THE VOTE: NO RIF's YET! STATE OF FINANCIAL EXIGENCY (EMERGENCY) DECLARED BUT BOARD DIRECTS HINOJOSA NOT TO FIRE ANYONE YET!
It's 2:00 and we're sitting in the big auditorium. The small auditorium where the board meeting is--is full.
All the board members are present with exception of Edwin Flores.
A good question is: why wasn't the meeting moved to the big auditorium given the level of interest?
A good answer: they wanted to minimize disruptions?
So we're waiting for the TV feed to start.
The nice thing about this is that all of us "media" folks can talk while we're waiting without anyone looking at us funny.
It's 2:02 and we're in session.
"This afternoon we have one possible action item," noted Jack Lowe.
Jack asked for a motion to bring the RIF proposal forward.
Carla Ranger moved that since there were so many people here, they move the meeting to the auditorium.
It obviously failed.
Jack opens with an apology about the $64 Million dollar shortfall: "We're disappointed and we're apologetic."
Root causes for the deficit according to Lowe: incompetence in the accounting department and "3 separate systems" used to keep track of the budget.
"If we do the same thing this year, we're going to have another big overrun."
They hired, in case you didn't know, Steve Korby--one of the two "rent-a-CFO's" to be a permanent CFO.
Lowe is laying out the "brutal facts" about what DISD is doing to combat the shortfall.
He's turning the mike over to Superintendent Michael Hinojosa.
"Obviously this is a very difficult period," Hinojosa said.
"I'm ultimately responsible for everything that happens in this District."
Awww! Hinojosa said that since the budget has been overrun by 5%, he's going to take a voluntary 5% pay cut!
Hinojosa points out that people have gotten salary increases so the deficit will be bigger next year. Possibly as high as "$84 Million."
He's outlining the reasons "we got here" (to such a huge deficit). First, there was a budget error. A huge miscalculation that resulted in a $44M dollar error.
Second reason: "position creep." Basically people were hired outside recommended staffing ratios.
Side note: much blame is being paid to the District operating on "3 different systems." This is somewhat misleading. The root cause is that there is no synergy between these systems--and the people operating them are, perhaps, not as familiar with the systems as they should be. Plenty of organizations rely on heterogeneous systems. More on this, perhaps, later.
2:17 - Hinojosa says he's getting close to his solution.
Hinojosa is talking about maintaining lower teacher-student class size ratios.
"There are 955 positions" that don't meet the criteria for positions they're going to keep. He says that 300 of these positions can be moved to alternate funding sources.
So the way I read this, at this point, he's proposing cutting somewhere between 655 to 900 positions.
"Over 600 layoffs."
This year, it will generate $46 million dollars in savings. $57 million next year.
Offices are being asked to reduce budgets by 10%.
Basically, the bottom line: $59 million dollars in reductions this year.
TRAVEL BAN! Oh, translation: curbs on travel. This will probably evolve into "only when absolutely necessary" which means it will be business as usual.
Hinojosa is talking about reducing services and other options to get the $120M fund balance back (the reserve fund).
But the plan needs to be adopted. Big question: if the board approves it, does that make it right?
Bigger question: is this the right guy to come up with, and implement the solution.
2:29 - He's getting ready to open everything up to questions from the Trustees.
Here come the staff members to field them: Steve Korby, Arnie Viramontes, and Col. Olson
"You can't fix a big budget problem by working on the small numbers," Jack Lowe reminded everyone.
Nancy Bingham is proposed that questions be taken in a round-the-table format so no one trustee monopolizes the discussion.
First up: Lew Blackburn. His topic: "the team" is responsible. His question is: "help me remember how we were going to pay for all [the new teachers we hired]."
Jerome Garza points out that all the suburban cities are suffering for budget decisions relating to tax relief.
"A wake up call needs to occur in Austin" to fix the school finance issues, Garza asseted.
Blame the state.
They're talking about how the "position creep" problem started and how long it has been going on.
Korby doesn't know.
Lew Blackburn is driving the conversation on how this all came about.
Korby noted that the original problem was discovered last February.
Viramontes is answering questions relating to what needs to be done with respect to the IT systems.
Interesting note: Viramontes was over IT prior to his promotion to Chief "Transformation" Officer. Our question: why, when he was over IT, didn't we hear concerns over a broken system and proposed fixes?
Jerome Garza is pushing Viramontes/Korby on what's different with respect to how systems/procedures will be changing.
Back to the "how did it all happen" discussion, Carla Ranger points out this is the worst financial crisis in 30 years. She asks if these "formulas" being used to hire staff were being used previous.
