Superintendents Blue Ribbon Committee Report Addressing the - - PowerPoint PPT Presentation

Superintendent’s Blue Ribbon Committee Report

Addressing the Economic Shock of Diablo Canyon Power Plant Closure

December 2017

Blue Ribbon Committee Members

James J. Brescia, Ed.D. Kevin Bumen Monica Grant Melissa James Christine Johnson

Facilit itated d by: y: Ron Bennett

Jane Maxwell, Ed.D. Nelda Olvera Refujio Rodriguez Gilbert H. Stork, Ed.D. Bob Wacker

• Conduct independent assessment of Diablo Canyon impacts
• Recommend possible remedies for $8M annual loss
• Focus on most important goal:

Present and future success of students

Committee Purpose

• 10 meetings, 3 hours each
• Full access to any and all data requested
• Interviews conducted with District’s

stakeholders including administrators, school principals, teachers, staff, union representatives

Committee Process

Diablo Closure = $8M M Annual Loss

• 10% of the District’s annual
• perating budget
• Equivalent of 100 teaching positions
• Represents $1,700 in per-pupil funding

Scope of Challenge

Budget Driver is Peo eopl ple

• Wages & Benefits

85% *

• Services & Operations

10%

• Materials & Supplies

5%

*Virtually all stipulated via collective bargaining

$8M M annual loss = 100 teaching positions

Impact of Diablo: 10%

Scope of Challenge

* Virtually all stipulated via

collective bargaining

Scope of Challenge

• $36M

M in negotiated mitigation money rejected by the CPUC Administrative Law Judge

• Bridge funding is threatened = Impacts will be felt sooner
• Plant could close sooner = Impacts would be greater
• Health Care costs projected to increase

from $7.1M 1M to $10.5M 10.5M by 2025.

• These increased costs are in addi

dditi tion

• n to
• $8M

$8M in property tax losses

Must acknowledge these hard truths:

• Budget gap is significant
• No easy solution
• Can’t avoid cuts
• Urgency crucial — Diablo could close prematurely

Factors to Consider

• Act swiftly
• Communicate clearly and frequently with stakeholders
• Avoid unilateral decision making
• Strive for consensus and shared responsibility among all stakeholder groups
• Respond to emerging opportunities
• Be entrepreneurial
• Continue to pursue any and all mitigation money but plan for future without

Advice to District

• 1. Parcel Tax ($3M

M – $6M $6M)

• 2/3rds vote required
• $80 to $160 annual tax
• Conduct feasibility study

Revenue Enhancements

• 2. Surplus Property: Rent, Sell or Develop ($200K

K – $5M) M)

• Recurring rental money for operating budget
• Sale of property for endowment
• Explore Public/Private partnership for development of properties

Revenue Enhancements

• 3. Negotiate for Fairer Inter-district Fees ($400K)

K)

• Curren

rrently ly no reimbu imbursem semen ent t for r 160 transf ansfer er stude udents nts

Revenue Enhancements

• 4. Create Permanent Endowment

($10M M endowment generates $400K) K)

• Generate ongoing returns to enhance opportunities for

learning, to support student achievement, and help fund educational programs

Revenue Enhancements

• 1. Attrition

Potential Savings: TBD

• Avoid layoffs
• 2. Monitor Early Retirement Program Annually

Potential Savings: TBD

• No short-term savings,

but continue to evaluate

Cost Containment Measures

• 3. Modest Increase in Class Size

Potential Maximum Savings: $2.5 .5M

• Implement via attrition, not layoffs
• Increases not to exceed terms of current negotiated contracts

Cost Containment Measures

Current approximate averages: K–3: 23 students/per teacher 4–12: 26 students/per teacher Current negotiated contractual average maximum: K–3: 28 students/teacher 4–12: 32 students/teacher

*Note: Numbers are based on average class size; individual class maximums can exceed class average per contract

• 4. School Closures

Potential Savings: $500K 0K

• 5. Health Care Cap

Potential Savings: $2M M – $3M $3M

• Annual spending projected to increase from $7.1M

1M currently to $10 10.5M .5M in 2025, compounding the budget problem

• 6. Evaluate Salary Scale

Potential Savings: TBD

Cost Containment Measures

Scenario 1: All Cuts

Increased Class Sizes

$2.5M 5M

Health Care Cap

$2M M – 3M 3M

School Closure

$500 00K

$6 $6M M Savings

+ +

Scenario 2: All Revenue Enhancements

Parcel Tax

$6M $6M

Surplus Property

$1M $1M

Inter-district Fees

$400 00K

$7 $7.8M 8M + Savings

+ +

Endowment

$400 00K

+

Scenario 3: Combined Actions

Increased Class Sizes

$1M $1M

Health Care Cap

$1M $1M

Parcel Tax

$3M $3M

$6 $6M M Savings

+ + +

Efficiencies

$1M $1M

• Budget gap is not anyone’s fault, but is everyone’s burden
• Proposed remedies will have a dramatic impact on people
• Important that this be a community-wide discussion

Final Thoughts: A Shared Responsibility

Superintendent’s Blue Ribbon Committee Report

Addressing the Economic Shock of Diablo Canyon Power Plant Closure

December 2017