San Francisco Government SmartTranscripts:

[Mr. Trujillo (Board Office/Zoom Host)]: Post caption American Sign Language interpreter services throughout today's board meeting. Live transcription can be found here at sfusd.edu/boardtranscript. Attendees who wish to provide public comment to the board and would like an ASL interpreter can use the q and a box in the Zoom app to type their name or handle and list the items and agenda they would like to comment on. The attendees will need to have a functioning camera in order to communicate with the interpreter and board. When it is the attendees opportunity to provide comment, the Zoom host will promote the attendee to panelists and enable the attendee's video. Any member of the public may email their comment with the agenda item identified on the comment to boardoffice@sfusd.edu by 2PM the day of the meeting. If they do not wish to make the comment during the board meeting, the comments will be read into the record. SFUSD will provide interpretation throughout today's board meeting. Translation, go ahead.

[Luis (Interpretation Services)]: Thank you. SFUSD is suffering interpretation services in Spanish and Cantonese. If you need interpretation, please dial the following phone number. After dialing, please introduce the PIN number. This message will be repeated in Spanish and Cantonese. Interpreter, please. Thank you.

[Niru Jayaraman (Chief Financial Officer)]: Thank you, Luis.

[Jennifer Shuster (Interim Executive Director, Budget Office)]: Thank you.

[Phil Kim (President)]: The special meeting of the Board of Education for 03/04/2026 is now called to order at 05:10PM. Roll call please.

[Mr. Trujillo (Board Office/Zoom Host)]: Commissioner Ray? Here. Commissioner Alexander? Here. Vice President Huling? President Kim? Here. Commissioner Weissman-Ward?

[Lisa Weissman-Ward (Commissioner)]: Here.

[Mr. Trujillo (Board Office/Zoom Host)]: Commissioner Gupta? Here. Do you want to speak to it?

[Phil Kim (President)]: I will.

[Mr. Trujillo (Board Office/Zoom Host)]: Okay. Commissioner Fisher? Form present.

[Phil Kim (President)]: Thank you. Hello and welcome to members of the public to this special meeting of the board of education of the San Francisco Unified School District. Please know that tonight public comment is limited to agenda items only. Each participant may speak for up to one minute. Staff will take the participant at the one minute mark. At one minute and five seconds, I've asked Mr. Trujillo to please turn off the mic and transition to the next speaker.

[Daniel Muñoz (Director of Position Control)]: Phil, we can't hear you online.

[Phil Kim (President)]: I ask members of the public to please respect that one minute limit so that we can hear from as many speakers as possible. Hello and welcome to members of the public to the special meeting of the Board of Education of the San Francisco Unified School District. Please know that tonight public comment is limited to agenda items only. Each participant may speak for up to one minute. Staff will thank the participant at the one minute mark. At one minute and five seconds, I have asked Mr. Trujillo to please turn off the mic and transition to the next speaker. I ask members of the public to please respect that one minute limit so that we can hear from as many speakers as possible. I encourage speakers who are speaking on the same topic to collaborate and combine their comments so that the Board can hear all viewpoints during a limited time. Please also note the Board accepts written public comments via email at boardofficefusc dot edu. Mr. Trujillo?

[Mr. Trujillo (Board Office/Zoom Host)]: I don't have any in person public comment. We'll move to Zoom. Members of Zoom, if you are a student, please raise your hand. We'll hear from first. I see no students. We'll go to members of the public. If you would like to speak on Zoom, please raise your hand. Okay. We will start with Bernice Casey. Go ahead and unmute.

[Bernice Casey (Public Commenter)]: Thank you very much. I've already emailed all of you and alerted you that the notice of this meeting was not posted at all the locations that you post the meeting. It wasn't in your calendar. It wasn't in the year long calendar for the school year, and I'm unsure on how you can continue to have a meeting when the public wasn't properly noticed. I've sent you screenshots of the calendars with the date and times. So, again, I'm not sure you can have this meeting when the public wasn't properly noticed. Thank you.

[Elliot (General Counsel, SFUSD)]: Thank you, president Kim. As you know, we are not allowed to respond to members of the public, but I'm responding to your question asking about whether or not this meeting was publicly posted in in accordance with the Brown Act. It is my understanding that it was. The reason being for that is that the meeting was posted both physically in the locations where staff generally post the agendas, and the item was posted on board docs in excess of the twenty four hour minimum. And I believe it was posted on Friday, which is seventy two hours plus. So this meeting has met all of the hallmarks required by the Brown Act.

[Phil Kim (President)]: Thank you. Are there any other members of the public for public comment? No. Okay. Thank you. Moving to item C, discussion, budget study session number one. I call on Deputy Superintendent of Business Services, Chris Mount Bonitas, to introduce this item.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Thank you, President Kim. This evening's special meeting is a study session. It gives the opportunity for the board to interact with myself and other professionals in the district about budget. In the past, it's been referenced both from the dais as well as in general that the board perhaps needs more time to discuss and ask questions in public to help inform the public of the condition of the budget, as well as to seek further understanding for themselves. I would also recommend it's a great time, since we're doing this prior to the second interim for you to perhaps write down questions that you think you want to be heard by a broader audience. It is Okay to ask me questions and staff questions that you already know the answer to if you just want a greater awareness in the public sphere. I did bring with me tonight my ever growing increasingly supportive and competent staff. I'm happy to report to you that we are building systems and staff. I want to introduce quickly get to the table, staff. So I want to make sure that everybody is familiar with the folks that are developing fiscal systems and foundation for the district moving forward, starting with my left, Jennifer Schuster, our interim executive director of the Budget Office. Jennifer is actually a longtime employee of the district. She's great to give not just perspective and history, but she has really stepped up and become a leader for the budget office and has taken on the challenges of all the training and opportunities and systems that we've offered. It's an awful lot of work. And I've started to invite Jennifer to the table more often. She's developed that level of competency that she's really becoming a resource for the board and for the district. We have Niru Jayaraman. Niru, we recruited from Los Angeles. She is the board's CFO. She is also your second fiduciary. You have myself and you have Niru, two fiduciaries for the district, which means that we are required to seek out and act on the district's best financial interest in our roles with the district and to advise you objectively and independently on your financial questions. And Niru is also a state recognized specialist at special education funding, which is one of her many talents. But it's one that I lean on because we all have different specializations, it's not as much one of mine. I defer to Niru in all things special education funding and reporting and we have Daniel Munoz also a recruit from LA and Daniel is your director of position control who just completed the first reconciliation of positions in the district I think ever in the district this was a requirement of FICMAT as well as CDE that Daniel has successfully navigated So he is able to provide the data that we need to really much more accurately produce budgets and projections for the district. So we only have one more key member that everybody's been saying we have to hire, which is our internal auditor which we still have not been able to source we have had it posted now for seven months but I am happy to say that with new advertising we finally have two applicants which is at least a start so that's good news So with that, I'm going to jump into the presentation. I am going to move quickly because like good budget and fiscal folks, we overproduced in documents for the amount of time that we have tonight. It's good resources. We will be posting them for the public, of course, after the meeting. So the first document that we're going to run through and some of it is foundational information that many of the board members might be aware of, the commissioners, but the public might find it instructive is the one that just says budget study session with today's date on it. And I'm just going to run through these slides fairly quickly. Marin, are you driving the presentation? So I'm going to move quickly. Just keep up. I'm not going to say too advanced, and we're just going to go sort of quickly. So looking at the first picture, this just outlines for the board. And this is a current breakdown of our revenues. These are the revenues or funding sources for the district federal, 4% state, LCFF, as well as some other dollars, 68% and local, 28%. Again, that local is a much larger percentage for San Francisco than it is for other districts. And on the left, we just have sort of an infographic of how that money comes to us and the process it goes through to get to us if you wanted some additional information. On the next page, we just are going further into the formula. The LCFF funding formula was implemented in 'thirteen-'fourteen after a major financial downturn in the state of California to equalize funding throughout the state of California based on a funding formula per student per grade level, as well as augmentations to that funding formula for our three focal groups, are illustrated there, which are low income students, English language learners, and foster youth and homeless children. Moving on to the next page, it just provides some additional information about the base amount. That's the formula as it applies to each student by grade level. The supplemental grants for those UPP unduplicated pupil percentages, which locally we call focal students. And then concentration grants, which is because we have a concentration of UPP students over the state required percentage and that gives us a little bit of additional revenue about 3% of our funding the next page additional sorts of funds this just gives an explanation something that folks can take away and point to for the public of what are the components of our local revenue and why are they such a greater portion of our budget than they are for perhaps other districts. And so this just illustrates those items. The first one is what is locally referred to as PEEF, the Public Education Enrichment Fund. I can always go into more detail on these, but that's a big chunk of our restricted revenue that comes through locally as well as the next bullet point, the next two actually, parcel taxes, QTEA and FWEA, which is primarily for staff salary augmentations also now committed to future benefit increases student success funds actually associated with the same source of funding that PEEF comes from but flows through the city and is more targeted in grants or in a grant format and then lease revenues and so that's revenues that we actually get from leasing out some of our old properties throughout the school district moving on to how do we develop the budget how do we actually know what revenues are So I always love this budget timeline. This illustrates the major points throughout one year of what we have to do for a budget. The thing I would remind the board and the public is this shows one year. We're actually working in three years always all at the same time. So we're always closing the last year's budget and doing analysis. We're always working and managing the current year budget, and we're always developing the next year's budget. So we always ask for which fiscal year we're talking about, not because we're being obtuse or difficult, but because we have to change our brain on which year and where that year is. Are we doing postmortem analysis? Are we doing management? Or are we doing planning? And because California requires us to do only one year at a time, every year can actually look significantly different, which is why we always ask for which fiscal year or start out with which fiscal year we're working in. So currently, we've closed last fiscal year. We're managing this fiscal year. And of course, we're developing next fiscal adopt in June. Moving on to the next page, we're often asked, how do you determine revenue assumptions? So revenue assumptions in a school district, they're not an incredibly complex formula. It just looks really complicated in charts when you put it up there like this. Right? So what we do is we cross reference enrollment in ADA, which stands for average daily attendance, and we cross reference it with the chart on the left. This is issued by FICMAT, the Fiscal Crisis and Management Assistance Team and School Services of California. That's the item on the left. It's called the dartboard. The dartboard gives us our financial assumptions that we are supposed to plug into our calculators to determine the amount of revenue. So revenues are not determined arbitrarily or randomly. We literally plug in the assumptions on the left, and this is a publicly available document online if anybody wants to pull it up, and it gives us many years to enter the assumptions. We then enter our projected enrollment as well as current enrollment and ADA, and it pre populates those revenues for us. Now, we still always have to go back and check what's coming in and what's being said in the governor's preliminary budget for adoption as well as the enacted budget to make sure any adjustments to these assumptions are made, but this is actually how we determine revenues. On the right is something that so I think that the district was more familiar with that dartboard prior to my arrival. What you're seeing on the right, this is the actual calculator. So we plug all of those assumptions and all of our local information into this calculator, which is just a very colorful and in-depth spreadsheet, and this calculates all of our revenues for us for the current and the next several years. And so that calculator is also publicly available. It is something that every district in the state uses at its tool. And I will happily tell you that we now use it in the district. In the past, we were not using the approved calculator. We were using manual spreadsheets that folks were keeping online either online or on their computers. Right? So that is a standard that we've implemented in the district.

[Supryia Ray (Commissioner)]: Local drives.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yes. Local drives. Yep.

[Jaime Huling (Vice President)]: Can I just ask a question?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yep. You can interrupt at any time.

[Jaime Huling (Vice President)]: For this DART board, it says that the LCFF planning factor Department of Finance statutory COLA is projected to be 3.02% for twenty six-twenty seven. But I think at least I've heard lower numbers. Do

[Lisa Weissman-Ward (Commissioner)]: we

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Correct.

