SDUSD Board Vice President expressed his opposition to the proposed "tentative agreement" with the SDEA, the SD teachers union, and the School District.

"First, do no harm to kids. That should be our number one priority," said Barnett. "This proposal once again puts our kids' education second. This is unacceptable."

The proposed agreement once again places too much reliance on hope; hope that the state tax increases pass. And if the voters don't raise state taxes, and SDUSD has $47 million less revenues, the agreement calls for a reduction of the school year by an additional 14 days.

There is an option which does not reduce school year. There is another option to fill the shortfall instead of shortening the school year and hurting kids. This approach would include a combination of:

• Renegotiated health provider contracts and new health care incentives to staff.
• Reallocation of some existing expenditures.
• Cuts to administration, transportation and other non-class room cuts."

"We have 139 departments which have been exempted from budget cuts. We must cut to the bone before hurting kids," said Barnett.

Barnett will release the financial specifics of his alternative plan Thursday. The School Board will be acting on the proposed agreement on Friday at a special 4 p.m. board meeting.

"We are in this financial mess due partially to state cuts and partially due to poor decisions by the past school board, which approved raises in the hope of the economy and state budget would get better. This led to the school year being reduced by five days, and promises of raises which have contributed to over half of our $120 million shortfall. We are facing another $97 million in 13/14," said Barnett. "Once again, this agreement based on 'hope' places our kids' education at risk. We can and must do better."

Sadly, this Board did not even consider alternatives outside of reducing the school year.

The San Diego Unified School District has encountered significant challenges in recent years, most of them budgetary. San Diego Newsroom interviewed school board trustee Scott Barnett to inquire about his position on the district’s controversial use of so-called Project Stabilization Agreements in construction projects, its financial solvency and other issues. Read more»

An independent study commissioned by the San Diego Unified School District has shown that the $2.1 billion construction bond's Project Stabilization Agreement (PSA) has produced the benefits promised without impact on cost or quality of the construction.

The study, completed by consultant Rea & Parker Research, found:

-- Local hire goals are on track;

-- There was no change in project cost between PSA and non-PSA projects;

-- The number of bidders is lower (an average of six per project), but with no impact on cost or quality;

-- PSA projects are on average completing faster than non-PSA projects.

"The results prove that the school board made the right decision in approving this agreement," said Richard Barrera, Board President. "It's good for our students and teachers and good for our local economy by providing jobs for local workers."

The report finds that overall construction costs have not been affected by the agreement.School Board Member Scott Barnett, who represents Subdistrict C, said he is convinced that the agreement has had a positive impact.

"I admit I was highly skeptical of the PSA," said Barnett, a former head of the San Diego County Taxpayers Association who joined the school board after approval of the agreement. "That's why I pushed for an independent review of the Prop. S projects by a trusted source."

At Barnett's suggestion SDUSD retained Rea & Parker Research, who completed many studies for the San Diego Taxpayers Association.

"The facts are clear, the PSA is good for taxpayers," said Barnett.

On November 4, 2008, nearly 69 percent of San Diego voters passed the $2.1 billion general-obligation bond measure, Proposition S to repair, renovate and revitalize our neighborhood schools.

The Project Stabilization Agreement is designed to ensure a sufficient supply of skilled craft workers and to eliminate work disruptions on Prop. S projects. It also includes sections that promote the hiring of skilled craftspeople living within the San Diego Unified boundaries and encourages individuals living within district boundaries, including students, to become apprentices.

The following are highlights from the Rea & Parker Research Report.

-- There has been no increase in the cost of the winning bids for school construction projects under the San Diego Unified School District (SDUSD) Project Stabilization Agreement (PSA) than were the winning bids for non-PSA projects under Proposition S that was approved in November, 2008.

-- The number of general contractor bidders and participating subcontractors per project has declined for PSA projects; however, this decline is not reflected in any increase in cost to SDUSD.

