Tuesday, June 17, 2014

Gov. Brown, the Meddler

Darn it!  I wish Sacramento would just keep their darn hands off local Districts.  In the latest affront to common sense, Gov. Moonbeam has passed a law that will require Districts to cap our reserves at 10% of revenues.  (article)

For those not familiar with the nuances of school funding, we are required by law to have a reserve of 3% of our annual revenue.  It's prudent to require that local districts have some amount of cushion that we can draw upon when times get lean.  But what genius thought it was a good idea to cap that reserve?  If we could squirrel away a larger reserve (say, 15% or 20%) and then guarantee that we wouldn't have to issue a single pink slip in a big recession, wouldn't that be a GOOD idea?  The article says some districts have reserves of 30%-50%.  I challenge lawmakers to show us one district with over 1000 students that has that kind of reserve.  LASD has 11% reserves, and we're considered very fortunate.

Unfortunately, this seems to be the Governor's way of buying political support.  At a state level, the CTA continues to press to minimize reserves because the most logical way a district spends reserves is on salary. By forcing districts to spend reserves, it helps the CTA membership, who in turn support Gov. Brown.  Nice trick, Jerry.

Now, I want to be clear.  I supported our recent pay raise for our teachers because it was the right thing to do.  They've worked very hard and have implemented a first class program that is achieving great results.  In negotiations, our particular teachers really do have a sense of cooperation with us.  But at a state level, the CTA and Jerry are just nuts.

PS:  The rationale behind all of this is that the State is going to carry reserves to make sure we don't need as much in our safety net.  That's great- except that the State has consistently raided the Prop 98 guaranteed funding we are supposed to receive.

Friday, June 6, 2014

Financial Responsibility

Recently a group of "community members" have been running ads in the local papers alleging that the LASD Board and administration isn't acting in a financially responsible manner.  Their ads have been riddled with factual inaccuracies (simple things that take 10 minutes on Google to confirm).  I could spend a lot of time correcting all of that, but I think it's a lot simpler to point to the professionals.

As we do every year, LASD issued some short term notes to the financial markets.  I won't bore readers with the mechanics, but it's something that schools across California do every year.  As part of the process, Standard and Poors rated us "SP1+", which is their highest rating for short term borrowing.  Their analysts cited LASD's strong financial fundamentals as a key aspect of the rating.

This isn't the first time we've received excellent marks from the rating agencies.  I wrote about it once before, but it's a common theme for LASD.  We're fortunate to have so many folks involved to make sure we do a good job of stewarding the community's resources.