(June 21) The Upland Unified School District is asking its teachers to accept salary and benefit cuts in the upcoming school year of roughly $26,000 each on average, according to the union representing those teachers.
The district maintains the salary and benefit reductions will be somewhat more modest than the union is representing.
While the union claims the drawdowns are tantamount to one third of the teachers’ total benefit packages, the district maintains the cuts are closer to a one-fifth reduction.
The discrepancy consists largely of how the parings are to be structured.
Those reductions, whatever they amount to in terms of percentage, are needed if the district is to overcome a projected deficit in the neighborhood of $9 million in 2013-14.
The Upland Teachers Association has countered with a proposal by which each teacher would agree to make $20,400 in concessions on average to help the district ride out the current financial storm.
Currently, teachers in Upland Unified are paid from $37,758 to $78,575 per year, depending on educational level, certification, and seniority.
In 2007, Upland Unified boasted $20 million in reserves. But in the six years since, a stagnating economy, declining property values and dwindling income into the district, together with increases in teacher and other employee pay have eaten up that surplus and left the district, according to projections, in the position of spending nearly $9 million more than it will take in during the next school year if it does not trim its expenses from its operational budget from the just concluded 2012-13 school year.
Gary Rutherford, the district’s superintendent until his abrupt departure in January to assume the superintendent’s position with the Desert Sands Unified School District in Riverside County, had overseen a gradual decline in the district’s financial condition.
The San Bernardino County Superintendent of Schools issues ratings of the fiscal conditions of districts throughout the county on a regular basis, using a three tier system. Those districts that have revenue exceeding their operational costs and can maintain reserves are designated “positive.” Those that essentially break even with regard to their revenues and expenditures are pegged as “qualified.” Those that take in less money than they spend are rated “negative.”
In fiscal year 2010-11, both the first and second interim financial ratings for Upland Unified were positive.  In 2011-12, the first interim report was positive and the second was qualified.  In 2012-13, while Rutherford again sought a positive rating, the first interim report rated the district as qualified. For the second interim report, Rutherford sought a qualified rating, only to be met with the news, just as he was departing the district, that the rating was negative.
In the aftermath of Rutherford’s departure, Sherrie Black was enlisted to serve as interim superintendent. Though she has been credited with being more forthcoming to both the school board and the public about the district’s financial circumstance than her predecessor, Black has been struggling with the district’s financial situation her entire tenure as interim superintendent.
Two months ago, the district hired a new superintendent for the upcoming 2013-14 school year, Dr. Nancy Kelly, who is in the process of leaving as Redondo Beach Unified School District human resources director.
It is yet to be seen if Kelly will have the necessary wherewithal to map the district out of its financial doldrums.
Last December, Rutherford and Black, who was then assistant superintendent of human resources for the district, were anticipating a 2013-14 deficit of $4.5 million. In the last six months, that projected deficit has doubled, even as efforts to redress it have intensified.
According to Black, 91 percent of the district budget consists of personnel costs and the only solution to the fiscal crisis is to rein in those costs, which means significant concessions from the district’s collective bargaining groups with regard to contracts that have already been put into place and which will need to be renewed in upcoming years.
Already, the unions have given an indication they are willing to bend substantially in deference to  financial reality. The question remains, however, whether that will keep the district solvent.
In a letter to teachers, the negotiator for the Upland Teacher Association, Debbie Glenn, said that in response to the district’s proposal that teachers collectively accept $5.8 million in cuts, she countered with accepting $4 million in cuts.
The district wanted increased class sizes and caseloads, furlough days, salary freezes and rollbacks as well as increases in the teachers’ contributions to their health care plans. The teachers’ association’s counterproposal called for no change in class sizes but allows furlough days, salary freezes and a more modest employee contribution to health care than the district is requesting.
According to Black, the district has hitherto covered in its entirety the health care plans for teachers’ and their family members, translating to an insurance cost of roughly $15,000 to $16,000 per employee per year.
The association is now willing to have its members pick up $6,000 of those costs.
Overall, the association is prepared to see individual teacher’s monthly compensation packages lowered by $1,500 to $1,900 per month. The association has indicated it is willing to abide by these reductions for two years, until June 2015, if the district’s financial condition does not approve, and one year, until June 2014, if the state restores funding by that point.
Despite the association’s flexibility on the salary and benefit issues, no actual agreement has been made. Last week, the district threatened to declare an impasse and enforce its dictates unilaterally. Further discussions are on tap this week but had not been concluded by press time.
The district maintains its problems stem less from past fiscal mismanagement on the part of Rutherford and former assistant superintendent of business services Deo Persaud than the state’s practice of deferring payments to school districts.
Just under 79 percent of its revenue comes from the state of California, but at present and for the last three years, the state has been paying Upland Unified and other districts an average of 77 cents per dollar owed to it on time. The rest of that money has been deferred, resulting in the district, at its own financing cost, making arrangements to borrow money against that future revenue, using what are referred to as Tax Revenue Anticipation Notes, a type of short term bond. According to auditors, dependence on those bonds and the financing costs associated with them have snowballed on the district. Moreover, the state has made no cost of living adjustments for the district since 2008.