On Thursday, Alan Fernandes and Joe DiNunzio met as a subcommittee to discuss the roll out of a parcel tax. Alan Fernandes pushed for a period of engagement with the public with an open and transparent process. They will have a series of check-ins and discussions, with the eventual goal being a final vote to place the measure on the ballot before the end of the school year in June.
They reiterated the need for a robust conversation with the community, a transparent process, but also both committed to solving the compensation gap in a way that was more permanent.
“There is a need to continue to have a discussion,” Alan Fernandes said on Thursday regarding “what parcel tax could be used to close (the teacher compensation gap).”
He sees three main objectives: (1) is it the appropriate course?; (2) why it is the appropriate course?; and (3) how do we engage the public?.
Mr. Fernandes noted the limit on the ability to continue taxing the local residents for long term city needs as well as the school board. The city recently failed to pass a parcel tax for roads.
“Whatever we’re doing here, vis-à-vis these line items as well as a long-term schedule, that we committed to bring back to our board, that we expand and make sure at the minimum that the city is aware and in an ideal version, see if we can work together to jointly solve some of the problems and have a community conversation together,” he said.
Joe DiNunzio explained, “There is no question that we have a moral and strategic obligation… to invest in the best possible education for the next generation. We need to teach our teachers and staff fairly and compensate them appropriately, both because it’s the right thing to do but also because the only way we’re going to have the strong group of teachers is if we’re compensating them fairly.
“There’s no question in my mind that that has to be a critical focus,” he said.
Mr. DiNunzio added, “I don’t feel that there is a clear enough understanding today of how we spend our money.” He noted we have all heard “why don’t you just pay them more and do something less?”
He noted the lack of understanding, not only about how money is spent but how “that lines up against our strategic priorities and what the financial tradeoffs are.”
Mr. DiNunzio pointed out that one possibility would be to increase class size – he stressed he was not advocating that and even said he believes they would not be in favor of that, but that is something they should put on the table to discuss.
“We need to have a conversation,” he stressed.
Joe DiNunzio is also concerned about the economy.
“I do feel the head winds of an economy that is likely to slow down,” he said. “We are at our max. Maybe we’ll get some relief on the pension side, maybe we won’t.” But, “by the end of this year, we are at our minimum rainy day fund.” Thus, “there is no reserve to draw down on.”
He explained that he would hate to deal with the compensation issues and in a year have programmatic shortfalls that the district is unable to address.
He said, “When we think about teacher compensation, we have to look at the whole budget, the budget isn’t going to get less challenging, it’s going to get more challenging.”
Mr. DiNunzio explained, “I believe we could do a better job of communicating that to the public so that they do understand those trade offs.”
He added, “I think process is important.” He said when they do go out for a parcel tax, “We want to go out full measure, ready to go, the strongest possible argument that it is as no brainer as it possibly could be.”
Alan Fernandes asked, “What was the point of an eight-year parcel tax if we don’t have this ability in 2020 to really ask for this community what we really need?”
He noted that, in 2016, there was a chance that the board would have put a $900 parcel tax before the voters. They decided at that time not to do it. He said, “Which I continue to believe was a mistake.”
But he added, “I understood the importance of the renewal and we couldn’t jeopardize it.
“If we do not put a parcel on the 2020 ballot of some kind, then I don’t even understand the value of an eight-year parcel tax.”
Joe DiNunzio responded, “I think we should as part of this process aspire to do the best we can to solve this challenge as best as we can see for the long term. In other words, not a stop gap.”
“Eight years feels like a stop gap,” he said. He noted that with the facility plan the conversation was about 25 years, not just four or eight years.
“I’m nervous, I’m an inexperienced public servant, but I look at that budget… and I do get worried about it,” Mr. DiNunzio explained. “Let’s not do something that kicks another can down the road another four years.”
He wants to do this right so that, with community backing, the district is in good shape for an extended period of time.
“The state’s not going to save us,” he acknowledged. “But realistically there are a lot of priorities… If we want to continue to have the unique characteristic of the strength of our educational system, we as citizens are going to have to step up.”
Alan Fernandes acknowledged that this was going to have to be different from past parcel tax efforts.
“This is different than that,” he said. “I hope this to be the parcel tax to end all parcel taxes.”
He wants this parcel tax systematic and in perpetuity, unless changed by the voters to provide that local investment.
He later added, “My objective is to solve the compensation gap.”
—David M. Greenwald reporting
But, “by the end of this year, we are at our minimum rainy day fund.” Thus, “there is no reserve to draw down on.”
I would like to understand what Trustee Dinunzio means by that statement? Does he mean that DJUSD has dedicated its entire discretionary reserve and will only have the 3% required by law remaining at the end of this year? Is he counting on any of the state projected budget surplus of $20 billion on reaching DJUSD? Without the underlying methodology leading to that conclusion it leaves me scratching my head.
Ron – I believe that in order to fund the temporary teacher compensation increase, they drew on their discretionary reserves (as opposed to those required by state law). I further believe that they are not expecting additional money from the state and they are also concerned with the pension hit. But maybe Joe can explain it better than I can.
I know they tapped the unrestricted reserve to pay one time money without including it in the salary schedule, a prudent strategy with one time money, but I doubt they spent the entire discretionary reserve. As I recall, the one time money used to settle the DTA contract brought them down around $1 million under the 8% reserve that they have as a policy to consider themselves to be financially secure, but, this percentage is arbitrary because the legal requirement is 3% and they have operated with reserves smaller than 8% for many years. In fact, I suspect that with new one time money flowing from stock market capital gains to the new Governor’s budget, they will have enough reserves to supplement teacher salaries again this year.
Ron – The reserve is now just a little over 3%. Money that we were expecting from the state did not materialize and so that is why were are well below the 6% reserve we planned to be at. We are cutting $450,000 from the budget through attrition to stay above the 3% for next year. The Governors proposed budget does not contain any new one-time money.
Thank You for the clarification.
Just an FYI, this was discussed on 12/20 when the board approved the district’s interim budget. This was probably the most important item on the agenda but it got lost amid everything else.