After the county swooped in last year to help the Gilroy Unified School District get its finances in order, the fiscal panorama is looking much brighter – so much so that teachers might receive their first pay increase in seven years.
The Santa Clara County Office of Education’s Fiscal Advisor Nimrat Johal – who was sent down to Gilroy in February 2012 to help straighten things out – is still working closely with district staff. But GUSD could be free of County control as early as January, if Johal certifies the district’s First Interim Fiscal Report as “positive,” a designation that expresses faith that the district will be able to meet its financial obligations for the current and subsequent two fiscal years.
“Things are definitely heading in the right direction and we are very hopeful that the district will continue to make even stronger strides in the future,” said Johal, who was pleased to see the district’s strong reserve and conservative approach to finances – all signs the budget will be in good health for several years to come.
Today, about $8.7 million, or more than nine percent (the minimum requirement is three percent) of the district budget is in reserves – and thanks to statewide funding changes and a new management team, GUSD is a healthy distance from where it was exactly one year ago.
Since February, the three top positions in the business office have been replaced by employees who live close to the communities they serve.
This includes Assistant Superintendent of Business Services Alvaro Meza, a Gilroy resident who took control of the district’s finances starting this summer.
“We feel they are definitely on the right track and we have a lot of confidence in Alvaro’s abilities to lead the district (fiscally),” said Johal.
She left the district office in June and continues to work remotely with the district since Meza came aboard.
At the time Johal arrived in the district office, GUSD was struggling with cash flow issues, an usually high personnel turnover in the business office, and problems with fiscal oversight, resulting in missed deadlines, administrative mistakes and even the accidental cancellation of employee health benefits.
“I think last year it wasn’t as much a cash issue as management and a cash crunch,” Meza opined.
GUSD Superintendent Debbie Flores took responsibility for the errors and in March said the district had cleaned house. The district received a $3.8 million loan from the county for operating expenses and borrowed internally against its capital facilities fund to get back on track.
Now that things are on the up and up, teachers, psychologists, counselors, program specialists, academic coordinators and nurses and other members of the Gilroy Teachers Association, might see increases to their systematic pay scale, known as step-and-column, for the first time in seven years, according to Meza.
“We are close in reaching a tentative agreement with the GTA (Gilroy Teachers Association) – that is going to be publicly disclosed once they verify,” said Meza, who expects the agreement should be reached by mid-January.
The salary increase currently being discussed is less than the seven percent the GTA originally asked for. GTA Lead Negotiator and President Jonathan Bass said he could not divulge anything else about current negotiations.
Teachers have built-in raises in their step-and-column pay scale – which systematically increases the pay of teachers based on their education level and the number of years they have taught – but the scale has been frozen for seven years.
The new teacher contract will increase the salary in each cell of the step-and-column charts, essentially bringing a raise to every member of the GTA regardless of their current pay level, explained Bass.
The GTA had hoped to hammer out a new contract for the 2013-14 school year last spring, but negotiations carried over into the fall and will likely conclude in January if members accept the recommended contract, which they voted on this week. If approved, the contract will go to school trustees for a vote in January.
“This was a good time to be in negotiations both because there was an anticipated surplus in the reserves and because the state’s formula for funding schools changed,” Bass noted.
Another factor contributing significantly to the district’s healthier financial status is the Local Control Funding Formula enacted by Gov. Jerry Brown earlier this year, explains Meza. Under the new funding formula, school districts receive funding based on their demographic profile. This means Gilroy will get approximately $3.3 million more than they did last year because the district has so many English Language Learners and students eligible for free and reduced-price meals.
In subsequent years, GUSD is expected to gain an additional $4 to $5 million a year through the Local Control Funding Formula, but the amount for each year will depend on the amount of money the governor approves for schools in his January budget proposals, Meza said.
New leadership in the district office plays another essential role on GUSD’s road to fiscal recovery.
The top three positions in the business office – including the director of Finance, the accounting supervisor and Meza’s position all turned over in the last year – after Johal arrived.
Meza was previously the assistant superintendent of business services in the Santa Cruz City Schools district, but had been living in Gilroy for three years. So when the same position opened up in Gilroy, it seemed meant to be.
“It’s kind of tacky to say, but it was my dream come true,” he said.
Now, all three people filling the top leadership positions in the office live close by. In addition to Meza, this includes Director of Finance Kimberly Mason and Accounting Supervisor Judy McBrearty.
“They all live within a 40 mile radius of Gilroy,” said Meza, who notes that his own children – including his 4-year old-daughter and 2-year-old son – will soon be attending Gilroy schools, starting when his daughter enrolls in Las Animas Elementary School next year.
Meza is already thinking ahead and working to ensure the County won’t have to come back to the Garlic Capital after GUSD’s financial affairs are squared away.
“I’m also conservatively budgeting the new revenue,” he continued. “My motto is, ‘it’s always to be to pleasantly surprised than bitterly disappointed,’ so I budget on the conservative.”
