As soon as we launched our #OUSDBudget series, people started asking: “But what can the District do?”

Being solution-oriented is one of our organization’s core values, and OUSD leaders are actively discussing options – so we felt it was time to offer some specific ideas in the spirit of partnership.

We start with ways to increase revenue, which seem to have gotten less attention and yet are particularly important to pursue because they can improve the quality of education our students receive, while also improving our fiscal solvency.

But increasing revenue may not be enough, and cuts may be unavoidable. All of the expense reduction options will be controversial and unpopular – as is always the case in unfortunate situations like this. Of course, we’ll want to keep any cuts as far away from the classroom as possible. But any cuts will inevitably affect students – which no one wants. And unfortunately, they will affect teachers and staff who are working hard to serve our students.

Effective leadership requires making tough decisions. OUSD’s current budget crisis was created over many years by a revolving door of Superintendents. We now have a strong, home-grown leader with the potential to provide stable long-term leadership. She will need to make hard choices, weighing tradeoffs within and between multiple unpleasant options. The path back to fiscal vitality will not be easy. State receivership is not inevitable, but it will take solidarity, compromise, and sacrifice.

Revenue

Strategies to increase revenue still require tradeoffs but could simultaneously strengthen the district’s finances and improve education quality for students:

 

  • Maximize attendance: CA public schools are funded based on “Average Daily Attendance” – not enrollment. Every day a student is absent, the district gets $85 less. A 1% increase in the average daily attendance would translate into over $5 million more in revenue. The practices that maximize attendance and minimize chronic absenteeism are well-known; not-for-profit Attendance Works has loads of ideas and resources. Call families promptly. Buy alarm clocks. Get bus passes. Install washing machines. Provide flu vaccines. Use short-term independent study. Ask other families to help. Create incentive programs. OUSD is probably doing some of this but might be able to do more. In addition to financial benefit for the district, this approach provides clear academic benefits for students.
  • Increase enrollment by expanding the most popular schools: We all know that some OUSD schools are in high demand, and that some students who don’t get into these OUSD schools leave the public system entirely. Over 17,000 Oakland students enroll in private or parochial schools, or transfer to a nearby district (officially or through creative addressing). OUSD could keep some of these students in the district by expanding enrollment capacity of the most in-demand schools. Some in-demand schools have small campuses, so the district may need to get creative: reconfiguring existing space or adding portables; opening a satellite campus with the same program under the same management team; or swapping campuses with a nearby school with a larger facility. Any of these approaches would require the district to work closely with school leaders to understand what is possible, what a successful expansion would require, and what might be some unintended consequences. The brilliant folks on OUSD’s Research, Data & Assessment team have already compiled helpful data in the Strategic Regional Analysis, and these conversations hopefully are part of the district’s Blueprint. If a dozen high-demand schools each added 30 more students each, that would result in a 1% increase in OUSD enrollment, bring in $5 million more revenue, and give more students access to our strongest schools. The time to make these decisions is now: enrollment for the 2018-2019 school year launches November 13!
  • Sell under-utilized assets: OUSD has more land and buildings than it has ever used – even at peak enrollment. It has properties that have been unused for years and are declining into disrepair, depleting resources and leading to blight. It’s a sellers’ market now, though selling to maximize revenue would likely require state legislation. Even if the district doesn’t want them to go to a private developer, OUSD might be able to find another public agency that could put those properties to good use – affordable housing, health clinics, parks, art studios, not-for-profits. The going price for one parcel could be millions of dollars. If the district doesn’t want to sell, some public agencies or not-for-profits might be willing to take a long-term lease, providing a steady unrestricted revenue stream. These assets can get more money into our classrooms rather than being a drain on resources.
  • SELPA reform: OUSD’s Special Education programming requires millions in additional funding from the General unrestricted fund. Thanks to the recent ERS report, it’s also now established that Oakland’s special needs students receive $10 million less for services because most charters have left OUSD’s SELPA (Special Education Local Planning Area). Redesigning the SELPA so charters return can be a win-win-win: more revenue for both OUSD and charters, and more importantly, better services for all Special Education students in Oakland.

Expenses

Increasing revenue may be insufficient; cuts may be unavoidable. We hope that cuts are made in strategic ways that enable long-term viability.

  • Cut top executives’ pay: The senior leaders in OUSD work very hard, are deeply committed to Oakland students, and are incredibly talented; capable district leaders for big urban districts like OUSD are too scarce and absolutely deserve to be paid well for the difficult jobs they do. But in a daunting situation like this, we think it’s important to send a strong message that everyone needs to sacrifice. If the top 20 leaders take a 5% pay cut, it could save the jobs of a several employees working at minimum wage without affecting students in the classroom.
  • Benchmark for infrastructure: As we have pointed out in previous blogs, OUSD spends more on central office services on a per pupil basis than comparable districts (about $400 per pupil more or $14 million total), so reducing expenses will require cuts to OUSD’s central office. For core “infrastructure” departments (like finance, personnel, legal), detailed headcount and budget data for several districts similar in size and student composition could inform these “right-sizing” decisions. It’s worth a reminder that since OUSD’s expenses are about 80% personnel costs ($435M out of $547M in the General Fund, according to OUSD’s Annual Statement of Receipts and Expenditures for 2016-2017), there is no way to do significant expense reductions without layoffs. Good and hard-working people – our neighbors, friends, relatives, and our students’ family members – will lose their livelihoods. No one in education can possibly take these decisions lightly. If layoffs are necessary, we hope the district will do so in a way that is as respectful and considerate as possible – providing lead time, options, and as much support as possible.
  • Prioritize “school support” services based on school requests: In addition to classic “central office” departments (like finance and HR), part of OUSD’s centralized spending includes what it calls “shared services” or “school support,” such as Professional Development or Parent & Community Relations. Because not all districts centrally organize all these functions, OUSD needs a different strategy other than benchmarking to identify potential expense reductions. We’d recommend determining the scope of support that these departments provide, calculating the cost-per-pupil, and asking principals if they would pay for that service if the money were in the school’s budget under the principal’s direct control. If school leaders don’t believe these “school support services” merit the costs, perhaps OUSD and school leaders can deploy those resources more strategically?
  • Maximize staff utilization at sites: Before consolidating or closing any schools, OUSD should first ensure that each teacher in each individual classroom is teaching the maximum student caseload that the contract allows. This might require consolidating classrooms, creating multi-grade classrooms, or getting waivers to create hybrid roles for some teachers. I know this may sound harsh: some students require more time and attention than standardized ratios allow, and it would mean asking even more of teachers who are already working hard and doing their best with limited resources. Sadly, this degree of attention to the cold hard numbers may be what is required for OUSD to avoid state receivership. And it could lessen the greater disruption that would come from school closures or consolidations.

Like everyone else in Oakland, we are dismayed to find OUSD in this precarious position again – despite three consecutive years of per-pupil funding increases providing 28% more in General Fund revenues even with flat enrollment. Yes, the state needs to fund public schools at higher levels – but that’s not an excuse for us to spend beyond our means. We hope that these ideas will contribute to a more comprehensive discussion of options, spark some creativity, and get all hands on deck to explore what it will take to avoid OUSD going back into receivership.