Hinojosa points out that this is not (the $64M shortfall) the worst the District has had. In the auditorium, folks are saying "what?"
I'm sort-of glad to be here and not in there!
"Did I also hear you say that decisions were made [...] that did not have Board approval," Ranger asked.
Basically the answer is "yes."
Ranger is trying to clarify that someone overstepped his or her bounds "outside" the approval of the board to "contribute to this financial crisis."
Applause here in the auditorium.
Aimee Bolender and Dale Kaiser are being thanked by Nancy Bingham.
Nancy is proposing "looking at" the learning centers. Translation: Bingham is hinting at closing the learning centers.
Denise Collier is taking the conversation back to the "are the schools over-formula" with respect to staff, compliance, etc.
Korby notes that the learning centers are costing about $18m dollars.
Jerome Garza is echoing "equal funding" for students. A touchy subject, eh?
"When was the last time the district did a RIF?" asked Garza. He noted it was in 1991 and it "tore this district apart."
He's proposing cutting auxiliary jobs because "the money is just not out there."
Specifically: academic coaching positions. The proposal brought applause from the auditorium.
More discussion on what the District is trying to do to reconcile positions. Technicalities.
Jack Lowe just summarized his view of the budget the Board received last summer: "It's caca." "It's flawed."
They're touching on "leveling." This is the process where the students are inventoried at schools, and staff shifted appropriately.
Jerome Garza wants to see what campuses are overstaffed. He's proposing leveling before cutting staff.
I think they're doing that. Maybe Hinojosa will say that.
Ron Price is taking the discussion back to: "how many teachers are hired without board approval" (for the positions).
"How many people did these principal's hire without board approval?"
It's not that simple.
Hinojosa pointed out the process is that the Board approves the budget, then the administration hires the teachers or requests a waiver from the state.
There are formulas in place, again, that dictate ratios of students to teachers--especially in low-performing schools. So cutting positions isn't going to be a simple thing.
600+ are going. This is according to Hinojosa. The full number, and how it's going to be done is not yet finalized.
Of course, this all depends on whether the Board declares a fiscal emergency.
Now back to the discussion.
Price noted that he'd requested the number of "contracts" that are less than $50,000. He hasn't yet received the information.
Price notes that he's looking for ways to save money so that teachers won't have to be cut.
"Have we considered [eliminating positions] in "research and evaluation'," Price asked? This brought "accepting" comments from those in the auditorium.
"We're looking at that right now," noted Korby.
Hinojosa is trying to bring everyone back to the staff cuts.
"We have to right-size the staffing," said Hinojosa.
"We have a responibility to get within our (staffing) formulas."
"We can find all the rubber bands and paper clips and it's not going to save us that much money."
Our question: if this is the solution, and indications of the "big problem" surfaced in the Spring, why are we here, at this point right now?
Carla Ranger is getting back to her question: "how did we get to this point."
Now Ranger is bringing up the learning centers. "Everything is on the table." "Talking about the learning centers (cutting them) first is not a viable option."
Leigh Ann Ellis is asking how the District could overrun the staffing ratios.
"We're not going to say no one travels," noted Hinojosa. Yep, knew it.
But Hinojosa notes that they're going to be scrutinizing travel very closely.
Leigh Ann Ellis noted that the Office of Professional Responsibility has gotten bloated.
What does the Office of Professional Responsibility actually do, by the way? I know why they started it, but what do they do?
Blackburn brings us back to reality: "When we ask questions (about the budget), I get some 'fuzzy' answers."
Now we're back to nit-picking line items in the budget. "Consultants" are on the chopping block now. $120 million dollars. Staff notes that some consultants are needed.
Ron Price is also asking that everyone keep their hands off the learning centers.
Price is asking how much money would be saved if we "cut all stipends."
Price would like to see people who live outside the school district, who don't pay taxes to the District, to be the first to be cut.
"We have excess [teachers and administrators] who aren't teaching [or administrating]" Lew Blackburn pointed out. Col. Olson is talking about how the District has people on the payroll who aren't working.
She notes, in essence, this is contractual.
"We let them get paid for doing nothing," notes Blackburn.
"We've been throwing money out the window for awhile."
Hinojosa said this problem is addressed in the proposal on the table.
Our question: so why has it taken this long? Why was this situation allowed to exist in the first place?
Ron Price wants to see the ethnicity of people getting RIF'd (by the way, that's "Reduction in Force" in case you're not familiar with the acronym--"Fired" in other words). He wants to make sure that there's "parity" in the firings.
And we're getting back into the administrivia of the situation.
