DENAIR — Denair Unified took steps to face its financial troubles last week, publicly laying out its predicament and its plan, and strategizing behind closed doors about solutions. Avoiding its own "fiscal cliff" will take severe and immediate cuts that must be negotiated.
In a letter to Denair parents sent home Friday, Superintendent Ed Parraz said the district needs to make $350,000 in cuts to finish this school year and avoid a state takeover. In addition, he said $710,000 worth of unspecified layoffs are needed for the 2013-14 school year to end years of deficit spending.
Employees will be included in building the budget plan, the letter says. "Because of the severe cuts that have to be made, successful negotiations are more critical than ever before," and urging everyone to remember that "students must come first."
The board met in closed session Thursday night to discuss negotiations with teachers and support staff. Formal negotiations will wait until a procedural step is cleared at its next meeting Thursday. Board members said that delay was at the request of the Denair Unified Teachers Association.
Barry Cole, president of the teachers union, said delays were caused by constantly shifting numbers provided by the district.
"There are trust issues with the information we've been given," he said. A straightforward analysis by an outside fiscal adviser helped, he said. "Now we know what's at stake. Now we know what the numbers really are."
Cole said the district hired four teachers last year despite union suggestions to rearrange schedules of existing staff. "The problem isn't that they haven't laid anybody off, it's their continual hiring. Each year, we've asked them to stop hiring," Cole said.
School board President Louisa Allen said layoffs might be unavoidable, but she rejected suggestions from some in the community to fire Parraz, saying he kept the board informed.
"To me, if the ship goes down, we all go with it," she said.
Board members all responded to questions by e-mail.
Trustee Julian Wren said he was concerned by people he spoke with who suggested the state should take over the district, a possibility only if the district fails to cut costs and must negotiate a state loan to remain solvent.
"Anyone who thinks a state takeover is a good approach does not understand all of the facts," Wren said. Nothing is off the table, he said.
"We have been working diligently with our fiscal adviser Terri Ryland and the (Stanislaus) County Office of Education, and I am optimistic that we have crafted a comprehensive plan to balance the budget and return to solvency," Wren said.
John Plett, who joined the board a year ago, said members were "consistently informed that the fiscal problems were mounting," but chose to save jobs.
"There are certainly people that criticize the district leadership for allowing this fiscal situation to develop," Plett wrote, "but I also sense that many school families are well aware of the difficult nature of the economy and are supportive in the efforts to recover."
In its efforts to survive the year, board members made clear they are counting on employees to take a significant pay cut. A 3.5 percent cut districtwide would work, Parraz says in the letter, but that would be for the full school year. There are only six months of pay periods remaining, meaning the required salary concessions will need to be deeper.
Teachers legally cannot be laid off at this point in the year, but support staff such as bus drivers and custodians could with 45 to 60 days' notice. Kyle Harvey, a labor negotiator for the union that represents classified employees, said he did not expect that to happen this year, but recognizes pay cuts will be necessary.
"We're just looking for parity, for the fair share," said Harvey, speaking for the California School Employees Association. He said the union always has had a strong relationship with the district. Support staff, in fact, negotiated a 4 percent raise more than a year ago, but agreed to wait for it until the district's finances were in better shape.
The district was one of very few in Stanislaus County that had nothing set aside in case the tax initiative Proposition 30 failed and midyear budget cuts were required. Plett said the board's plan was laid out in an initial bargaining proposal, which had not been negotiated, for "deep cuts in salaries, furlough days and various other personnel and program reductions."
The lack of a concrete contingency plan for the uncertain passage of Proposition 30 was one of the danger signs in Denair that county education budget overseers saw this fall.
Another was that the district's enrollment fell for this school year while Denair officials projected it would rise; the 2012-13 budget depended on that additional revenue. Denair now has 951 students, down 30 percent from its peak five years ago.
An administrative change to fold Denair Academic Avenues charter school into the regular district, perhaps calling it a magnet school, is being considered.
Also troubling was a large jump in cost overruns for 2011-12 between its June estimate and September's final numbers. A deficit in its everyday operating fund, projected to be less than $500,000, ballooned to $700,748 over the summer.
Modesto Bee education reporter Nan Austin can be reached at naustin@modbee. com or (209) 578-2339, and on Twitter, @NanAustin.