[Jaime Huling (Vice President)]: Is that an accurate projection of what next year's

[Phil Kim (President)]: goal is going be?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: It is not. And that's in our second book. So if you look at the title, this is what a fiscal person always does. We look at the heading, and we look at what we call the perspective of the document we're looking for. This says at the top that it was for the twenty five-twenty six enacted budget. So this DART board was published in July year. They published a new one at the January governor's proposal, which is what we're using now for second interim. So yes, that has gone down. That projected COLA has gone down as of the January published governor's budget. Great catch. That was a small type to read. I will move quickly, so hopefully it keeps your attention. Now this next page talks about planning factors. And this actually gets to something that the board has been asking for a while. This chart actually was really revealing to me personally. I don't know about the rest of the fiscal team. It illustrated something really interesting. I want to go down. There's many years here that are actual and then the next three years that we've projected but I want to go down what each one of these means. The COLA comes from past dart boards. This is what we got in COLA and in the projected it's what they are projecting for COLA. So you can see for example it's already we've changed this down to the currently known COLA for next year which is 2.41 not 3.04 enrollment so that actually shows you our enrollment from seabeds for that year the reason I specify seabeds we do multiple multiple enrollments throughout the year, so we should always be telling you when we're looking at it. We do CBEDS, something called P1, P2, and year end close. This is our CBEDS. Actual ADA, that's the average daily attendance according to that enrollment number. So it gives you the number of students that were funded for as the actual for that year. And notice that let's just look at this year. Currently, we're being funded because our attendance is at 44,790 we actually have enrolled 48,768 so a significant difference between the number of students enrolled versus the number of students actually attending each day which equates to that ADA percentage, the next line. And you can see that historically and this was my which I hadn't really realized we have a long standing roughly 91% to 92% attendance rate. Other districts of our size are between 9597%. That means urban districts, large districts in the state of California. That is actually impacting us more than our 500 average per year declining enrollment. Why is that? I don't know. But looking at this on a chart, I thought, this is a long standing issue. So that's just something interesting that popped up. And then you have a line that says funded ADA. So do they fund us at the percentage that were at that year? The answer is no. We receive our revenues based on a three year average of our ADA. And the reason the state does that is they don't want us to experience big dips up or down in our funding, so they smooth the jaggedness of that curve by giving us funding based on a three year average. The other interesting number, this is what our additional supplemental funding is. You'll see that unduplicated pupil percentage, that UPP or those focal students, what is the three year average percentage of those students? And you can see that for this year, we're very slightly above 60%. That concentration funding we lose if we ever fall below what percentage, please, Niru? 55. 55. So we are still above. But that is the category that we are most rapidly declining in. Interesting demographic change for the district. I'm just going to pause there for a second. That's a lot to understand the difference, for example, like ADA versus funded ADA, which is an average of three years. So that's why we produced this chart. I think it's helpful. We have a chart that talks about enrollment and ADA trends. This chart illustrates that really when we lost the largest portion of our enrollment was post COVID. We still haven't ever recovered that enrollment. Most schools in California have not. But this also shows that we are declining moderately every year. And still most interesting to me that we continue to struggle with attendance more so than we do, actually, enrollment loss, which is surprising for a declining enrollment school district. So I'm going to move on to a topic which fascinates one and all, which is the school staffing model. And so what we have here this is actually the staffing model on the right. And it's an example of a school. So all a staffing model is and this is a model used for every school district in the state is it creates a process that we can look at that year's allocations and we can determine the following year's allocations with projected enrollment and that we can make sure that classrooms are staffed according to the collective bargaining agreement and legal requirements. That's a little bit of a misnomer. Your CBA, when the board approves it and votes on it, actually is a local legal requirement. So we have to cross reference the state legal requirements with the legal requirements as approved by the board in the collective bargaining agreement. So a staffing model makes sure that we hit those minimums and we never fall afoul of a legal discrepancy in providing education. That is actually what a staffing model is. And we have to align those FTE with those legal documents and the projected enrollment for every school to make sure that indeed we have enough staff according to law and according to the local contracts at every school site. We always look for opportunities to maximize the efficient use of our restricted funds. Remember, restricted funds first because the unrestricted ones are the solvency of the school district. And schools receive a base allocation that's also frequently called a central allocation from LCFF funding according to their school level, meaning elementary, middle, high, or K through eight, and the size, meaning the enrollment number. Schools receive additional allocations based on size, again, meaning if they're particularly large school level, meaning that there are some services provided at some levels and not at others and programmatic needs from LCFF supplemental and concentration funding and restricted funding. The illustration on the right is just an example of the local staffing model. You can see it's fairly complex. It outlines everything that we're required to provide to every single school site. I will say it is the most complex one that I've ever worked with because all that local funding is tied to the provision of particular people at particular school sites. So it is a fairly complex staffing model. Moving on from that, we take that staffing model and we apply it to every school site. And why do we start with schools? Because it's the vast majority of our district. We don't start with central offices. And we look at their enrollment for the following year. We apply that model, and it comes up with we literally run it through a formula. There's a big spreadsheet that we use, and it comes up with the allocation, and we round up on every allocation. So if it ends up at 11.2, we clearly might have to go up to 12 or 11.5 depending upon the type of position because we don't do a ton of fractional positions here. And so it generates for each school site their allocation based on the enrollment of the number of students that they have for that following year now these are adjusted as enrollment continues to build all the way till we do what we call our initial run which is all of the enrollment and then how it's assigned to the schools as a district of choice. That initial run means that we actually do final assignments to school sites based on the program for parent choice. So we will adjust the initial staffing allocations that we provided in January to school sites based on how many students they actually got during the enrollment period. Everybody gets the PDF that's illustrated at the right saying exactly how many students they look to have the following year as well as how that equates to staff. This is before moving on to the next page principals then get their budget spreadsheet with all this all the staffing allocations here from central are at the top saying that this is what you're being funded at And then we ask them to look at their other staffing that's already at the site and to either decide to continue that position, discontinue that position, or to create a new position that they would like to use their funding for. So it's literally a straightforward spreadsheet for them. We put it in the financial system for them to reduce errors so that they don't have to learn how to use the financial system. And then we cross reference what we provide, what principals want locally through choice, and we look at what we call the deltas what they decide to give up, somebody that we need to place somewhere else, something that they decided that they want they didn't want the year before. So that's potentially a movement from another site or a new recruitment to make sure that we don't have any positions that people aren't aware of or people that aren't falling into a position. This year for central offices, we haven't completed the budget process. Instead, everybody got the joy of doing a fairly significant cut exercise. What does that mean? We provided each of the executive cabinet members with a spreadsheet detailing all of the budgeted resources to their departments and asked them to come up with scenarios at the 5%, 10%, 15%, and 20% reduction levels to give us flexibility in meeting the stated goal of reducing central office operations by the 14 that we had targeted for this year. And so we have not finished those final decisions, but that is still in process. And then central offices will receive their budgets next year. All of that information that I've just covered, all we do is add those spreadsheets up for the entire district and that is what equals the school district's budget which is what we present to you all in June as your adopted budget. So it really is just adding up everybody's requests and making sure that we don't miss anything in the details, adding things that are requested, subtracting things that are not needed, and presenting that to the board and the public. Going on to our last slides here, I just wanted folks to ask, how do we do our multi year projections? So we use the assumptions that were previously illustrated in in the dartboard. And currently, we now have a tool also commonly used throughout the state that fiscal staff has been trained on, and it comes from thick mat, and it's called projection pro. So instead of people trying to manage a projection on their own in a spreadsheet, this is an online resource that staff has been trained on. We actually brought the state in to train staff to make sure that they put in all the items from the budget and this then generates a very accurate projection of all resources for them and that's actually how we develop the multi year projection. So we actually run it through the state system. It will tell us errors prior to us publishing them so that we can give you a much more accurate projection moving forward. So I'm gonna take a breath there. It was rapid, I know, but I wanted to get through that. And a lot of that I know is fundamental to you, but some of the questions have been asked about that and paused for any questions from commissioners to staff.

[Supryia Ray (Commissioner)]: Okay. Sorry. I have to turn away in order to use this microphone. I just wanted to ask a couple of more specific questions. One is about the parcel tax. It's referenced on page six and its use for health care. And I'm wondering if you can explain for us what the parcel taxes have been used for, like what are they actually used to cover and whether the health care benefits that the district and the union agreed on in the tentative agreement will cut into any of those existing uses of the parcel tax and explain, if not, how the parcel tax is being used to fund that health care increase that's my first question thank you

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: great question so I'm going to deal with them a little bit separately FWEA used for all staff for various salary augmentations. It's governed by an MOU, which was drafted from the ballot language of the parcel tax and then agreed to between the various bargaining units of the district.

[Mr. Trujillo (Board Office/Zoom Host)]: Commissioner Ray, could you mute? Could you?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Sorry. As well as the district with staff representing the district. And that one is a bit more restrictive and used. It's the older of the two. And it mostly goes to salary augmentations for all employees. QTEA is more restrictive. And by that, I mean it has a more narrow focus. It's just for educators. Educators is a locally defined term. It is not a commonly accepted one, which includes everybody in UE and UA. And the reason I point that out is that is a different definition than used in most districts, which means certificated employees typically, but that also includes our paraeducators in this district. And that's used for salary augmentations, also governed by an MOU and a governing governing board. And QTEA also has set asides for the district to use as does FWEA, a small portion of it. And so what we agreed to in negotiations is these these parcel taxes increase in value that they bring in revenue to the district slightly every year, and that amount has to be committed. The committee hasn't always kept up with the commitments on particularly QTEA, and so there was enough money there in carry forward balances as well as uncommitted revenues to cover the health care proposal for UE for I think the first I'm gonna glance to my right and say a year and a half. It's okay. Yes? Okay. Good. I'm glad I got that right. And so, and then at that point, it will expire about six months after that point. And when it's re upped in '28, our request of the board and the city and our staff, UE and UA, who benefit specifically from QTEA, is that the amount per parcel increase and that it goes up for another twenty years to continue to cover that additional cost in providing health care benefits for all for our educators moving forward. And it's very specifically, as I said, based on language and MOU, not my preference. That's what that money is intended for.

[Supryia Ray (Commissioner)]: Okay, so if I'm understanding correctly, we won't be reducing anything we're already doing in terms of providing augmentation for educators or other employees. We're going to use increases or unspent funds to cover the

[Luis (Interpretation Services)]: health care.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Apologies. You're correct. I should have been more clear about that. Yes, it doesn't

[Supryia Ray (Commissioner)]: impact Just want repeat any the future.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yep, absolutely.

[Supryia Ray (Commissioner)]: Okay. I also just had a quick question about going to use something as an example, but it's a JUUL Altria settlement money that I saw on page 15. But this question doesn't only relate to JUUL Altria. It just maybe serves as a convenient reference point. I understand that that settlement money is limited and will run out. So for funds like that, using this or others you want as an example, what are they currently being used for? And what, if anything, do we have any ability to replace those funds or are those programs that would just have to be shut down or reduced in some way?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Great question. We have a huge mix of restricted funds here. And so Juul Altria and the settlement, great example. It was a settlement statewide. We received our portion. And instead of spending it centrally, which a lot of districts do, we actually gave it to school sites to use and spend, which we do actually most of our restricted funds. Once they spend those monies, they do go away. And then frequently, we get other monies on the restricted side. This can be grants. This can be donations. This is, for example, the Spark Foundation. They bring in restricted funds that we give to schools all the time. So the schools are given the money, asked to budget what they want from that money, and once that money is gone, it goes away. But other resources constantly show up on that restricted side. Restricted monies are usually time bound, and they're usually also bound by what we call fund requirements, which means that they have to buy certain types of things. So for example, the old toupee, those of you that have been doing this for a long time, which was the tobacco cessation program money, we were required to provide educational programs in the classroom to get students to stop using tobacco products. So that was another type of limited time money. So most of those restricted funds do come with guidelines of how they have to be spent, but we let our schools decide how to spend them. There also might be a central allocation to do district wide stuff in some of these cases, but each one of those is different. If you ever have a type of money that you want to see what was actually spent from that, send the request to us, and we can just simply run a report on how the money was spent. But there's so many of them doing it off the top of my head, I'm going to get it wrong.

[Supryia Ray (Commissioner)]: Thank you. I'll wait for others to ask before asking anything else.

