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State senators hear advice on school debt and takeovers

By Katy Murphy
Inside Bay Area
12/4/2007

OAKLAND — Since 1990, seven California school districts — four of them in the Bay Area — have faced fiscal crises serious enough to thrust them into state control, millions of dollars in debt.

On Monday, experts warned members of the state Senate Education Committee that more districts are poised to find themselves in a similarly dangerous position as they watch their enrollment — and state funding — shrink.

A $10 billion state budget shortfall is expected to make matters worse.

The education committee came to Oakland City Hall on Monday to discuss ways the state can help prevent districts from falling into such a crisis. They also heard suggestions about how the state department of education can do a better job of restoring fiscal solvency to schools under its control.

"We're trying to learn about how to do this better," said Sen. Jack Scott, chairman of the committee.

Experts suggested a wide range of proposed reforms, from increasing training for financial officers and school board members to changing the way urban schools are funded.

The first school district to enter state receivership was West Contra Costa, then known as Richmond Unified, which borrowed $28.5 million from the state in 1990 and 1991. The district is still repaying the interest on that loan, and it has a trustee overseeing its expenditures.

West Contra Costa was followed by Coachella Valley in 1992; Compton in 1993; Emery in 2001; West Fresno in 2003; Oakland in 2003 and Vallejo in 2004.

The Oakland school district received a $100 million emergency loan, the largest issued to a California school district.

While the state department of education was charged with fixing Oakland Unified's fiscal problems, several speakers told the committee that the department seems to have set its sights on education reform instead.

Alameda County Superintendent Sheila Jordan noted that none of Oakland's three state administrators have been financial experts, as the district's takeover law requires. She said her office asked the state to reject Oakland's latest budget proposal because it projected a deficit. She proposed appointing a fiscal adviser for the district, which will soon choose its own superintendent.

"School reform, no matter how great it sounds, if it's built on a fiscal house of cards, will fail," Jordan said.

Some cited Oakland's charter school movement as an example of the conflict between the state's educational philosophy and sound fiscal policy.

More than 17 percent of Oakland's public school children attend a growing number of independently run charter schools, some of which were created by the state administration. As children leave district schools for charters, the per-student state funding follows them out the door, causing a district's budget to shrink.

The enrollment of Oakland's non-charter schools, now below 39,000, has dropped by some 14,000 students since 2000. More than 7,000 students attend charter schools.

"I, for one, would not encourage charter schools," said Henry Der, a former state administrator for Emery Unified.

Javetta Robinson, Oakland's former chief financial officer who is now the CFO for Berkeley Unified, was one of many speakers to address another troubling consequence of state administration: staff turnover.

Robinson spoke from experience. This summer, she was fired by former State Administrator Kimberly Statham, apparently over professional differences. About two months later Statham, herself, resigned. Oakland has had three state administrators in four and a half years.

"I really think that stability in staff is the key to success in any school district," Robinson said.

Robinson also said improved communication between state and county offices of education and increased school board involvement were essential.

Sen. Tom Torlakson, D-Antioch, whose district includes most of Contra Costa County, said he left the session with at least a dozen ideas for reform, particularly about early interventions for struggling schools and the roles of the county and state superintendents.

"I see the need for amendments to the existing laws," he said.


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