-- Profit margins for contractors have declined under the PSA, but these contractors appear to be absorbing these increased costs rather than increasing their bids—thereby imposing no additional cost upon SDUSD taxpayers.

-- Project completion time is faster under the PSA than for Proposition S projects that pre-dated the PSA. Faster completion allows for the District to experience less overhead per project and for the more efficient replacement school improvements to be in operation more quickly.

-- Quality of construction, as indicated by contractor and construction manager interviews and by survey responses, is unchanged between projects constructed under the PSA and those that were contracted prior to the PSA.

-- Workers from targeted zip codes (economically disadvantaged portions of the District) have increased during the past six months and are presently close to achieving the very ambitious target of 35 percent that was set in the PSA.

-- The achievement of the high level of workers from targeted zip codes is due predominantly to union referrals that are focused upon obtaining workers from these zip codes. This increase in targeted area workers is not re-flected among non-union core workers or existing workers for union signatory contractors.

-- There has been an increase in reporting violations and deficiencies pertaining to labor compliance since the PSA was adopted; however, there is no discernible or perceived impact on construction quality or duration of construction caused by these deficiencies. Furthermore, it can be interpreted that this increase is due to increased attention to worker payroll and benefits under the PSA than before, which is beneficial to the payment of prevailing wages to the working population.

-- The Los Angeles Unified School District PSA required approximately 5 years to achieve operational efficiency. SDUSD’s PSA has been in effect for only 2 years and, by the measures included in this report, is significantly ahead of the LAUSD schedule.

• Download a copy of the report (PDF).

Pay Cuts And Health Plan Savings Will Save $70 Million Per Year

Pay Cuts Range From 1.75-12.75%

2,200 Employees would have no pay cut

SDUSD Board Trustee Scott Barnett released the details of his plan to balance San Diego Unified School District’s budget and avoid insolvency. SDUSD is facing budget shortfalls from $60 million to over $110 million, including the possibility of $30 million in mid-year cuts.

 “While the plan asks for significant sacrifices from our teachers and employees, the burden is shared fairly,” said Barnett. “Most importantly, this plan would maintain educational programs and support services at the current level. Class sizes would not grow and we won’t need to cut arts, music or athletics.

Under the plan:

• Salaries would be reduced 9% -- saving $58 million a year.

• Health plan restructuring would save $12 million per year.

• Pay cuts range from 1.75% for those earning under $40,000, to 12.75% for those earning over $165,000.

• 2,200 part time employees would have no pay cut.

• $50-$100 per parcel tax would be placed on November 2012 ballot to cancel pay cuts as of January ‘13.

Scott Barnett Plan to Balance Budget and Avoid Insolvency

• SDUSD will receive projected revenue COLA from State in 2012-13 and beyond.

• No Mid Year Cuts from State in 2011-12 nor additional cuts in 2012-13 and beyond.

• Note: If SDUSD does NOT receive COLA and/or mid-year cuts occur, then additional reductions in salaries or cuts in academic programs, most likely increased class size, may be required to balance budget.

KEY FACTORS

• Plan is for three fiscal years FY 2012-13 through FY 2015-16.

• Current service levels (class size, academic programs and operations) remain at 2011-12 level.

• No reduction of emergency reserves.

• No land sales and no increased use of one-time revenues to pay for ongoing expenditures.

• All ½+ time employees to continue to receive option of free health and welfare with no premiums.

• November 2012, $50-$100 Parcel Tax vote to end pay cut starting January 2013.

KEY COMPONENTS -- Total Net savings approximately $70 million annually

• Payroll reduction of 9%, saving $58 million.

• Health and welfare saving $12 million annually (H&W currently costs SDUSD $165 million/year).

• Net pay cuts range from 1.75% cut for low income employees to 12.75% for top managers.

• Furlough days to end—school year back to 180 from 175 days, cost $17 million.

• Step and Column raises of .6%-2.7% to continue, cost $12 million.

• Employees who work less then ¾ time, approximately 2,200, receive NO PAY CUT unless they earn $40,000/year or above.