[Lisa Weissman-Ward (Commissioner)]: Okay. I have two, I think, simplest questions. The first one may actually may or may not matter. But I'm wondering, the same slide six with the additional sources of local funds, understanding that these funds change in terms of the amounts, but do we have a sense and also understanding that it's not like you can spend all of them for anything. But do we have a sense of what the percentages are? Like what is the breakdown? If there's 28% local, do we have a sense of one is just an outsized proportion of that 28% of local funding that we have? For example and I ask because we've heard before from community, do more with your property. But if the reality is we're not getting that much anyways from the property, it would be good to know. And maybe that's not where as much effort goes if we need to spend effort elsewhere. But if it does seem like a viable and important place to do more because we can get more there or it is a significant amount, then I think that would be good to know. That's my first question.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: I'm going to take a stab and Jennifer Schuster throw something at me if I get it wrong. So this goes in somewhat of a descending order bullet point. So the least that we get is lease revenues. That's because, first of all, it's not a massive amount. I'm asking for another board study session in April to bring to your real property and ask for permission to monetize it more on behalf of the district. It's been left a little fallow for a number of years. So we hope to improve that in the future. However, the biggest portion that we get is PEEF, especially when we add it to the student success fund. So the source of those funds is the same. That's what we call this is really technical wonky excess ERAF, which the city takes the majority of, but a portion of it is really intended for public education. So they turn around and they grant it to us. And so it's a little bit more of an obfuscated pathway for us to get the money that in most districts just flows directly to the district, but that's the way it was set up in San Francisco. And those come with some restrictions. So for example, PEEF says you have to spend a certain portion of this on I will get the right Arts, music, sports, physical education, and Library. Library. Thank you. That's a little bit unusual that they set it up that way. And then the student success fund, they took a portion of that excess eREF and said, we're going to do it as grants for schools that we feel are the most needy. So it's a little bit more of a restriction locally that we have than other districts that receive that money because of the way it was set up here, But that's the largest portion. The parcel taxes are each significant, but they're stable. They don't increase as rapidly. But they are good for twenty years at a time. And the city's always been very generous at passing those.

[Lisa Weissman-Ward (Commissioner)]: My second question is relating to slide nine, the tools for determining revenue assumptions. And I know that there's long been concerns. I think those are minimizing given this amazing staff systems that we're putting into place. But concerns that we don't like, we're not great at being accurate in our numbers, in our planning. But now we have position control, and we have other things. So that's getting a lot better. I'm wondering, though, how close have we historically been? Like, when we're looking at you mentioned there's some assumptions. We don't know how many people are going to be in seats on any given day, or even how many students are exactly going enroll. And we have a sense based on seeing who applied for the schools in SFUSD. But of course, not everyone says yes. So how close have we historically been in using the assumptions based on what we have and then where we end up? Like, is there a like, where is that what's the difference? Is it a consistent narrow difference? Or are we all over the place in terms of being able to assess accurately, predict accurately? And I understand a prediction is a prediction, but

[Matt Alexander (Commissioner)]: It is.

[Lisa Weissman-Ward (Commissioner)]: Presumably based on some information that we trust.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. I've really dug into this more. The district was able to maintain a lot of accuracy, specifically up until COVID for some reason. A lot of things happened in the district. All of you actually were here. I lived here, but I wasn't involved with the school district at the time. So you were much more aware of all the ups and downs in the district. But something definitely happened during COVID and post COVID to the point where the knowledge of how to develop and monitor budgets was lost. It's clear from the paper trail. The budget to actual presentation I did for the board last year illustrated just how dramatically off budget systems tracking responsibility had gotten, which frankly should have been alarming to the board. Doesn't look good. But that's also what happens when you have so much turnover for various reasons that you probably all are more familiar with. But you lose that knowledge, and it can throw a district into disarray, especially when what you see as the operation staff financially is very small in a district. And Jennifer, you were probably the lay person here long enough, if you want to speak to any of that, as far as what happened and then versus now, perhaps.

[Jennifer Shuster (Interim Executive Director, Budget Office)]: Sure. Good evening. My name is Jennifer Shuster. So I will say pre COVID, a lot of the work around the revenue assumptions, budget to actuals was really held by one person in the budget office. And we've had a lot of turnover since then. And so unfortunately, a lot of that institutional knowledge was lost. And so we are now regaining it. When it comes to our expenditures, we did not follow a good practice. We would set up all of our budgets and we would just leave them there, even if there was significant under spending. And that would produce big variances at the end of the year. And so with our new leadership, we've been instituting much better budgeting practices so that we're monitoring our budgets throughout the year, making adjustments based on updated revenue assumptions, based on actual spending trends, based on our positions filled versus vacant. And so I think you're going to see a lot of changes based on these improved budgeting practices.

[Lisa Weissman-Ward (Commissioner)]: That's super useful, I'm thrilled to hear that and trust that that is true. Even just specific on that just enrollment, like how close are we when, for example, right now, last year presumably we had a projected enrollment number for 2526. How close did we get to that forty eight thousand seven hundred and sixty eight? Like, do we know that? Because right now, we're we're the projecting, like, we're 48,267 for next academic year. And I'm just wondering, like, do we are we confident based on looking at how close or how not close we've been with what we projected and what the actual numbers have been? And maybe that's not you all. Maybe that's

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: our You're enrollment right. It's enrollment. And by the way, enrollment does a great job. There's a couple of luminaries there, Joseph, the enrollment staff, and they also work with some great demographers. However and enrollment was one of my departments as well.

[Lisa Weissman-Ward (Commissioner)]: But

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: when you have so much change and people aren't understanding the impacts of the information they're putting into the system, we would get a number out of the enrollment. And then we would put a different number into the budget. And I'm going to have Niru speak to that and why people would do that when they were producing budgets.

[Niru Jayaraman (Chief Financial Officer)]: Hi. Good evening, commissioners. Sorry. All right. Okay. Thank you. So we did a deep dive as to what was projected last year. So last year's staffing model had a projected enrollment of 49,468 students. And when we looked at that, we looked at our historical enrollment trends, and it didn't really match anything that was consistent with prior years. So if you look at slide 10, you'll notice we haven't really had 49,000 students since twenty four-twenty five. So it seems that they were using an enrollment figure that was even higher than the actual enrollment at twenty four-twenty five to build the staffing model. So that was the first thing we found. The other issue is that we see that in the field there is a misunderstanding between the difference between capacity and enrollment. So the collective bargaining agreement requires us to norm teachers based on the actual enrollment, not the capacity. And there continues to be a misunderstanding as to how that process should be developed. Some people feel that it should be based on capacity. And we've explained, no, the capacity is just the capacity of the school. It's not who's actually there at the school site. So that is one thing that we have tried to fix with this current year staffing model is to make sure that the enrollment that we are using for the staffing model is as close to current year as possible with a minor adjustment just for aging. So we used a projection of 48,048 students for 'twenty six-'twenty seven. That is pretty much in line with what we're seeing also when we factor in minus 1% for enrollment in the current year. So you'll notice that there's a 48,267 students in slide 10. That is because there are students in this number that are not in this stock model. They include students that are non public schools, for example, or other students that are just kind of fall out to the purview of our TK-twelve, or students in our early ed centers that I think are picked up in CALPAS that are in early ed centers that wouldn't fall under our staffing model as well. Thank you so much.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So something to keep in mind, and I appreciate your kind and thoughtful response. So when you have an enrollment number that you're plugging into a budget, which is higher than what you know your enrollment is going to be, I will kindly call that optimistic budgeting. When you're told that you only have 48,000 students and you put into the budget calculator 49,000 for revenue, you're over projecting your revenue. Now, that doesn't assume intentionality. It could be that people have forgotten how to update that number or that they didn't know that they have to update it every year with the current projection. But to Niru's point, it was being overstated.

[Phil Kim (President)]: Well, so so what I'm trying to do in my head is then take all this information and overlay it on the experience that we've had since December. Mhmm. Right? And then ask ourselves, what does this mean about our work moving forward? And so so the the first interim budget that we received included an FSP that I think the way that it was framed to us was that this was an FSP of last resort. It was it was the worst possible scenario at the time. Is that because all of that was based on projections that we did not concretely know answers to at that time? It's a multi part question, but yes, that's my first question.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: No, the concept of an FSP and you have one again next Tuesday it's required by law so that you basically can solve for not just the current year deficit, but the current year plus two years of deficit. And there's an abstract thinking about the deficit. Well, it's just on paper. It never actually materializes because we never spend 100%. But when you start spending your money down, if you aren't balancing the budget, you don't have any dollars left to pay for, even if it's an extra $10 that you spend over budget. And so an FSP is supposed to account for balancing the budget over a three year period of time Correct. Those Which is the legal This is

[Phil Kim (President)]: what I'm just trying to so the three year period is this year plus two. The subsequent two years were based on these enrollment budget projections?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: No. For first interim, we had already taken care and made the projections accurate.

[Jaime Huling (Vice President)]: Okay.

[Phil Kim (President)]: So then January comes around, we get the governor's proposed budget. But sites also received their budget allocations that early for the first time in years. Those were all based on a projected enrollment for each site based on what?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So our enrollment office and our demographers and the statisticians there take all of the current students there, and we have years of data to tell us exactly what percentage at each school site migrate from third grade to fourth grade, from fourth grade to fifth grade, how many new enroll, how many get pushed to a site based on their choice and which position their choice is in their preference list. So that's a very sophisticated operation that does a very good job of projecting all the enrollment and where it's going to move the next year based on our enrollment process. The part that's a little trickier is that TK, because we find ourselves with which we all love TK, it's a fantastic idea, but it's tough because the demand does not always fall within the availability, and because it's your first year of school, it's harder to predict how many want to enroll versus how many spaces you have and how many are willing to go to another site if it's not their local site.

[Phil Kim (President)]: But I thought those site budgets were based on a 1% across the board cut.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: No. The projection was a 1% decline in enrollment across the board, which is what we're seeing of all current enrollment. So we did a 1% across the board in collaboration with enrollment saying, no, this site doesn't ever decline, or this site always goes up little bit they always reach their capacity because they're very highly sought after school etcetera.

[Phil Kim (President)]: Okay so those considerations for each site were factored into site allocations okay because then sites receive their budgets project based on this projected enrollment in January. Now let's they worked through, I think it was the January, to include the positions based on the staffing model plus add backs. Right? So that add back process were was an exceptions based process, where folks can add additional positions in based on restricted funding. Okay. Well, yeah. There are a couple

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: of things. So we did our base funding. We augmented it with restricted funds and positions. The best example that everybody will remember is social workers so that we could allocate them to every site, again, not just Title I sites. We found some we used Medicaid money to fund them for every site. And then principals the next step is actually principals then choose what they want to spend their local money on that they get. Mostly, they choose positions. And then on top of that, there's an appeals process that goes to the superintendent and ed services. And so in total, over locally selected by principals and central allocations, In addition to that, there were between one hundred and thirty and one hundred and thirty five additional positions granted based on appeals and specific assignments, which is significant considering that we only have 122 school sites.

[Phil Kim (President)]: Were appeals denied? A few were denied. Yep. Okay. Sorry. Bear with me here. I'm just trying to articulate the arc of what we're experiencing right

[Lisa Weissman-Ward (Commissioner)]: now.

[Phil Kim (President)]: So then the end of the most recent meeting comes around for PKS lists. And those PKS lists I think we articulated this at the board meeting. I mean, was less than 50 people or positions. 42. Right? And if I recall, it's mostly driven by changes in the projection of our enrollment, not necessarily the TA. Yeah,

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: this was done far before the TA, So the TA will show up in the other packet that we have tonight, right? How are we going to pay for it? But this had nothing to do with the TA at the time. So this is an enrollment driven and finance driven, right? So for example, if I'm a principal that had three fifty students this year and I only have 300 next year, then I'm going have less discretionary money to spend.

[Phil Kim (President)]: Now let's fast forward to May. We get the May budget revise. When we factor in retirements, attrition, turnover of staff, all that stuff, it could be that come May, we actually don't need to lay anyone off, potentially.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. So because of the statutory deadline of March 15 in the state and then all the stuff that happens between March 15 and May 15 when you have to provide final notice, there's all sorts of things that happen that you might not have to execute. Now here's the other thing, and this has happened to the board here as well. After May 15, there's still other stuff. Right? People still decide to move with a partner somewhere else or to they don't want to be in in this job anymore or they want to work somewhere else or they take another position within our district, and then we have more positions. So that process continues until the first day of school. And remember that if you are a person whose job is actually eliminated and you're still in it, which is called a layoff, that that thirty nine month rehire continues for another three years to call you back into a position as they open up.