Of course the big question remains: should the Board approve this administration to manage the problem that they created--or if it didn't create the situation, it allowed the problem to flourish for 3 years.
Jerome Garza asked about cutting back on overtime.
"We did cut overtime in alot of places," replied Hinojosa. "This is one area where if you create a solution, you create another problem."
Jerome asked if DISD has salaried (non-hourly) individuals who get overtime.
Olson responded that she'd have to research this.
Denise Collier noted that if teachers attend development training or evening activities, they receive $20 an hour extra in addition to their salaries.
More meat: how will the RIF be done? How will people be fired?
Olson notes that if teachers are cut, the District would like to have them come back and reapply if they're RIF'd.
Olson notes that H/R has been calling other districts trying to "pre-place" (or "bridge") the RIF.
Jack Lowe asks: "would we give (rehire) priority to the folks we would RIF?"
Col. Olson notes that they'd give priority to anyone who was with to any position for which they are qualified.
Jerome Garza asked confirmation that the District can terminate contracts of teachers. He also asked if the Board could terminate contracts of senior executives (alluding to Hinojosa).
Garza then congratulated Hinojosa for asking for the power to terminate contracts when he (Hinojosa) had a contract that could be terminated.
I think it was some attempt to show solidarity with Hinojosa as he begins to fire others.
Hinojosa notes that there will be no "bumping." Bumping is a process where RIF'd teachers invoke seniority as a tool to oust less senior teachers at other campuses.
So the RIFs are going to happen at the campus level. If you get RIF'd, you're apparently out the door regardless of seniority.
It's 4:16 and we're back, deep, into the administrivia.
Deficiencies in the District's accounting practices, uncovered in the audit, are being addressed. "We have several holes in our processing system," Korby noted.
"It's a paper based system and thing fall through the cracks."
Now they're addressing core deficiencies with the existing accounting system.
You know, if I were being caddy, I would probably say something like: "Arnie should just pick up the phone and call his wife (the District's Chief Information Officer) and tell her to fix the system."
But I won't because I'm not.
Korby noted that he didn't know if the District had the resources to fix the problems with the accounting system. He promised to be back in front of the board asking for more resources (translation: "money") if they don't.
Jerome Garza: "We need to have the right folks in the right position." Garza is asking "rhetorically" (critically) how many people in the "transformation" department are CPA's or have appropriate credentials.
Carla Ranger is back to the "when did you find about about this shortfall." Round-and-round it went. Hinojosa said he found out about it on the 8th, confirmed it and found out on the 10th.
Ranger's a little irritated because Lowe found out about it on the 9th, and everyone else found out about it on the 10th.
Ranger wants the Administrator to "better communicate with the community" and include the public in the discussions on the budget. She noted that it happened years ago, and it has somehow been stopped.
It goes along with our theory that the secrecy that seems prevalent in the District results in problems being compounded. Little ones become big ones.
"I am not interested in giving blanket approval for RIFs," Ranger says. She wants the administration to give the board specifics of any plan for approval. Several of those "hardcores" remaining in the auditorium indicate approval vocally.
Ron Price asked that the District hold open budget workshops to leverage the expertise of the community. "Let everyone see that we're transparent."
I can't wait to see what Jack Lowe thinks about this!
Price is on to the senior staff again: "I see we have an assistant chief of staff." "Do we actually need these positions?"
"We're trying to save money [...] to keep teachers in the classroom."
Again, there is much clapping in the auditorium. Board members, again, can't here this.
Ron Price is concerned about the travel cuts: "We can't turn the screws too tight."
Price is concerned about District officials being able to travel to Austin to lobby the legislature.
"We gotta make sure that when you tighten the screws we have to make sure it doesn't hurt us too much."
Back to the issue at hand: the financial emergency.
Hinojosa wants to move it forward. He is saying that it is not critical that they have a vote today.
Leigh Ann Ellis: "we want to see specifics." "How much money are we talking about?"
"We need to see the specifics before we vote on it."
Much clapping in the auditorium.
Lowe wants to meet weekly and have the administration meet daily. He wants the board to meet weekly at 3:00 on Thursday.
Jerome Garza: "we need to be here at the table."
Jerome Garza moves that the board postpone the action on the financial emergency. The board wants to be more involved in this!
"So no one will be unemployed over the weekend."
Lowe wants to declare the emergency--but direct the administration not to do a RIF.
Board votes to declare a state of financial emergency but also to direct Hinojosa NOT to start RIF'ing employees.
It's 5:00 and the Board is in closed session.
According to what was just voted on, we'll be back in this room next Thursday as the Board tries to figure out what to do.