• Planned general raises cancelled, saving $21 million in 2012-13.

• Employees who work ½ time or greater will receive Kaiser Health at NO COST (including dependents.) Employees choosing more expensive plan to pay cost difference, saving $12 million annually.

• November 2012, $50-$100 Parcel Tax vote to end pay cut starting January 2013.

KEY BENEFITS

• Multi-year plan to balance budget and avoid insolvency.

• Distributes pay cuts fairly among employees.

• Maintains current class sizes.

• Protects and could reverse recently downgraded SDUSD credit rating.

• All Employees have Furlough Days  restored = 2.25% salary increase. Cost estimate $17 million
• Step and Column Raises will continue = .6% - $2.7% salary increase. Cost estimate  $12 million
• Negotiated raise for all employees eliminated under this proposal. Savings approximately $21 million
• Proposed  reductions would apply to all employees who are employed at 3/4 FTE or greater with the   District. Approximately 2200 employes would have NO PAY CUT
• No pay cut for any Employee working less then 3/4 time unless they earn $40,000 or higher
• Proposal includes School Board Members $18,000 salary being cut 10% after restoration of furlough days = 8% cut

In the interim, please contact me with feedback, and suggestions regarding my plan to prevent insolvency.

Thank you.

District Facing Budget Cuts of $60 to $110 million

Plan would extend school year, maintain class sizes and protect programs

Calls for saving $92 million by deferring raises, a 10% pay cut and restructuring health care plan. A proposed November 2012 parcel tax would restore $60 million in pay.

SAN DIEGO – San Diego Unified School District (SDUSD) Board Trustee Scott Barnett released his "Plan to Save Our Schools" today.

"Bold, yet prudent action is needed to save our schools and protect our children's education," said Barnett, who joined then SDUSD board less then a year ago, and whose two daughters attend SDUSD high schools.

"The first thing we must do is stop digging a bigger budget hole," said Barnett. "While it is true the state legislature is not giving our schools the funding we desperately need, it is also true that our school board has been spending money we don't have."

Previous Board cut school year and promised raises to kick in next July.

Barnett discussed, how in reaction to the State of California cutting funds to SDUSD, the previous school board has raided reserves, cut the school year by Five days, but also promised raises which are "unaffordable." He also pointed out that the preliminary staff proposal to avoid mid-year cuts this year and plans for next years budget calls for reducing reserves $25 million and selling $21 million in district land.

"One-time fixes--to cover ongoing expenditures--such as raiding our precious reserves (and proposals to sell our land assets) is one of the reasons our credit rating was recently downgraded," said Barnett.

Moody's Investor Services last week downgraded SDUSD Credit Rating

"We are at the edge of a cliff, said Barnett. "If we don't start acting prudently now, it may be too late to save our district from insolvency and state take over."

Three year "Plan to Save Our Schools" has the following elements:

• Maintain current reserve levels.

• School closures not required.

• No land sales.

• Maintain current class sizes. (Note: if full mid-year cuts are triggered by State in January, class size increases will likely be required in K-3 to balance budget and avoid insolvency.)

• Maintain current level of visual and performing arts and athletic programs.

• Maintain current level of custodial, landscaping, and other classified positions.

• No further cuts to nurse and counselor staffing levels.

• Maintain school police at current level

Ongoing costs contained in plan

• Increase school year by 5 days as currently planned starting September 2013.

• Ending these "furlough days" will cost approximately $17 million.

• Maintain negotiated "step and column" employee raises. Cost: Approximately $12 million. (Both of these costs are already counted in anticipated budget shortfall of $60 million for 12-13.)

Savings and Revenues

• Eliminate proposed pay raises. Saves $21 million in 12-13. $22 million in 13-14. $43 million ongoing costs saved.

• Restructure health plans to save $12 million annually. (Currently all district employees and dependents get a variety of health care options with no premiums charged. Healthcare costs SDUSD about $165 million a year. This proposal would modify the benefit so all employees and dependents still could get FREE Kaiser, but would have to pay for any additional costs if they select other health plan providers. This would save SDUSD approximately $12 million a year.)