[Phil Kim (President)]: Okay, great. Then we don't actually know our final enrollment obviously until school begins, correct? Just trying to fully close this loop. Yes and

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: it changes throughout the year which is in our next presentation because it has changed significantly during in year this year. So we are always chasing enrollment. However, because we do ours so far ahead of time, we are getting placement runs next week. So we actually do a better job further ahead of time than most districts. Thank

[Phil Kim (President)]: you. Yeah. Because I I think and I appreciate you just walking me through that in part because I think the numbers keep changing, right? We need to understand more clearly why the number what's driving the changes over this arc and that will help us better understand, okay, so at what points do we need to look for certain things so that we have a clearer understanding of how we are getting to a smaller swing at the end of the year, more clearly defined implementation of the staffing model, all of that stuff that tells us the actuals. Right? And so because I I do think I will say just be because we are simultaneously reconciling one budget while projecting another is very confusing for many people. Right? And so trying to understand the difference between that. Right? Then you layer on an FSP that is actually future focused with, honestly, a TA that's also future focused. Right? With a budget development process that's taking place right now for actuals, it gets even more confusing. Right? So so I I just I I think that's I'm trying to organize all of this in my head. I'm sure, like, for for members of the public too. It's just I think we we owe it to ourselves as commissioners to understand how all of these are playing a role with each other, and then how are we communicating that with the public. Because I think if we are taking all this time to dig into it ourselves, there's going to need to be some work to ensure that we're communicating this in a way that makes sense for others. So thank you. I appreciate you taking me on the journey.

[Jaime Huling (Vice President)]: I have a couple of questions to follow-up on the revenue projections point, but I also just want to say I'm really excited for the study session about real property. And thank you for preparing that because we know real property here is more expensive than nearly anywhere else in the world. And so it hopefully is an asset that we can put to work for our students through and for

[Phil Kim (President)]: our

[Jaime Huling (Vice President)]: workforce through workforce housing or other things. And I had a quick question for general counsel just to follow-up on the earlier conversation Commissioner Ray raised about the Altria settlement. Those settlement funds came from like a long standing litigation that eventually settled about the marketing of vaping vapes by Juul to students. And from time to time, governments and school districts join cases like that. Are there any cases that we're currently a party in that may in the future yield additional settlement funds as plaintiffs?

[Matt Alexander (Commissioner)]: As of now, nothing comes to mind, but I would need to get back to you to figure out if something if we jumped in perhaps in the last few years and it's just been quiet because there's been nothing, no substantial movement. But off the top of my head, we've been approached, and we get a variety of invitations. But we think about what makes sense in terms of the trade offs of staff time and whatnot. So nothing that comes to mind.

[Jaime Huling (Vice President)]: Yeah. I know there are other school districts that are involved in affirmative litigation about social media being addictive to students and harms So to I'd be curious to hear if that ends up coming to the board in the future if we're not already plaintiffs. And then my question's about revenue projection. So you said that past errors in revenue projection actually over projected revenue based on carrying over past enrollment that was higher from past years that was higher. How does that square with concerns that the district may have under projected revenue in the past, and then more money has come in in actuals than was projected. Has that happened on occasion as well?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yes. Mostly when people aren't maintaining their revenue calculators. So there are I've only gotten to look back at maybe the last four or five years at this point. Last time I talked to you, I think it was three. I guess this is what I do in my spare time for funsies. There are times that whoever was projecting revenues would actually neglect to project any revenues in a fund source for a year. And then they would catch it at first interim or second interim. So it would be a zero at adoption, and then they would catch it. But there was the biggest discrepancy I've found so far going back was maybe I'd have to look at it again, but I think $24,000,000 is the highest one I've seen in a single year. Now, that's probably as far back as I'm going go. I'm not going because it's all paper based, which is frankly burdensome. But I have looked back four or five years at this point.

[Jaime Huling (Vice President)]: Yeah. If you do have the actual differences between projected and actual revenue for the last five years, if you could you or it's four years or whatever. The most recent years that you did actually look at, it would be really helpful, I think, if you could share them for each year

[Niru Jayaraman (Chief Financial Officer)]: with the board and Sure.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. It's just in a spreadsheet, if that's Okay with everybody. But it's a pretty basic one.

[Jaime Huling (Vice President)]: And there's also been all sorts of, I think, political speculation about what the governor's new budget revise will look like this year. And folks, you know, stating that there may be additional monies in the May budget revise. Do we have any reason to believe that that will be true either because the COLA will be adjusted up or Prop 98 withholdings will be provided or any other sources of funding are forthcoming through the state?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: I mean, I enjoy reading astrology and all the other stuff in the newspaper. But I'm not in the magic eight ball business for work. You pay me to do your finances. And so until it's in writing and I know it's coming, I don't provide it to you. So have there been conversations at the state level to fulfill the deferrals that we received in the past years? Yes. Has the governor moved on those yet? No. What would our portion of that be? If it's of the $1,900,000,000 deferral, our portion of that would be roughly $24,000,000 But it would just be moving the deferral from July to June. In other words, we'd receive the money one month earlier, but it's not more money. So a deferral is just them not giving us our full apportionment for a month and holding some back to cover their own bills until they have the money. Sometimes they hold that for twelve months. They've been known to hold it for eighteen months or two years. They've even been known to take money back they've already given us. Up to three years back, the state government's the only organization that has a time machine. They can go back three years and take your money back. Right?

[Phil Kim (President)]: Did you say 24,000,000?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. Yeah. If the 1,900,000,000.0 that was deferred in this past budget cycle is given to us, it equates to about $24,000,000 for us. Right. But there's a deferral in the January budget for this next year as well that's even larger. So how all of those things play out, I always tell staff, don't engage in the prediction game because none of us ever know until we get the budget. And it's never what anybody guesses.

[Jaime Huling (Vice President)]: So if that 24,000,000 came in in June instead of July, that would be essentially money that was originally budgeted by the state or intended for the 2526 school year, but the 2526 school year is over, and so we can't go back with our time machine and spend it this year. And so would the functional effect of that be to have it be essentially rollover one time unspent funds as opposed to greater new unrestricted funds in the 'twenty six, 'twenty seven school year and fiscal year?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yes. And let me make it more complicated to you. They could restore that deferral but not make it actionable until December, which means they're giving us money due in June and January. Like I said, they have a time machine, so it's just them setting the paper record. It doesn't actually say when we get the cash. Right? So if they have the policy effective using the same example that the deferral ends, and we're going to make you whole in June, but we're not implementing the policy until December, you still don't have the money for six months. So it really depends upon what the budget says.

[Jaime Huling (Vice President)]: Yeah. So if in the scenario you just laid out where it was promised in June restored on paper in June but paid in December, then functionally they can say that they gave us the full amount for the 'twenty five-'twenty six school year. But we actually don't have any dollars on our books and capacity to spend them until the 2728 school year.

[Phil Kim (President)]: And

[Jaime Huling (Vice President)]: then they would essentially be considered one time funds because they're rollover unspent funds.

[Phil Kim (President)]: Correct.

[Jaime Huling (Vice President)]: Okay.

[Phil Kim (President)]: Yeah, you got it. It's Yeah, complex

[Lisa Weissman-Ward (Commissioner)]: just

[Jaime Huling (Vice President)]: that's very frustrating. I feel like our I just want to make sure I'm able to accurately represent this to our state partners as they consider their decision making and its effect on local education.

[Niru Jayaraman (Chief Financial Officer)]: So Commissioner, the legislative analyst office actually put out a very helpful primer on this. And they said the same exact thing. We won't know till 'twenty seven, 'twenty eight. We cannot assume those revenues for the coming 'twenty six, 'twenty seven school year because the budget does not state which year that information that money will be available. So thank you.

[Jaime Huling (Vice President)]: And sorry, just to follow this thread, one more question and then I'll see. But if the governor's May budget revise continues to borrow from Prop 98 funds and essentially loan the state money to balance its budget from money allocated by the voters for local public education, what would be the amount that's being withheld from our budget for twenty six, 'twenty seven? Like, because what, it's 5,900,000,000 that they're if the January let's just say if the not reading the tea leaves, but if the January proposed budget holds, which had, I believe, a 5 plus billion withholding from property. What is our share of that that we would basically not be getting for next year?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: I'm not going to answer that off the top of my head because I'm not going get it right. But they're also proposing something different. I don't know if you've noticed an article called an advanced apportionment proposal. Here's here's one that'll blow your mind. We are now gonna give you an extra month of your apportionment because it because schools are a great bank. And then when we get in financial trouble, we're going to skip a month and we're going to say we already paid you, which means schools, you need to keep a full month of apportionment in your fund balance or in a reserve because when we get in trouble, we are not going to give you money for a month. So that's an advanced apportionment proposal that's already also currently being put out there that they're gonna give us an extra month. And then at a time that they don't tell us, they're not gonna give us a month, which means that we need to develop a good savings policy.

[Jaime Huling (Vice President)]: Would that legally require us to increase our cash reserves from the minimum state required 2%? Or would that just basically put us, I'm trying to say this without swearing, in a lot of trouble in the future if we just didn't happen to already have larger reserves on hand.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So you can't spend the 2%. So that doesn't matter. It's not material. I can't imagine them going through with that scheme without laws that require a local reserve because schools are very good at spending money but not always saving them. And if they didn't require you to save a portion, you could find yourself into bankruptcy literally within a sixty day period. Right? Receivership. But I that's we're now in the realm of speculation, which is what I'm trying to sort of avoid because I I don't have a magic eight ball. I don't know what they're gonna do.

[Matt Alexander (Commissioner)]: I really appreciate Vice President Huling's questions and the other ones about the revenue assumptions since this is something I've been harping on about for a while. I really appreciate the discussion. And I just want to say, I think I this understand it feels speculative, but I think it's really, really important because I think I mean, I know members of the public have been asking me this question. For example, if we think about that deferral, if we get a $24,000,000 all of a sudden next year that we didn't budget for 2627, people are going say, well, wait. Now all of a sudden, you have all this money. You didn't budget. Why didn't you budget it? Why were we talking about layoffs? So that's where I think it's really important for us to say, look, we know that money is there. We can't budget for it for x, y, and z reasons because the state has made the decision. Right? So I think that's why it's also helpful that I would second this request of going back a year or two. I mean, doesn't you know, I understand. There was the COVID money times when there was we had 200,000,000 extra dollars. But for the last three years, it's been more in the neighborhood of 80,000,000 where and even this even '25, '26, I looked back, the revenue for the budget we approved, the rev revenue projection, sorry, the revenue projection last December was $1,215,000 at the first interim. Then, this December in first interim with better projections, we're saying we're now projecting $1,292,000 Again, it's about it's $77,000,000 more. So it sounds like you all are doing a more accurate projection now than we were in the past, as you've said. But I think to be able to say, what is that $77,000,000 would be really helpful just so that we could say, here's what we discovered we weren't looking at. Now here's what we are looking at. If if some of it is new money from the state to say, look, we couldn't budget this for x, and z reasons, now we know it's coming in. I just think that's the level of transparency that would be really helpful so that we don't get in this situation where all of a sudden we have $80,000,000 more and we don't know why. Because I think that's what creates the trust gap, if that makes sense.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah, I can provide you the past, but I can't speak to the why in the past. What you should be looking for as the board is when we do the interim projections, we should always be showing you for the unrestricted and the restricted general fund any changes in revenues as well as expenses that add up, which is what we've been doing. And you should be able to see exactly what expenses are going up and down, and we should call them out, and any increases or decreases in revenues and why. So any first or second interim report should include those. And if they don't, that should be a red flag for you to say, wait, wait, wait, wait, wait. It changed, but you're not telling us why. We should always tell you why, because they do go up and down.

