CUSD reviews budget options as school closures loom

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Town Crier File Photo
Montclaire Elementary School, above, is the one school in the Cupertino Union School District located in Los Altos.

With the specter of school closures looming large, the Cupertino Union School District Board of Education called a special meeting last week to review alternative potential ways to cut costs or generate additional revenue.

Among the options to save money were instituting furlough days, increasing class sizes and eliminating various staff positions. On the revenue side, the board reviewed different ways to raise money, in particular whether to put a parcel tax before voters.

“School closures is not the entire picture; that’s a small portion of what we’re looking at to become fiscally solvent,” Superintendent Stacy McAfee-Yao said. “It really is a combination of many different levers and strategies.”

The board is currently weighing whether to close schools as a way to cut expenses and raise money by leasing out the campuses themselves. The board heard six potential school closure scenarios drawn up by a Citizens Advisory Committee Oct. 22.

At both the Oct. 22 meeting and last week’s meeting, the board heard from dozens of parents and community members, who nearly uniformly opposed closing schools.

“Is closing schools the only viable option that’s on the table?” one commenter asked. “Because it seems like this option is turning parents, maybe not against each other, but instead of thinking about the school district as a whole, people are thinking of their own school right now.”

Other speakers said the district must be more transparent in its decision-making and that parents weren’t given enough warning that school closures could be coming. One commenter said the board should be more responsive to the concerns being raised at meetings.

“It feels like a one-way conversation. That is more of a panic to the community than anything else,” the speaker said. “Communication is critical.”

Cost cutting

During the meeting, the board heard a presentation from district administrators about the current budget picture, as well as potential ways to cut expenses.

The district currently faces a structural deficit of $2.3 million annually. On top of that, when the district’s Measure A parcel tax expires in 2023, it will lose $8.6 million annually. The district can’t include the revenue from the parcel tax in its budget projections after it expires, unless voters approve an extension. The district is also planning for a gap of $5 million to $7 million because of an expected continued decline in enrollment. If the district decided to give employees a raise, it would cost $1.3 million per every 1% increase in salary.

After reviewing the budget outlook, district staff discussed possible “levers” the board could pull to save money. They included closing schools, but also a variety of other options.

Closing an elementary school is estimated to net the district $1.3 million annually ($400,000 of that in cost savings, plus another $900,000 from leasing out the campus itself). A middle school closure comes out to $1.9 million ($800,000 in savings, $1.1 million from leasing).

Other possible savings included introducing furlough days ($640,000 in savings per furlough day), eliminating librarians at school sites ($819,000 in savings) and increasing grades 1-3 class sizes from 24 to 28 students ($3.74 million saved), among other options.

“These board levers will have drastic impacts to the services that we provide students,” McAfee-Yao said. “We have done deep cuts every year. We’ve been able to keep them, for the most part, away from the classrooms. But when we get to this level, … these are pretty impactful and we will feel them across the district.”

Board members asked a range of questions about what the various cuts might mean for the district, including what the impact of each option would be, how different options could be combined and what the timeline for implementation would look like.

Raising revenue

After hearing about ways to cut costs last week, the board reviewed the district’s current funding, as well as potential ways to raise additional revenue.

CUSD is largely funded based on the number of students in the district. As enrollment has dropped in recent years (from a peak of 19,194 students in 2013 to roughly 15,680 in 2020), the district has faced repeated budget cuts.

Now, as the coronavirus pandemic puts pressure on the state’s budget, district COO Jeff Bowman said the district could potentially face cuts of 5-10% to the base funding it receives for each student.

With the funding picture looking grim, Bowman presented potential ways to raise money, including increasing the rent the district charges to lease out currently unused school sites, as well as the potential for increased parent contributions. Multiple parents spoke at last week’s meeting, urging the district to look to parents for donations.

Another way to raise money is to get voters to pass a parcel-tax measure. In March, the district’s Measure O parcel tax was defeated, failing to get the needed two-thirds vote. It would have raised $5.5 million annually.

Last week, Bowman presented the board with options for different kinds of parcel taxes it could place on the ballot. One big question is whether to seek a flat-rate parcel tax (where each property is charged the same amount) or a square-footage parcel tax (where the tax depends on the size of either the lot itself or what is built on it).

To place a parcel tax on the ballot for a May 4 election, Bowman said the board would have to decide by Jan. 21. For a June 8 election, the decision must be made by Feb. 25.

During the public comment section, some speakers argued for the square-footage model, including Cupertino Mayor Steven Scharf and Councilwoman Liang Chao. Chao is also a former CUSD board member.

All five board members said they support putting a parcel tax on the ballot. Jerry Liu and Satheesh Madhathil both said they want a square-footage model, while Lori Cunningham, Phyllis Vogel and Sylvia Leong all said they hadn’t yet decided.

The board is scheduled to meet again Thursday to discuss a potential parcel tax, as well as whether to close schools or implement other cost-saving measures.

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