed essential. The decision to hire someone will be jointly made by human resources, finance and schools’ administrative teams. Single-sourced funds will need to be confirmed to avoid any confusions when sharing multiple fund sources.
Audits and investigations by outside auditors are currently ongoing in the district’s finance department.
“We want to get to the bottom of this,” Rubio said. “We want to know what happened exactly.”
The district has reached to point where it is developing methods to improve all related finance systems. Also, the district will have multiple levels of authorization to avoid having a single employee in charge of a particular fund, or a single employee signoff, Rubio said.
Tim Nader SWC Governing Board Member said he agrees with additional oversight.
“One of the board functions is oversight, that tends to get ignored in a lot of municipal land and in local districts government in California, because we have this idea that everything supposed to be delegated to administration,” Nader said.
The district set up a webpage for people to send their questions, feedback and recommendations for improvements.
Rubio said he wishes to dissipate the myth regarding speculations on possible reductions of special school programs and said, “Those things aren’t going away, none of that is changing.”
An option to consider is a board budget sub-committee, Nader said. Appointing a couple of members of the board to provide detailed budget oversight working in conjunction with senior level administration.