[Matt Alexander (Commissioner)]: That's really helpful. I also wanted to follow-up on the enrollment question. So when I looked at that slide on what is it? Slide 10. Yeah, it looks to me and tell me if this is a bad interpretation that our enrollment went down before pre 2022. There was that COVID drop. And then 2022, 2023, 2023, 2024, 2024, '25 was pretty stable for about three years. And then this year, we lost some students, maybe 500. Is that about right, roughly? So why do we think that that's not a blip? Like why do we think that it was stable for three years, we lose 500? Why do we it looks like we're projecting that it keeps going down. So I'm curious what our thinking is there.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: And this is where we shouldn't be relying on my brain or our brains. This is what a demographer is for, And so there's not only a blip I don't know if anybody noticed it. It actually went up briefly between fiscal year 'twenty three and fiscal year 'twenty four, then it dropped down again. So we actually don't do enrollment projections in the budget office. It's done by the enrollment center. They do the enrollment at school sites very well, but then they contract out with a professional demographer to actually do the enrollment projections, which is what we use in the budget.

[Matt Alexander (Commissioner)]: So I think that would be really helpful just again so that we know that to Commissioner Weissman-Ward's earlier question, were we getting it right maybe is a good question. And to what extent are we confident that this is the right projection? And again, understanding we may want to mitigate risk by making more conservative projections. But at least knowing what we're dealing with would be really helpful because it makes a big difference. Again, FS go back to the FSP question. The FSP is based on a revenue assumption. The lower we assume our revenues to be, the more we have to cut. So I just want to make sure that we're being clear and transparent. And then I guess my last question was oh, around the back we haven't talked about this as much, but the school staffing model. A question I've been getting and which I have not been able to answer is that we have, as you know focal groups in LCFF low income students, English learners, foster youth. It seems like it's not totally clear to a lot of people within SFUSD how the new school staffing model really provides more resources for those students other than the sort of small discretionary amounts. But in terms of like additional staffing, where does that show up in the staffing model?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So it doesn't. You're right. It's in the discretionary funding from what we do centrally. And then I would point the board to the 135 additional staff granted through appeals and through advocacy done through ed services with the superintendent. So we just do the formula and the allocations. And then the discretionary part is really fiscal folks don't like to get into discretion as much. That's just the way we think.

[Matt Alexander (Commissioner)]: No. And actually, that's been a concern of mine because and I shared this with the superintendent, I don't believe that an appeals process is strategy. I mean, I'm glad we have it because I think it's really important if there were mistakes. But to suggest that our equity funding formula is an appeals process is not acceptable, I don't think. And SFUSD has had a long history of actually building in factors to our funding formula to schools so that more marginalized students who require more resources to achieve student outcomes got them. We as educators know that that's a smart strategy. I guess I'm wondering, you and again, I don't want to put anyone on the spot. But was there an intentional decision made to not have equity weights of some sort in the staffing model? Or has that just does that make sense? Because there used to be very explicit. We had a multi tiered system of supports. We had all these different funding strategies that drove more resources toward focal students.

[Lisa Weissman-Ward (Commissioner)]: Yeah.

[Matt Alexander (Commissioner)]: I mean, were different methodologies. But it seems like those are mostly gone. Yeah. So I'm just curious.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So yeah. And I and I don't know what what you've always had. We Yeah. We took the base, and we did take and we we blended the allocation for because the district, meaning San Francisco, recognizes not just UPP, which is what the state recognizes, but others. The other interesting thing, though and I pointed this out to the board earlier is that things that we tried to do to provide more supports to schools in our district with higher populations of more at risk or what in other districts we call students that traditionally have more barriers to success in public education is that we provide them through restricted programs. The problem here is what I call everybody needs it creep. Right? And so our title programs are a great example. They are supposed to provide those things that other schools don't get. But as soon as our title programs have provided something in the district, the demand has been every school needs it. So are you really differentiating or are you just giving everybody the same after a while? And so where we find ourselves now is everybody gets everything. So I'll point out the social worker discussion. That was a Title I function that they lost and weren't able to effectively spend their money anymore because they were running afoul of supplementing versus supplanting, which left them in a position of not effectively being able to support the low income students that they were supposed to support. So we said, let's make that a Title I function again, and how do we safeguard it so that they don't lose that function, which we did. And we did find something that does not trip the supplement or supplant, which is Medicare and Medicaid funding revenues that we get back. Will that last forever at the level we're spending them? No. But it was a solution for the coming year. So those are pressures that we see here. And you can historically look at the staffing disbursement, and you can see what starts at one school for students that need more support very quickly spreads to all schools needed. It's a very sort of clear story here.

[Matt Alexander (Commissioner)]: Yeah. And that makes sense for I'm sure there's lots of political and other reasons for that. I guess my concern is that then we're not providing those additional supports and we don't have a targeted strategy. Don't know. Maybe this is more of a question for the superintendent. But I going to just I'm going have real trouble supporting a budget that doesn't very explicitly have a strategy around improving student outcomes for all students, which is going to require more a kid who's a homeless student who hasn't had opportunities to learn to read is going to need more help coming into as an early literacy learner than one who's had their stable housing environment, for example. And so if we don't have a strategy that addresses that, it feels to me like we're not going to meet our academic goals.

[Phil Kim (President)]: And Commissioner Alexander, maybe I can I just want to because I think this is a really important question of how we operationalize the values of our district and our city, quite frankly? And I don't know I don't think you were saying this, but deferring to federal funds as a way to identify focal populations and serving them, which I don't think you were suggesting. Yeah. But I guess the question would be how exactly through our staffing model are we what would you point to as the examples in our staffing model that do support our students and our focal populations. Is in the way that we yeah. Go for it. So we do Lisa's head was in the way, so I can't

[Niru Jayaraman (Chief Financial Officer)]: We do, in fact, incorporate who need in the staffing model. So teachers is one example where we just use a straight number based on the CBA. But we do allocations for assistant principals, counselors, A to G teachers, supplemental teachers. So there were 89 additional supplemental teachers over and above the CBA where the UPP was considered. T10s, student need was incorporated there. And also dedicated course subs, we looked at student need for that as well. So there were actually several examples in which we used not even restricted funds, but unrestricted general fund money to support students with higher need.

[Matt Alexander (Commissioner)]: Is there a formula where we can see that? I think that was what I was trying to get at was, does it say if your school has x number of UPP students or x percentage, you get an AP? That's in there? That would be really, really helpful to Yeah.

[Niru Jayaraman (Chief Financial Officer)]: They would prefer

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: it to be small to see everything.

[Matt Alexander (Commissioner)]: Yeah, yeah, yeah. But I'm saying if we could pull out no, no, I understand that it's if we could pull out the ones that actually are doing that, I think it would be really helpful. Because for me, just so that I because that has been one of the criteria I've been mentioning to the superintendent. I haven't been able to see it.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Could we please provide a legible version of the formula as well as so, for example, we also provide the focal schools and the schools what's the name the phrase we use here for the schools that we provide additional No. No. The actual allocation of, like, for the schools here that we're saying are tier whatever that we provide full time subs at high potential schools. Yeah, all that still exists. That's in addition to. Yeah. And board, I'm just going to do a quick time check. So we've done some basic budget items, and there's still some items here that are going to be engaging to you.

[Phil Kim (President)]: Can we actually have Alida go really quickly, and then we'll do Just

[Jaime Huling (Vice President)]: as a follow-up, if there are additional things that aren't just supplemental to the staffing model, like pay incentives to go to high potential schools or student success fund grants or things like that, like other items that we also support our equity goals, that would also just be really helpful to see everything in one place, not just limited to this staffing model. Because I know there's all sorts of supplemental

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So that would some be things like that. So that would be staff could make sure that we share, for example, all the student support grants and what people are purchasing with them and all that kind of stuff.

[Jennifer Shuster (Interim Executive Director, Budget Office)]: So this year, the staffing model information that the schools received in their budget templates included both the base allocations, supplemental concentration allocations, and also all restricted grant information that we had available at the time. That way schools could see the full scope of their budget for next year and make well informed decisions. So we could absolutely do a walk through of the school staffing model that includes all the different funding sources, their methodology, and what the school allocations were.

[Jaime Huling (Vice President)]: If I understand Commissioner Alexander's question, and at least my question is, could we as the board have shared publicly just a list of, if you're at a school with greater need with greater focal populations, a summary one pager of this is what SFUSD does extra for your school to address equity concerns, whether that is you get extra staff or your teachers get paid extra to be incentivized to go to those schools or you get extra grants for field trips. Like, there's so many things, I think, that the district does that it would just be helpful to see in one place.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. So they're saying yes, they need to

[Phil Kim (President)]: Which is different, I would say, than articulating a district strategy. Like, where the money comes from and how it gets allocated is one thing. I I am still curious, like, the yeah. What exactly is our strategy?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So but and and I I don't disagree with you at all. Yeah. What we put together was all these different pieces that the district has always done in trying to make sure that there's a systemized systematized approach. However, with a strategy, particularly with the the place that we're in right now, that also needs to come with a list of things that we want to not do anymore so that we can fund those Yeah.

[Jaime Huling (Vice President)]: Yeah. And I think even just seeing in one place what it is that we do and how much that costs, like on maybe a per school or per pupil basis that we do extra, that will, I think, help the board understand whether we want to say, these things are great, but they're not aligned with our strategy. Can we ask to redirect these resources into a more effective strategy? Yeah, but we can't ask about how what we're doing aligns with strategy until we know what we're actually doing. Yeah.

[Alida Fisher (Commissioner)]: That's fine. It's a robust conversation. It's well I appreciate it. It's worth the wait. I appreciated those follow-up questions. I appreciated the in particular of the fact our attendance, our actual attendance, is so much lower than the state average. To me, seeing that was and the impact. I think that's the other part. Lot of this understanding the impact is really key. One of my questions really is, you mentioned as an example, social workers that aren't funded through Title I are now funded through Medi Cal, right, which makes perfect sense. And historically, we have not done a very good job of collecting all the Medi Cal dollars that we could because of our poor internal practices, right? But I think that's one of many areas where we've left, to mix metaphors, some low hanging fruit. And so I'm wondering, are there other as far as maximizing revenues, are there practices and I appreciate, for example, the we're using calculators and spreadsheets and aligning the best practices at the state level. Is there anything that we're I'm getting there. I'm getting there.

[Lisa Weissman-Ward (Commissioner)]: But

[Alida Fisher (Commissioner)]: are we doing anything from in other areas to make sure that we're actually maximizing revenues? I used the Medi Cal example, but I know there are often state grants that we don't apply for. You know, we almost walked past our early literacy block grants a couple of years ago. How are we tracking all of these potential revenues and other sources and making sure we're actually going after them? And do you have any advice or strategy that we should be doing that we're not?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So you have a few. So Medi Cal is one we're on. It's now been incorporated into my accounting department. And folks have been cross trained on it. So that's something we won't miss. We also have Spark, which brings in a lot of restricted resources. But here's an interesting thing. We were just meeting today with Spark because one of my frustrations, one of Spark's frustrations, is we bring in the money and then people don't spend it. And they don't spend it on time. So we find ourselves in a scramble to charge off that money to satisfy the funder in a timely way rather than emphasizing that's the money we should be spending first to maximize those resources. Because folks that spend in an appropriate manner, in a timely manner for what the funder wants tend to get more money. That's the way that that works. And anything that's a state opportunity, our fiscal department won't pass up. Now some of those are on the ed side, but we just notify them and they're pretty good at applying for them here. Any others from staff? I do want to move on here.

[Niru Jayaraman (Chief Financial Officer)]: So one strategy we used in LA is that child development fund has a set aside specifically for early education students with disabilities. We are not fully taking advantage of that. And so I'm not sure if commissioners are aware child development fund is done on a reimbursement basis. So the more that we can charge to child development fund, it's actually a win win for everybody. They don't lose anything. They don't lose anything from their budget and we actually get more money from the state. So that's another project that we have on our queue because we don't believe that the Child Development Fund is fully maximizing its reimbursement, and there's an opportunity there. And also with if I can speak a little bit more forward. So one of the risks of doing that maximization is that it does hurt our MOE. But because we have this UE agreement on the table, we can actually balance out the increase in cost to the MOE by utilizing the child development fund. So it would be a wash if our MOE stays the same. And there's a wait. So there is a whole strategy there that we've used in Los Angeles that we are looking forward to possibly implementing here.

[Alida Fisher (Commissioner)]: And just to take a step back, maintenance of effort, we can't what we spend on special education this year is the expectation of what we will continue to spend year over year unless we have a really good explanation. So that's did I get that right? Okay. So that's where you're concerned that if we increase special education funding, you know, through this revenue source, then we've got to be careful year over year. Was super helpful, though. Thank you.