• 10% pay cut starting July 1, 2012 for all employees would save approximately $60 million a year. (10% cut would be AFTER restoration of furlough days and after payment of step and column raises. Plan would also have a sliding scale, where employees earning over $150,000 would be cut more then 10% and the % cut in salary would be reduced at reduced salary levels.)

Possible sliding scale would have smaller pay cuts at these thresholds:

• $100- $150,000;

• $75-$100,000;

• $50-$75,000;

• $25-$50,000;

• NO PAY CUT for SDUSD employees earning $25,000 or less.

• $18,000 School Board to take 10% cut

"Instituting the pay cuts after the salary increases occur from ending furlough days, and after the payment of "step and column" pay increases, as well as having a sliding scale which reduces the burden at lower salaries (with no pay cut for our lowest earners) makes this plan a bit more palatable," said Barnett.

Unions must agree to concessions by end of calendar year in order to effectively implement plan.

"Eliminating $21 million in raises, and implementing $60 million pay cuts, and saving $12 million in health care costs, will require our public employee unions to approve this plan by end of year," said Barnett. "If this plan is not in place and mid year cuts are triggered, then it may be too late to avoid intervention by the state."

New revenue

• November 2012 -- $50 per parcel tax to raise $60 million a year and restore cut salaries.

"I know this plan to save our school district places a terrible burden on our teachers and other employees. But the pay cut must be agree to be implemented starting July 2012 in order to balance our budget and get the necessary short-term loans to meet our approximately $80 million a month payroll and other costs," said Barnett, who headed of the San Diego County Taxpayers Association for 7 years. "I will urge my colleagues to place a parcel tax on the November ballot, and will ask voters to support this ballot measure, which could end employee pay cuts after only 6 months," said Barnett.

"I know this plan has something for everyone to dislike," said Barnett. "Employees will bear the terrible burden of a pay cut, and taxpayers will be asked to dig in their pockets. But this plan saves our district from insolvency and state take over. And it maintains our most important educational programs, while protecting our reserves and our assets from liquidation."

# # #

Colleagues Unwillingness To Make Tough Decisions Will Leave My Coastal District Bearing Brunt Of Closures

SAN DIEGO – San Diego Unified School District (SDUSD) Board Trustee Scott Barnett called for an end to the school closure process in which SDUSD officials have recommended closing or realigning 14 schools to save approximately $5 million a year.

"I am willing to make difficult choices to save our school district," said Barnett. "But I will not allow schools in Point Loma and Mission Bay to bear most of the burden, when my colleagues continue to spend rashly in other areas of the budget."

Board Votes to Continue Subsidized Bus Transportation

"It was overwhelmingly clear at this past Tuesday's board meeting that a majority of my colleagues showed they are unwilling to make tough financial decisions, whether it's on school closures, transportation or other areas," said Barnett.

Barnett was referring to the 3-2 vote (Barnett and Trustee John Lee Evans opposed) in which the board approved maintaining the costly and unnecessary busing of thousands of SDUSD students to schools outside their neighborhoods. SDUSD will spend about $30 million on busing this school year. This could be reduced by approximately $9 million and still maintain more than $20 million in legally mandated transportation services for special education and low-income students who attend poor-performing schools.

Proposed School Closures Mostly in Barnett's Coastal District

"While I believe some school closures are needed to 'right size' our school district and free up desperately needed funds," said Barnett, "I will not sacrifice a half a dozen schools in my area when it's clear the majority of the Board will avoid tough votes."

Moving Mandarin Program And Combining Mission Bay High/Pacific Beach Middle Should Still Be Examined

"I do believe we should close the decrepit Barnard facility, and consider moving this successful Mandarin-language program to a more viable site," he said. "And combining Mission Bay High and Pacific Beach Middle into an elite academy is an exciting concept which should still be discussed."