Open Letter to the Orange County Department of Education Board of Trustees

Date: Wednesday March 18th, 2015

Robert M. Hammond, 1st District
David L. Boyd, 2nd District
Ken L. Williams Jr., D.O. 3rd District
John W. Bedell, Ph.D. 4th DIstrict
Linda Lindholm, 5th District

Re: The Capistrano Unified School District
Positive Certification of the 2014-15 2nd Interim Budget Report

Dear Trustees:

As a parent of a student in the Capistrano Unified School District, I wanted to express my deep concern about the financial position of the Capistrano Unified School District, and it’s ongoing ability to provide a quality education to the 50,000 students it serves in this District.

As a Trustee for the Orange County Department of Education you were elected by the people to represent the interests of taxpayers and students in all matters before this Board. It is the job of the Orange County Department of Education to oversee the financial stability of the Capistrano Unified School District. As a Trustee, you have a legal fiduciary duty to see that the interests of students are represented at the collective bargaining table, and that the district complies fully with Public Disclosure Laws.

On March 11, 2015, the CUSD Board of Trustees voted to adopt Resolution #1415-38 Revenue and Expenditure Increases/Decreases stating that in accordance with Education Code Section 42130 that the report satisfied the State and County Office of Education Officials that CUSD will be able to meet its financial obligations for the remainder of this fiscal year (and the two subsequent years). In addition, as required by AB 2756, the District certifies that minimum reserve levels are projected to be met for the two subsequent fiscal years.

Historical Unrestricted Salaries and Benefits to Total Unrestricted General Fund Expenditures

According to the Interim Report, 90% of CUSD’s budget goes towards employee compensation (salaries, pensions and benefits).

On page 109 of the Report, it states that the Districts negotiations with employee groups have not been completed.

Source:http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/3272207836948201822.pdfat page 172 of the Board Agenda Page 109 of 130 of the Second Interim Report for Fiscal Year 2014-15

The District is requesting a POSITIVE CERTIFICATION... stating that based upon current projections CUSD will meet its financial obligations for the current fiscal year and subsequent two fiscal years.

The District does not know the actual cost of 90% of its budget; and therefore cannot, in good faith, state with certainty that it will meet it’s financial obligations for this or the subsequent two years.

The District and CUEA Failed to Negotiate in Good Faith to Execute a New Employment Contract in Accordance with Article 12.1 of the Agreement.

The District has failed to execute new employment agreements with staff for the current year 2014-15 and the subsequent year 2015 - 16. It is unclear to the Public which contract is in force, but according to the CUEA web site, it is a contract executed in 2011 that expired on June 30, 2013.

ARTICLE 12 - Negotiation Procedures

12.1 The District and the Association agree that they will meet and negotiate pursuant to the requirements of State law sufficiently in advance of the end of the term of this agreement so that there is sufficient time for a new agreement to be reached or for the resolution of an impasse. No later than April 1 of the calendar year in which this agreement expires the parties shall submit their initial proposals to each other for a successor agreement or re-openers. The District shall give proper notice of such proposals at the first school board meeting following the submission of the proposals.

Source: http://www.cuea.org/information_v2/ContractToJun2013.pdf at page 47

A new agreement has never been reached, and an impasse has never been filed.

The result of both parties failure to negotiate in Good Faith to execute a new contract in accordance with Article 12.1 constitutes a Breach of Contract that resulted in the unjust enrichment of District Employees which caused substantial harm to every student in the District as outlined below:

The District has been working without a new teachers contract since June 30, 2013. However, material terms of the Districts contract with CUEA have been changed such as changes to class sizes, the number of employees and total employee compensation. Average employee compensation increased by $10,000, class sizes increased by 1.5 students across all grades, and students had three furlough days in 2013-2014. These are all negotiated items which cannot be changed without a new agreement.

Public Disclosure of Collective Bargaining Agreement CUSD/CUEA shows that for the period July 1, 2012 ending June 30, 2013 Average Compensation (salaries, pensions and benefits) for Teachers was $95,673. There was a total number of represented employees of 2,155.