[Phil Kim (President)]: Really quickly, did you you mentioned you had something else to

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yeah. We still have actually the bulk of the presentation. We need to move really So so the first the the first deck well, no. I I was asked that we be mindful of time because we are we did have a time certain, so we have a lot to get through. So actually, what we went through was just the primer for the public. We still have a draft second interim with some direction needed from the board.

[Phil Kim (President)]: I know several have questions, including myself. Is everyone okay if we move on to the second presentation?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Marin, I'm gonna ask that you keep up with me because I'm gonna skip around now. So we're gonna go to straight to page nine. A lot of this is standard information that hopefully you're used to seeing from me by now just explaining yep. The one that's marked draft on the front. This will be posted after any modifications we make tonight. So I want to look at page nine just to illustrate a point about enrollment changing in year. So this was just interesting when we were looking at it because we do track this throughout the year that we have lost roughly 68 students in the district this year and from county, 76. County is more understandable because they have some continuation programs and do graduations throughout the year, so that's a decent explanation for that. But the thing that's interesting to me that stuck out, the reason that we put this chart in here, because it is our revenues. Notice that we are down 2% in our unduplicated pupil percentage within the year, which illustrates that it is really our fastest declining group. It is also the group that we get the most revenue for in the district. So just something to point out. I am then going to skip rapidly to page 11. You are going to see next Tuesday some big swings in the budget. A lot of those swings are the result of work that's been ongoing in the budget office as we continue to unveil the efficiencies that we can make in the budget as well as the TA. So page 11 just illustrates for the board that we have gotten the restricted side of the general fund for this year. The projected deficit is now down to $44,000,000 If you'll remember way back when, it started out at 55,000,000 So we've managed to improve that. We do that by taking savings throughout the year. The majority of the savings that you're seeing here is that salary and benefits from positions that are vacant throughout the restricted side, we take those savings throughout the year. That yields savings, and it increases fund balance throughout the year, which is very, very important to keeping the district stable. The next page is the three year view. And actually, what you're going to see is a four year view of the restricted intentionally with the staff that's joining us tonight and their staff. So we have the current year, which you'll see at second interim. So our restricted side is now, again, down to a $44,000,000 deficit. And you can see that it's growing dramatically on the restricted side every year. This is quite intentional. So we have completed our work in moving expenses that are eligible and appropriate to be budgeted on the restricted side to the restricted side rather than leaving them on the unrestricted side. So we've done a large shift of expenses from unrestricted to restricted. State and local revenues are increasing a little bit. You can see some efficiencies that we make. But expenditure growth is largely reflective of the settlements that we've come to or the tentative settlements we've come to with the majority now of our bargaining units. However, you can see that in the fourth year, and the reason that we put '28, '29 there is at adopted budget, that will be your new third year. Right? So that is the current projection. Do we hope to tighten that up by the the budget adoption? Yes. But at this point, that's what it is. So notice that there was enough of a fund balance in the restricted side that if everybody spends all of their budget, that we will be out of fund balance in the restricted side. At adopted budget, it will be the second year. So that's something important to pay attention to. A rule of thumb on the restricted side of the budget, anything that is budgeted and paid, spent on the restricted side, if we don't have enough money there, that money and those expenditures go to the unrestricted side, which is why you never want to have your restricted side run out of fund balance. K? So I'm just going to shift very quickly to the unrestricted side. And this is where you're going to say, woah, you guys really move things around in the budget. Yes, we are done moving things around in the budget. But you can see that even with the significant cost of our TAs, the unrestricted general fund, we've been able in the current year to continue to also reduce the deficit by taking savings in year. This means that we are actively managing the budget and making sure it's as accurate at any point in time that we can make it. So the projected deficit has gone down. What I want the board to pay attention to on slide 13 is the components after F. So your ending fund balance projection is currently at 60,200,000. And then you have the two portions that really can't be spent, that stores inventory and that 2% reserve for economic uncertainty. Notice that we've started putting in what we're calling open agreement assumption. What the heck does that mean, Chris? What are you doing? Right? We are putting in an assumption. The board has discussed this before. And we have a budget function called an assignment. And this is an assignment for the board to anticipate that the agreements that we still have open with bargaining agreements, this is our conservative estimate of how much we plan on spending this year once we close those agreements. Because we're late enough in the year that I need to give you an idea. So that is our best I told you we don't like doing magic eight ball, but it has a lot of assumptions in there. There is a mathematical formula. That's our assumption for those agreements that are still open. You can see that the local reserve fund 17 is still at the 8% from when the board created it and leaving at the end of this year a projected $23,600,000 in unassigned, unappropriated fund balance on the unrestricted side. Now, of course, we hope to outperform line E. We know everybody doesn't spend all of their money. And so hopefully, we'll get a little bit more added to fund balance when we do fiscal close in September. So from there, I want to bring you to the big slide, the multi year projection. And this is building to a little bit of a crescendo, because I need some more direction. So slide 14 laid out the same way as just the single year projection. I now have the current year plus two, which brings us out to 2728. But I put 2829 in here because what it shows you is your third year when we go to adoption. So what I want to point out is that the shortfall, even with the TAs, we have now gotten to be mostly on the restricted side. We have maximized all of your funding, and this is still a significant structural deficit. We've actually increased it in the out years at some point. However, ending fund balance, you'll see it going up. Why does an ending fund balance go up? Because it shows you drawing out of your local reserve to pay that bill. Right? So let's go through the components of that ending fund balance. Stores and the reserve, the 2% statutory reserve are non spendable, but they're required by law that we have them there. Open agreement assumption. This is the same as the prior page, but I'm showing it over multiple years. Now I'm gonna give you a caveat here because this is really, really strange, so you need to be aware of it. When we do an assignment in the budgetary system, which is a budgetary tool that we can use, until the assignment is resolved, it compounds on itself so the 27,800,000.0 in year two includes the 7,100,000.0 from year one so until we resolve the assignment it continues to accumulate there and it starts to double count so that number is larger than it would be as we pay it year by year, but until it resolves, that's the way that the that the state accounts for it. So that so that 57,000,057,600,000.0 in year three includes the 27.8 and the 7.1 from the first two right because it continues to accrue until I resolve that assignment in the system does that make sense to everybody

[Alida Fisher (Commissioner)]: so when we resolve it so for example, if we resolve the 7,100,000 this year, then next year's number will change to 20 Correct. Okay.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: But it'll also resolve all the way across because then we'll know the actual final factors. And so that assignment will go away and it'll just become an expenditure. And so what you'll see on line e, your shortfall for the district will increase by whatever once we close those agreements, whatever the amount is will then go up to the expenses, which will increase our deficit across the board. But I wanted to put something in here as a placeholder because, as the board has asked me before, it's really tough for us to keep in mind that there's a big unresolved expense that we're still looking at for the year. The assignment is the only function I have to address that. It's not an elegant one, but it keeps it on our mind. But I just wanted to explain how that works. Yep.

[Jaime Huling (Vice President)]: So does that mean that our local reserve fund 17 balance, once these assignments, assuming that the open agreement assumption assignments are actually assigned

[Lisa Weissman-Ward (Commissioner)]: Mhmm.

[Jaime Huling (Vice President)]: Does that mean that that local reserve balance number will go up or that we will actually have less money?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: That's the hope. Yep. Yep. Okay.

[Phil Kim (President)]: Yep. So

[Jaime Huling (Vice President)]: our deficit will be bigger, but so will our ending reserve cash balance?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Correct. Correct. Because we won't be counting it cumulatively on that line. Right? However, what this also shows, and even taking into account Vice President Huling, what you're raising is that when we go to adopt the TAs and second interim, the district is technically, technically, on paper, in positive territory, again. But we will be advancing a qualified certification because when we adopt a few months later, we'll be back in negative. And so that doesn't look good that we're going up and down in position. So the board's next chance to change certification, the only times you can change certification are during first and second interims. So the next opportunity after next week will come in December. That's important to remember because I'm going to bring you through the ever so controversial FSP options that we have baked in here because I need direction from the board at exactly which one they want to appear next week because we can't go. And we received a letter from the state that we cannot go another budget period without passing one. Okay? So I'm going to remind the board the next page is the fiscal stabilization plan description. The fiscal stabilization plan is a part of the interim report. It's required by law when we're in negative or qualified certification, which, of course, we still are. I don't know if anybody saw, but on the state website, they finally moved us to qualified. So it's official. It provides a plan. So the FSP provides a plan to reduce spending to balance the budget on the unrestricted side of the general fund. Now it gets a little complicated because in that third year at adoption, anything that's negative on the restricted side also has to be accounted for on the unrestricted side because the reserves will be gone at that point. Okay. That's why I'm starting to put that fourth year out there because that's a lot to wrap our heads around. We have updated the plan, meaning the fiscal stabilization plan for second interim to reflect reductions underway as a part of our budget development. There's a list of those there. Now I'm going to walk you through those portions. So on page 16, these two items are what we are already doing and what we already have underway. And these two figures, items number one and number two, are already in the prior pages multi year projection. So once we have something that we're operationalizing, we are allowed to include those reductions in costs in our multi year projection, which makes our fiscal standing better. So the two things that are already in the MYP, aligning staffing with projected enrollment. So far, we've shifted $17,000,000 in expenses from the unrestricted to the restricted side. And then the other 3,000,000 is from some slight reductions in staff trimming around the edges as well as the PKS. Number two, the central office reductions. We're still on target for that for next year. The placeholder that we were using before of 14.6, we actually now have a much more exact number for what people have turned in for their budget development from central offices. So that would be 15.264. So those two numbers are included. Now I'm going to move on to numbers that are not currently included and that we need board discussion or feedback about. Go ahead.

[Jaime Huling (Vice President)]: Just for item two for reduced positions and contract services, is part of that contract services portion anticipated savings based on the contracting TA that is part of the UE agreement?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: No. That is actually all contractors that I've eliminated since I've gotten here. I've cleaned a lot of contracted services out, short and long term ones, and insisted that we train staff to do that work, which is what staff is supposed to do. So most of that savings is from actually my department, which holds the district contracts contracting things out. Now we still have some contractors that are going to continue through the rest of this year and some into next year because we have significant areas that we need significant training on, but far fewer than I think what the district has been used to in the So all of those actually came out of the business office who held those contracts for the district.

[Jaime Huling (Vice President)]: Thank you. And I appreciate daylighting that because I feel like there's still sometimes public narratives about like, well, if we just cut the central office, it's bloated. And if we just reduce contracting but, like, people sometimes miss that we made massive cuts to the central office last year, our numbers are actually below average now, even including our county office, or that you are actually already cutting contracting. So it's just great to daylight that.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: And I think there's more that we can do, but we are trimming things down. I think the board needs to be prepared for because it's always the most palatable place to cut from. Response times are going to get longer across the board. There's not much more to cut, particularly in the operations side. We're pretty much going to the bone this year. Just be aware, at some point, I've said the board be prepared for a time that there's nothing much left to cut in certain areas. So we are going to get that to that place within this three year budget cycle. So page 17, not yet included in the multi year projections. Number one, align special education resources with IEPs. This has to do with data collection and making sure that data aligns with things that we are both contracting out for, our NPSs, the non public service I'm sorry, NPAs, non public agreements for services, as well as making sure that our staffing and our vacant positions are booked correctly and not double booked, which we still think is going on. Some of those things, as a result of the TA, because the union is aware of that too, are actually coming over to my side of the house because they just aren't being documented and tracked well. And that makes sense. That specialists don't exist on the non operational side of the house. So we estimate that savings over the next couple of years being about $6,000,000 for the district. And then we are proposing that in fiscal year 'twenty eight, we continue some central office reductions both in but mostly focused on the supplies and contract areas.

