Oakland Unified finally got some good news in its enrollment numbers. Who knew that doing community outreach, simplifying the enrollment process, and opening a new school that families wanted would attract more students?
It’s a bit more complicated than that, but it’s still good news. However, before we start popping champagne, we still need to address the underlying budget issues, and we also heard some very troubling testimony from OUSD staff about deliberately hidden costs and deficits.
Since the news is generally a parade of the horribles, let’s start with some good news.
OUSD had surprisingly strong enrollment
After a tough year of overly rosy projections, followed by disappointing enrollment and mid-year cuts, it’s great to see OUSD’s enrollment is up. Here is the slide from the OUSD board meeting
Because a major driver of district revenue is student enrollment, these numbers matter. But before we get giddy and open up the checkbook we need to look deeper into these numbers, and listen to district staff’s caution.
Behind the enrollment numbers
It’s not clear what exactly is behind this growth. I do applaud the OUSD enrollment office for doing a much better job of outreach and being increasingly responsive to families. Families appreciated the enrollment fairs that were run with district and charter schools, and there are many underappreciated OUSD schools, that should attract more families.
But there is more to it.
Demographically, Oakland has more young children this year than average, three charter schools were closed, including one very late in the year, and OUSD opened its first new school in years, Oakland SOL, which likely retained some children who would have left OUSD. So, it’s hard to say, whether this enrollment growth is a trend or a blip. And in reality the way OUSD handles its own portfolio and outreach will have some impact, but there are always outside forces.
So if we are smart, we will not get too happy and will continue to do the hard work of fixing OUSD’s budget in a sustainable way, where we aren’t so dependent on relatively small fluctuations in enrollment.
The Continuing Budget Crisis
Even with this enrollment boost the district is in a financial crisis, expenses were higher than budgeted, we are below the state mandated reserve, we will need to make another set of mid-year cuts, and another state receivership is not out of the question. GO does a solid job of covering the budget issues here, but let me excerpt,
OUSD had $9.1 million more in expenses than it thought it would during the closing of the books. This is troubling. It also had some additional unexpected revenue come in. Bottomline, OUSD finished the 2016-17 school year with a 0.5% reserve ($2.9 million), which was lower than projected. OUSD will start this year with an adopted budget that gets it back to the state minimum 2% reserve.
All of this means that there is both no room for error in the current budget and major budget challenges in the immediate school year. There are going to be tough, but necessary choices ahead.
This bump in revenues can’t take the urgency away from the need to fundamentally reform OUSD’s budget, which for decades has lacked transparency, clarity, and accuracy. Which brings me to the most troubling aspect.
75 off the book positions
We will never get our finances straight if we can’t trust the books. And the Budget and Finance committee meeting had a troubling revelation—75 non budgeted positions were hired for, and allegedly staff were told to hide the deficit from the board. The Oakland Post covered this
One significant misstep last year was the failure of what is called “position control.”
Supt. Antwan Wilson’s administration created 75 positions, mostly in the central office, that were not accounted for in the budget and for which funds had not been allocated, said Katema Ballentine, OUSD’s financial officer of budget development. “That’s huge. I’ve never seen a budget number that large,” she said…
Ballentine told board members that budget staff realized during the last months of Supt. Wilson’s administration that the district was facing a $30 million shortfall, but she and Senior Business Officer Vernon Hal were not allowed to tell the board.
“Vernon and I were not permitted,” she said.
I wasn’t in the room, and I don’t know what happened. And these are not fraudulent positions, they were expenditures for kids, but we can never run a district where expenses are hidden, and staff are silenced. And if that is how business is run, we will bounce from crisis to crisis, and probably should be under state receivership.
Good enrollment numbers give Oakland Unified a chance to breathe, but not to rest. OUSD has critical financial issues that have to be addressed now, and maybe more importantly is the crisis of culture, where the public and its representatives can be kept in the dark, where problems can fester, and can’t be effectively addressed.
So we need to not just fix the OUSD budget, but more importantly, fix the culture that created it.