By admin 
The Sacramento City Unified School District is dangerously circumventing the authority of county education officials by moving forward with a borrow-and-spend strategy to delay insolvency.
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A financial advisor for the Sacramento County Office of Education had rejected a lucrative contract extension for teachers that set this scheme in motion. Sac City Unified is going broke but instead of following county direction to take meaningful actions to free up $150 million in cash by June 2027, its board members wanted to extend a labor agreement with its teachers that significantly improves overall teacher compensation.
All seven Sac City Unified board members were elected with the endorsements and financial funding from the Sacramento City Teachers Association. And now, they are acting as if the county didn’t reject their contract extension with the teachers at all. They seem to be pretending that the agreement exists.
If that sounds to you as if the district is taking its orders from the teachers and not the county, then you’re not alone.
The playbook of a wayward Sacramento school district, and that of a toothless ally in State Superintendent of Public Instruction Tony Thurmond, is becoming clearer.
County education officials, who have fiscal oversight authority over county public schools, began exerting it after determining that Sac City Unified was running out of cash. Last year, the county appointed a fiscal advisor, Luz Cázares, to sort out the district’s broken budget.
Cázares flagged a doozy of a dumb idea in July that involved the district’s plan to raid the deepest pocket in state government, the California Public Employees Retirement System.
The district was on the brink of using $68 million from a trust fund for retired teacher health benefits to help pay the bills in the short-term. In exchange for this bailout, the teachers’ contract would be extended for another three years.
Cázares warned the district against using a fund for long-term obligations to maintain unsustainable spending, a terrible idea. The county ultimately rescinded the teachers’ contract extension. Then suddenly, a shadow contract scheme began to emerge.
Sac City officials went straight to CalPERS and requested an initial withdrawal of $21 million. CalPERS has told The Bee’s Chaewon Chung that it has “disbursed” the money, but not actually cut the check and delivered the money as of Tuesday.
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Even though there is no contract extension, the teachers union expects Sac City to act as if one exists. It is quite a deal for the teachers: The agreement would also bar the district from seeking money-saving changes, creating what is known as a closed contract.
“We expect the district to honor the agreement,” Nikki Milevsky, president of the Sacramento City Teachers Association, told Chung. This statement suggests the agreement exists. It does not.
There is a clear chain of command here that Sac City is trying to ignore. The non-contract runs afoul of SCOE’s directive and the opinion of an independent state auditor, Michael Fine.
Fine told Chung that CalPERS would likely instruct Sac City Unified to return the funds if it sent the check. “They’ll ask for the money back, and everything will be fine,” he said.
Really?
Milevsky first raised the idea of Thurmond overruling the county within hours of the county rescinding the teachers’ contract extension.
Technically, Thurmond has the authority to strip a county education office of control in circumstances like this when it is being “not effective.” But all the evidence points to the contrary. The obvious root problem of ineffectiveness is the school district, not the county and the state auditing team that happen to be on the same page.
Thurmond has no legal leg to stand on if he tries to take charge locally. He sent a letter threatening to do so. But Thurmond’s antics appear to be all bluster and no beef.
This is an out-of-control school district that is trying to delay a day of reckoning by making its long-term finances even worse. Before disbursing any more money, perhaps CalPERS, based in Sacramento, should have someone follow the local news and recognize that the county office of education has authority to stop Sac City Unified’s irresponsible borrowing.
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