[Alida Fisher (Commissioner)]: If I have a question about this, do you want me to hold it and wait till the end or ask

[Phil Kim (President)]: it now?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Up to you. That's what

[Jaime Huling (Vice President)]: we're President Kim? Yeah.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Okay. Okay. And then there's a third page of proposed FSP items also not accounted for in the multi year projection. Some of them pretty specific, others still under development. Number one, portfolio of programs and site consolidations. This is something the board has talked about before. It's been in previous FSPs. The actual savings is nominal, but it is still a savings for the district. So we put it in there. Number two, align staffing with projected enrollment every year. Not to beat on a dead horse, but once we start the process, we should always be aligning our staff, especially since we are a declining enrollment school district. This includes improved budget controls, shifting things to restricted based availability on fund balance, as well as potentially reducing focal student allocation in the future if we continue to struggle financially. Number three, align special education resources with IEPs. This is more specifically about the double budgeting of positions and contract services. So this is sort of a technical issue, but when you have a contract to provide a service to a child that needs it in their IEP, that's great and it's required and we have to do it. However, we shouldn't also be budgeting for a full time person at the same time to provide those services. It's either one or the other. So the way most districts do that is they budget for the people that they need And then if they can't find the person, they get a contract service. And then they take the money from the salary and benefits that's been budgeted for the person they couldn't find, they pay the contract. We're currently budgeting both in some cases. So again, that's not out of any intent to do something bad. It's just that the specialists that do that kind of work are not the ones handling it. So that's transitioning over to procurement and to the data departments in my department so that we can make sure they're aligned and we're not double counting for resources. Central office reductions, continued positions in contract services, and the reconciliation of aged vacancies. So we are seeing, particularly as the board said, an appeals process is not necessarily the most elegant. At some point in the next couple of years, we have to come up with something that's a bit more formulaic and not just grant appeals, because those are still a little squishy when it comes to the rationale of why and the predictability for the school district. So remember, an FSP changes at the first interim, the second interim, and budget adoption. And it has to be dynamic to address the shortfall in the current plus two years. So it always should change, and the numbers should change based on how much we need to cut to get back to stability. The FSP for all three pages illustrates what it would take in the current MYP that I put in front of you tonight to get you back to a potential positive certification for December, which is the next time that we will be certifying our budget. Right? If the board says, we aren't that eager, then that's something that staff needs to know so that we put in something lesser. But keep in mind, it's just, as Elliot said last time, this is just a plan that you're required to have. It can change based on the fiscal status. I will tell you that both myself and I hate calling you staff. I just don't like calling it Niru and Jennifer and Daniel and all of our staff members and friends. We will continue to work the budget hard to make the most savings out of it as we can every year and improve your fiscal standing. But we do have to submit a plan with the second interim. So that's the part that we need input on.

[Supryia Ray (Commissioner)]: Is it is now the time?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Now is the time. Yep.

[Lisa Weissman-Ward (Commissioner)]: Can I ask one more clarifying

[Alida Fisher (Commissioner)]: question? And then if there's anyone else? Okay. So I'll start with my clarifying question on slide seventeen and eighteen about aligning special education resources with IEPs. And we've had this conversation before. This has come up at other budget sessions. But the tension I see in this is in an IEP meeting, and it's by Ed Code, the services that a student needs are determined by the IEP team, not us bureaucrats here in this room. So I want to make that blatantly clear, first and foremost. You were totally bureaucrats. Not be here. I hey. If Chris is calling them staff, I'm calling you guys bureaucrats. Okay? So there you go. Staff are bureaucrats.

[Jaime Huling (Vice President)]: Okay. There you go. Alright. We're politicians. They're bureaucrats.

[Alida Fisher (Commissioner)]: All right. Call yourselves what you want, Okay? Regardless of what we're all going to call ourselves in the room, we are not the ones that decide the services that a student needs in their IEP. So I would just want to point that out. But the tension then becomes, especially with new services, if we don't have a person who can do that, we hire a contractor at the same time as we generally will open a position and try to hire internally. So I believe that has historically led to the double budgeting. And especially when we have just agreed with our union that we want to reduce our reliance on contractors, I guess I just want to understand here, like, I would hope that the goal would be to keep more internal positions open. Like, is that going to yeah, Nero, I see you're jumping at the bit. Help me understand how we're going to continue to hire for much needed positions. I just don't understand how that works on the books.

[Niru Jayaraman (Chief Financial Officer)]: So thank you so much for allowing us to clarify. So the intent here is to actually reduce the contract budget because it has been if you we've received commissioner questions, the contract budget has been exploding year after year. And so we we need to fulfill our end of the UE agreement, which asks us to renegotiate contracts, renegotiate the pricing, right, fly those positions. And so there are several that that is the intent of this plan is that we have like five or six or seven steps to go before we can actually pull back that contract budget and make sure those contractors are incumbents of the district and fill those positions. So that is our intent. That is the plan here. I mean, it's not spelled out step by step. But the intent here is to reduce $6,000,000 in contracts and have those contractors fill district positions. There's no interruption in service. That is the intent here. So we're fully cognizant of the fact that if the IEP requires a service, we have to provide that service regardless of availability of funds. The intent here is to reduce the contract budget and also comply with UE's request in the contract.

[Alida Fisher (Commissioner)]: I would love to see and I know one of the things that's on the next agenda is position control policy, right? And I actually asked a lot of questions around that, like child find and things like that, in case anyone had any yeah, I and some of my questions were what has been provided to us so far has been kind of vague. So if there are policies, procedures, or ways we're going to go about this, are those public facing yet? Or

[Niru Jayaraman (Chief Financial Officer)]: We soft work with colleagues in developing all these steps. So we have to meet with our special ed partners, our procurement staff, and put together a plan in order to spell out all of the steps steps here. But we just want to be very transparent about what is our end goal. So our end goal is to reduce contractors and bring that staff, onboard them into the district and have them become district employees so that we're not double budgeting for both positions and contracts. There should not be any interruption in service to students whatsoever. That's our intent.

[Alida Fisher (Commissioner)]: I appreciate that. And I especially appreciate the student focus I of guess I just my real concern is the timeline of that, you know, and the amount of work that you say and our assumptions that we're going to be able to do that. I guess when we look at the $6,000,000 that's is that in the 'twenty seven, 'twenty eight school year we'll finally be able to realize that and we're not expecting Yeah, that's our deadline. But we're

[Niru Jayaraman (Chief Financial Officer)]: going to start right away. As soon as we're done with second interim, that's a meeting that we need to have with our colleagues and get the plan in place in order to start that. So it may actually be earlier than July 1. So I hope that maybe six or eight months from now, I have better news for you that we've already done all this work. But there are several procedures that we have gone through. I do assume that renegotiating those contracts and bringing them back forward is going to take some time. That there's a runway lead time there that is required for this to go into effect. So thank you.

[Alida Fisher (Commissioner)]: Thank you for that clarification.

[Lisa Weissman-Ward (Commissioner)]: Thank you. This might be a very silly question. Slide 16 versus slide 18. There's central office reductions at $15,000,000 plus. And then there's the same fiscal year 2728 on page 18. Line four is 18 plus. What's Yeah.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: I'd rather say it's on all three.

[Lisa Weissman-Ward (Commissioner)]: Well, 17 is in the context of oh, yeah.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: It's on all three.

[Lisa Weissman-Ward (Commissioner)]: Yeah. Tell me about why those numbers are different.

[Dr. Matt Wayne (Superintendent)]: I can help

[Niru Jayaraman (Chief Financial Officer)]: answer that question.

[Lisa Weissman-Ward (Commissioner)]: Thank you.

[Niru Jayaraman (Chief Financial Officer)]: It's Okay. So the first slide is current FSP measures underway. And that $15,000,000 is for the is to be implemented this coming 07/01/2026. So it's for where it says fiscal year 'twenty seven ongoing, that means 07/01/2026. So we've already worked with colleagues in various divisions. They've already presented items for reduction. About half of this, if I recall off the top of my head, is actually contracts within central offices. So this reflects the 10% reduction that we've already baked into the NYP that we're using to help offset the cost of our agreement and to keep us on a sustainable path. So that's step one. So the the what I internally, what we call the baby FSP is the 7,900,000, which is the 8,000,000 would be a second step on top of the 10%. And that second step is just looking at contracts and supplies in central office. The divisions have already said, if we were to do a 20% scenario, these are the contracts and supplies we'd give up. So that second step is what that is, and that would go into effect not until fiscal year 'twenty eight. So that's 07/01/2027, right? And then the larger yeah, go ahead.

[Phil Kim (President)]: That's the deadline. It's

[Supryia Ray (Commissioner)]: the latest.

[Dr. Matt Wayne (Superintendent)]: That's right.

[Niru Jayaraman (Chief Financial Officer)]: Thank you. And then the big FSP, this is if the board authorizes the release of the go ahead.

[Phil Kim (President)]: No. You got to be careful with your own.

[Niru Jayaraman (Chief Financial Officer)]: Okay, sorry.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: The larger portion Can give mic? Sorry. I keep forgetting these mics. So we have to be careful with language on that third page because this goes into negotiations on labor relations. So this references the assignment that we've made that we went over earlier. Depending upon how significant that assignment actually turns out to be for the union's yet to close TAs, this would account for those additional expenses which we have not yet accounted for. So it depends upon how much of that we end up spending, how much more FSP we have to do. I hope that's clear enough. But I can't go into specifics on that third page as much.

[Lisa Weissman-Ward (Commissioner)]: But the number

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Yes, that you can go into specifics.

[Lisa Weissman-Ward (Commissioner)]: So just trying to figure out where that 18,000 number Sorry. Versus

[Alida Fisher (Commissioner)]: 18,000,000. We

[Lisa Weissman-Ward (Commissioner)]: wish. So I understand. Okay. The 15,000,000 is what's being implemented July 1. Done. 10%. That nearly $8,000,000 is if they went up to 20% in cuts.

[Phil Kim (President)]: 15%.

[Lisa Weissman-Ward (Commissioner)]: 1515%. Yes.

[Niru Jayaraman (Chief Financial Officer)]: So what this $18,600,000 is the scenario is if they did another 10% cut in fiscal year twenty eight.

[Lisa Weissman-Ward (Commissioner)]: So that would be 25% total. Correct.

[Niru Jayaraman (Chief Financial Officer)]: 20. Okay. 20. So actually

[Lisa Weissman-Ward (Commissioner)]: I thought I was I

[Niru Jayaraman (Chief Financial Officer)]: want to clarify. The $8,000,000 on the page before is included in the '18. So the baby FSP is just saying, okay, in addition to your 10%, if you have supplies and contracts that you wanna reduce, no people allowed, this is a scenario that actually our colleagues have already provided us. And so the third page is if I went to 20% and had to cut both people and contracts, it would be 18.6 in addition to the 15 that we've already captured for

[Phil Kim (President)]: fiscal It is in addition to that.

[Niru Jayaraman (Chief Financial Officer)]: Okay. Yes. Okay.

[Phil Kim (President)]: The first is done.

[Niru Jayaraman (Chief Financial Officer)]: Yes.

[Phil Kim (President)]: The second two

[Niru Jayaraman (Chief Financial Officer)]: are Scenarios. Scenarios. Yes. Yes.

[Lisa Weissman-Ward (Commissioner)]: The second one is the baby part of it.

[Phil Kim (President)]: Yeah. And it's not cumulative. It is

[Niru Jayaraman (Chief Financial Officer)]: inclusive. It's inclusive. Yeah.

[Alida Fisher (Commissioner)]: So just to clarify for the public

[Lisa Weissman-Ward (Commissioner)]: when they

[Alida Fisher (Commissioner)]: do get stuff done. Sorry, thought it was on. So slide 16 already done in the process of being implemented.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: And projected.

[Alida Fisher (Commissioner)]: And projected for. Seventeen and eighteen are crystal ball working towards them.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Sure. Because Yes. Because in your multi year projection of your unrestricted general fund, we gave you the current scenario, including the current TAs, as well as some projected expenses for TAs that haven't been settled. So page three is saying when we settle all those, this is likely the extent that an FSP will have to go to, to get us back to positive December, if that's the desire of the board. Does that make sense?

[Supryia Ray (Commissioner)]: Okay. I have a couple of questions. And one is a very general question that I would like to ask. It's for Mr. Munoz. I'm sorry if I'm mispronouncing your last name. I think it would be helpful to folks to understand what you do in position control and the sorts of, essentially, brief description of the work you do, what you're working on, and what you anticipate coming up.

