The recent school board meeting Jan. 16 brought a raise to certificated staff and included two audits – one of which discovered an estimated $1.4 million in bond money that was in accounts, but not on the books.
Teacher Raises
Gilroy teachers will get a 4.5 percent salary increase, a decision that will cost the district $1,881,340 this school year, but will still keep GUSD’s fiscal reserves healthy and out of the red.
The GTA originally asked for a 7 percent salary increase to cover inflation and the ever-increasing cost of living.
The salary increase is retroactive to the start of the school year, so all certificated staff (including nurses, speech therapists, teachers and counselors) will receive the retroactive pay for July – December as part of the Jan. 31 payroll, and the raise will apply to all future paychecks through June.
The current salary increases will cause the Gilroy Unified School District’s 9.58 percent budget reserve to fall to 7.3 percent – still more than twice the 3 percent reserve required by the state.
The district is currently budgeting with 40 percent of the Local Control Funding Formula money it expects to see from the new statewide law enacted by Gov. Jerry Brown earlier this year.
The new state funding formula will distribute funds based on the demographic profiles of school districts, so Gilroy will benefit from the formula as the district serves a large number of students from low-income families.
If GUSD receives more than the anticipated funding when LCFF goes into effect next school year, GUSD has agreed to discuss increasing teacher salaries. But, if the expected funds from the state don’t come through, GTA has agreed to come back to the table to discuss how this might impact the salaries of certificated staff.
Teachers are paid on a “step and column” scale, meaning they systematically receive a raise based on their education level and the number of years they have taught, but the “step and column” scale in Gilroy has been frozen for seven years.
Negotiations between the GTA and the school district started last spring and continued through the Jan. 16 school board meeting in which trustees unanimously approved a tentative agreement.
There will be an additional one-time, 1 percent increase in addition to the 4.5 percent raise, which will be paid to certificated staff in June to cover the costs of staff development necessary to roll out the new Common Core State Standards. The 1 percent increase will be funded through the Common Core program, which is designed to prepare students to develop deeper critical thinking skills and to prepare them for an increasingly global world. The state-developed academic guidelines will shape how students are educated and tested starting next school year.
Audit on district health
An audit on GUSD’s overall financial health found that an estimated $1.4 million in Measure P bond money had already been budgeted but wasn’t properly accounted for in district records.
“The money wasn’t missing. It just wasn’t recorded on the books,” said Auditor James Marta of the James Marta & Company LLP.
Marta credited the mistake to high turnover in the GUSD business office last year, which resulted in missed deadlines, administrative mistakes and kinks in operational monitoring throughout 2013.
“The core is getting the resources and people in place,” said Marta, who presented the audit findings to trustees at the school board meeting.
Since February 2013, the three top positions in the district’s business office have turned over.
Marta was very complimentary of the new staff, including Meza, who took control of the district’s finances starting this summer.
“Considering where we were for a couple years I actually expected worse with the turnover we’ve had, so I appreciate your acknowledging the district’s efforts to bring in quality people,” said GUSD Superintendent Debbie Flores at the end of the audit.
The report showed budget finances are looking up, with GUSD touting a strong 9.4 percent reserve saved away “for economic uncertainties” – up from 8.9 percent last year.
Of the general fund expenditures, salaries gobbled up 66 percent, with benefits following at 18 percent and the costs of services, books and supplies finishing up the pie chart.
The percentage of general fund expenditures eaten up by salaries grew proportionally in many districts as the state struggled with its own financial crisis, Marta explained. While cities and counties had the freedom to implement certain money-saving measures by limiting or canceling services during a budget crunch until the funds reappeared, schools couldn’t just close their doors. Rather, many cut spending in other areas before asking staff to take a pay hit.
“Government entities have been under a lot of stress,” Marta said. “And school districts can’t cut services like the counties can.”
Measure P Bond Audit
The audit of Gilroy’s 2008 Measure P General Obligation Building Fund Bond revealed that most school improvement projects use numerous funding sources and the district must have a system in place to allocate, track and expend these sources.
“You have to have a system in place to make sure you’re not supplanting,” said Marta, who explained that “supplanting” is the process of paying off old bonds with newer ones.
Measure P was passed in 2008 with about 68 percent approval and brought in $150,000,000 to help with capital projects within the district.
At the time Marta put the audit presentation together in early January, about $23 million was left in undesignated Measure P funds – which may already be committed to projects, but have yet to be spent, he explained.
Auditors and district staff adjusted the beginning fund balance to include the $1.4 million in Measure P bond money, which had been budgeted but wasn’t properly accounted for in district records.
The audit of Measure P funds showed everything else was in ship shape. Money is being spent on the right types of projects; bond proceeds are being deposited into the correct accounts; and GUSD has a sound system in place for tracking its bond fund expenditures.
Coming up:
The next regular Board of Education meeting will be held Thursday, Jan. 30 at GUSD district offices, located at 7810 Arroyo Circle in Gilroy.