Public Disclosure of Collective Bargaining Agreement CUSD/CUEA shows that for the period July 1, 2013 ending June 30, 2014 Average Compensation (salaries, pensions and benefits) for Teachers was $105,340. There was a total number of represented employees of 2,035.

The OCDE Board of Trustees should be made aware of the following:

• With the passage of the States New LCFF, CUSD received $8.42 million in new funding for the 2013-14 academic School Year.

• At that time, the State gave direction to Districts NOT to include the new funding in the current year negotiations.

• At that time, there was no LCAP in place too ensure accountability of how the new LCFF funds were to be spent.

• Had the District and CUEA bargained in Good Faith. The revenues would have been based on a COLA only budget and restoration language would not have been triggered .

• The District and it’s employee groups conspired behind closed doors to intentionally delay contract negotiations until after the receipt of the new LCFF money.

• Trustees voted to pass a 2013-14 Budget without having employment contracts in place. The Budget that was passed contained furlough days, increased class sizes and substantial compensation increases for employees (all negotiated items).

• By delaying 2013-14 contracts, the Employee groups were able to claim that the combination of the COLA and new LCFF money when combined triggered salary restoration language from the 2010 teachers strike.

• By delaying contract negotiations the District was able to give employees $5.622 million in salary restorations, then started the process of identifying $13,381 million dollars in budget cuts for 2013-2014 school year.

• The result: Protected Salaries- Pensions- Benefits- for employees. Cuts to student services- increased class sizes- cuts to programs- deferred maintenance and 3 instructional furlough days for students.

This was documented in a memorandum from Clark Hampton, Deputy Superintendent, Business and Support Services to the Board of Trustees dated July 30, 2013.

Source:http://capousd.ca.schoolloop.com/file/1343191429797/5667737573387975994.pdf

CUSD has Cut $152 million from its Budget since 2006

The Nation is in the midst of the longest financial recovery in history. We are in the 6th year of recovery. As you read the $152 million in cuts that have been made, you must keep in mind that during this “recovery” very little money has been spent to instructional time, to restore programs, to reduce class sizes, or to maintain our facilities. Most additional money has been used to maintain maximum employee compensation.

As an example- despite the fact that employee compensation is over 90% of the Districts budget (after an early retirement that is costing CUSD $2.44 million per year for five years) the teachers salary schedule has only been reduced by 1.2% since 2006 (which was restored last year). So while employees have been shielded from the harshness of the great recession, students have been forced to endure old buildings that have had little or no maintenance, in classrooms with 40 kids per class, with instructional time being consumed by fundraising activities to pay for art music and other programs that have been cut.

See: Cuts to Staff and Programs Since 2006 at the end of this letter.

Despite the State’s Record High Revenues, Many School Districts Remain Severely Underfunded.

The State of California did it’s own studies which showed that you cannot educate a student in a large suburban school district for under $10,726 per student per year.

Source: http://www.schoolfunding.info/states/ca/CA-AIR-3-07.pdf at xiii

Capistrano Unified is funded at $7,002 per student. To put that number into perspective CUSD is receiving $2,499 per student less then California’s current average per pupil spending of $9,501 and $4,224 per student less than the current national average of $11,226.

The States new LCFF intentionally underfunds wealthy suburban school districts. The State keeps $200,000 million dollars per year in education funding that should go to the Capistrano Unified School District. The new funding formula deprives every student in the District of sufficient funding for a basic education simply because they happen to live in a wealthy area. That is a violation of the Equal Protection Clause of the 14th Amendment to the US Constitution and the Free School Guarantee of the California Constitution.

By any measure- ALL students in the Capistrano Unified School District (irrespective of their individual wealth, race or ethnicity) are being deprived of the funding they need to have the education that is guaranteed to them under Article IX of the California constitution.

The Continued Lack of Adequate Funding Has Resulted in a Notable Decline in Student Performance Across all Demographics.

The remainder of this letter can be read at:

http://disclosurecusd.blogspot.com/2015/03/open-letter-to-orange-county-department.html