[Daniel Muñoz (Director of Position Control)]: Of course. Thank you, Commissioner. So part of position control, when I got here, it was very apparent to me that there were no controls in place for position management. And so that led to having unaccounted vacancies, ghost positions, schools and offices being allowed to just open positions without the proper approvals, without the proper fundings attached to these positions. So part of my job is going in and trying to figure out where these vacancies are. Are they really needed? If they're not, can we eliminate them? If a new position request comes in before we actually approve it, is there something out there that we can repurpose before we actually issue a new position number? So really reconciling and making sure that the incoming requests can be filled by anything that's currently already on the books. Sorry. As Chris mentioned, we just finished the first position reconciliation. So part of that process was taking everything that came out from the school budget development. All of the positions that were requested by school sites to close, whether it was for whatever reason school based decisions, enrollment, you name it match that up with all of the other school sites that are asking for new positions and then reconciling those to try and figure out, Okay, well, what is being closed? Can they cover what is being new? Then the delta is now, okay, that's what's actually going to be affected in terms of layoffs and reconsolidations and all of those next steps that HR is going to be responsible for. So my job is really trying to make sure that we are not authorizing, over authorizing positions at school sites and making sure that we are sticking to the staffing models that we've established, making sure that we're maximizing those positions throughout the district.

[Supryia Ray (Commissioner)]: Thank you. Can you just the end part of my question had been about what you anticipate coming up to the extent you can answer that. Is it essentially continuing what you have been doing? Are there other things on the horizon that you want to give us a heads up about or that we should be thinking about?

[Daniel Muñoz (Director of Position Control)]: Well, in terms of what's coming up on the horizon, it's just now getting into this practice of making sure that before we authorize new positions, that we just really look at the books and make sure that we have something that's already in place that can take its place as opposed to just creating new positions just for the sake of creating new positions. So that's just going be an ongoing practice going forward for the district. And it is going be something new for the district to be catching on to. I've already run into a couple of schools where they're not really familiar with some of these practices. So getting them used to these new practices is going to be what's upcoming on the horizon. So you mentioned, Commissioner Fisher, that we are working on a board policy for position control. So that is coming next week. And so that is part of what's coming on the horizon. A company in that is also an administrative regulation that details the roles and responsibilities for human resources, budget, position control, and payroll. So it's going be a collaborative effort to make sure that all reconciling positions, what we're budgeting, what we're actually paying out, and what's any differences associated so we can capture those savings because those savings are what's going to help our fiscal standing in the coming years. Aligning also aligned to that is I've drafted a position control manual that will be shared widely that actually describes how to. So how do you create a new position? When do you create new positions? It'll have descriptions for the approvals. It'll have really useful job aids, explanations for what approvals are required for what types of position actions. So all of this is all new, and that's what's exciting me. It's like new processes for the schools to follow and ultimately help the district just get into a better financial situation.

[Supryia Ray (Commissioner)]: Thank you so much. I really appreciate that. My other general question is more directed to Mr. Mount Paditas, although perhaps other staff want to take a stab at it. There was a lot of concern in December over the fiscal stabilization plan as it was then presented. So I guess just to make sure that we're all on the same page here with our understanding, can you explain whether or not the decisions made in January with the staffing model and the appeals will be changed or if those will stand for the next school year? And also, can you generally can you explain in layman's terms how the fiscal stabilization plan being brought to us that's being discussed now, how that compares to the one presented in December?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: So the fiscal stabilization plan in January did not impact the staffing model development. That was really driven by the law, by the CBA and Ed Code, is which what we referenced earlier. The only things that we implemented from that plan were the central office reductions, which we knew that we were going to need, which is why those are included already in your multi year projection. And that has to be done, frankly, far in advance of a second interim. So if we didn't start it, it wasn't going to get done this year, and we'd be in a worse shape. The things that are in this plan so the other thing that appeared in this fiscal stabilization plan, which, of course, was not contentious, were all the things that we were doing to improve the budgeting system. I I will tell you, we've done all of those. And the estimates that I gave you at that time were clearly conservative estimates. We've outperformed them, which is why even though we just passed or I'm sorry. We haven't passed. That'll happen next Tuesday. Even though this the TAs, the new TAs haven't come to you, this multi year projection shows that we are maximizing resources. And so it's not having as bad of an impact financially on the district that one might have imagined for the cost of 160,000,000 to $180,000,000 agreement over a three year period of time. So in other words, we can still manage it and still make year to year reductions that are reasonable. And remind me of the other part to your question. I'm sorry, Commissioner.

[Supryia Ray (Commissioner)]: Sure, I guess I'd also just like to follow-up and clarify first. The decisions that were made on appeals in January and the numbers that were allocated at the time, Will those be changed?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: No. I mean, we discussed a little bit internally. I'll use my technical school speak. We had already done staff assignments, and we've already done appeals as well as additional allocation to ed services, and the superintendent work through that. And as a principal and I think I shared this with the board before even though we had a big cliff coming our way financially, don't believe in takesies backseys this late in the year. If we've told schools that this is what they have based on their enrollment, then we need to stick to that for now, for next year. That's the predictability and stability I think we're required to provide to our school sites. However, enrollment will be trued up over the next couple of weeks. It does change a little bit, but we're looking forward to that true up because what we did say and put in everybody's allocations is that if you have an additional classroom of TKers show up that we did not allocate, then clearly we'll be allocating you another TK teacher and para. If you have a kindergarten that didn't show up, then we will be taking that kindergarten that didn't show up and maybe moving it to another school that did have a kindergarten show up. So there will be around in March and April of truing up actual enrollment, just like we do at the beginning of the school year after the ten day count, and we find out that we have a teacher that didn't have enough students show up at one site and more students that showed up at another site, and we have to move staff to accommodate for that. So those moves will still occur. So those are changes that will still be happening. But as far as changing the base allocations, no. And I just don't think it's good practice. And I think myself and Ed Services and the superintendent all agree that that just doesn't provide the stability that we want to. Now, how the appeals worked, that was more with so there were a couple of groups. There were augmentations provided a little bit I think that's what Niru was referencing earlier through supplemental concentration augmentations to the base provided by ed services based on the profile of the school. And then there were additional appeals granted by the superintendent and ed services based on the nature of the issues at the school as described by the principal and lead. We'll probably have to scale back on some of those in the future as well because we just won't be able to be as generous as we were for next year.

[Supryia Ray (Commissioner)]: Okay. The second part of my question sorry. Had been I was just kind of following up on that prior part. The second part of my question, which you had asked me to repeat, was about how the fiscal stabilization plan that is coming up compares to the December 1.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Portions of the December 1, people didn't want to talk about because it was all on the financial services department to do it, and we were okay with those. So those have been done and we've outperformed. We actually doubled, more than doubled the yield that we anticipated on those, which is helping immensely. The first two pages of this FSP, the two items that have been implemented and the two that we're saying should definitely be implemented over the course of the next eighteen months, those are the ones that I would say are probably minimally going to be looked for by the CDE to bring your second interim multi year projection into alignment. And the third page is what we're saying we can do it now or we can do it at budget adoption, but you're going to have a new third year in budget adoption, which we provided tonight. And in our way of thinking, because fiscal services folks and operations folks tend to be planners, We always say do it ahead of time so people know what to expect, what the potential things that they're looking at coming. So that third page, we can implement now or adoption or a variation of that depending upon the fiscal standing. The first two pages are less than the one in December. All three pages are greater than the one in December. Is that what you were asking? I believe I got it. Okay. Sorry if I'm not

[Phil Kim (President)]: I'll have Commissioner Vice President Huling go. It is almost 07:20. We're twenty minutes past the time that we had allocated for this. So I'll have Commissioner Huling go. If there are any final clarifying questions, let's get those out now. And then we will have we will continue this conversation, of course, at the next meeting next Tuesday.

[Jaime Huling (Vice President)]: So I just wanted to clarify the impacts of basically the board providing direction that we would only want to go with the first two pages versus all three pages. And I heard you say that doing all three pages is what would be necessary in order to get to a positive fiscal certification at first interim next year, so December 2026, and that there's not an option at this point for us to get to positive this year without immediately going back into negative, basically?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: I'm going to listen for wrestling to my right because we've debated this a lot, and I've put in a lot of calls to the state. Technically, when you approve an FSP, I am allowed to include those savings in your multi year projection. And if we did all three of these pages at second interim, would it potentially put us back into positive for second interim for longer than just this year? The answer is yes, if the board would like to be that forward looking, knowing that they can change it moving forward. However, the state is going to, I think I guess I more than think I know that they're going to push back pretty hard because they question whether we have that ability to do that much long term planning and to follow-up with our decisions that far into the future, which is why minimally I would recommend the first two pages and maximally, making up a term, I guess, maybe it's even a real word, if you want to include the third page, then we can certainly make the argument that you're back in the positive now. But I think we're going to face some headwinds.

[Jaime Huling (Vice President)]: And if we did just do the first two pages, then is that essentially unless an additional further FSP is adopted in the future. But assuming we just were we to adopt only the first two pages, then does that essentially leave us in qualified in perpetuity unless and until a larger cut FSP is adopted?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Well, it's only for each reporting period. So we will have to adopt an FSP at adoption. And that's why I put the fourth year in here digesting because that will be your third year. And then the requirement will be that the FSP covers that year, which is a much bigger number, which is why we put this preliminary draft out of page three, recognizing it's a bigger number. And we're floating a plan that we think it is certainly impacts the district. You can't do a reduction and not impact the district, but it impacts the negative impacts are the least, which is what our job is, is to make sure that it's the least negative impact.

[Jaime Huling (Vice President)]: I really appreciate that, at least from what our conversation has been tonight and what's been presented here, it seems like this even all three pages, the big FSP version is much, much more student centered and has cuts further away from schools than the FSP that was presented to the board in December, which had a number of line items that were immediate cuts to staff and services provided to students at sites. So I really appreciate that.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Agreed. However, remember and keep in mind that some of the language here and what you saw on the restricted side, saying

[Phil Kim (President)]: that

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: we are not going to continue to fund positions on restricted resources when they expire, some of those same conversations will come back because we're also going to run out of restricted money. And if we don't pay for whatever we run out of in that third year of restricted, the general fund has to pay for it, and it won't be able to afford it at that time. So it hasn't eliminated that. It's more incremental that we reduce staffing at school sites by the number of students that enrollment is going down in those services. But that third year is still going to have to have some significant decisions because we just are going run out of money.

[Jaime Huling (Vice President)]: Understood. This will be my final.

[Phil Kim (President)]: Final. How to get going?

[Matt Alexander (Commissioner)]: One second.

[Jaime Huling (Vice President)]: It's two parts.

[Phil Kim (President)]: One part. Well,

[Jaime Huling (Vice President)]: one question I have is a holdover clarification question from the first FSP because the first FSP had $3,000,000 in savings from eventual portfolio and program consolidations. And there was just confusion, I think, among both board members and community members as to whether that $3,000,000 was representing three programs or schools total being closed cumulatively or whether it was representing three programs or schools per year for each year of three years, which would be nine total programs or schools being closed. And that created a lot of anxiety, I think, in the community. So I just wanted to ask that question to clarify.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: That goes into whole different sorts of areas. Let's see. So when we do it as a budget, we have to make assumptions around the figure that we provide you to to substantiate the figure. So our rough estimate right now is, as we do program consolidations, what is the incremental savings per site? We've come up with an incremental savings of about $1,000,000 per site. And we base that on the assumption that if we were consolidating programs that we wouldn't close our largest programs, we'd close our smallest programs. And so that's the average cost incrementally of smaller sites and smaller programs, if that makes sense. So that's where we're basing our budget estimate on. This is just one year for fiscal year twenty eight, which would mean three smaller program consolidations for next year that we would be able to gain that savings of in fiscal year 'twenty eight.

[Jaime Huling (Vice President)]: So the answer is it represents a potential estimate of three, not nine.

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Correct.

[Jaime Huling (Vice President)]: And can I just ask one more

[Phil Kim (President)]: question? I

[Jaime Huling (Vice President)]: know you're going to kill me. But this question is for the superintendent around the central office reductions, which are a significant portion of this whole plan. And I know that there are central office services that have already been cut a lot and that may not that may actually be in a position where they need to be expanded from where they are now because their vacancies or teams need to be built up to function adequately. Does this take that into account? Like, these would reductions in some teams also be offset by investments in other teams? And would this be too draconian to allow that, for example?

[Dr. Matt Wayne (Superintendent)]: Thank you for the question. And I do apologize for coming late. I was at the Cabe Conference and was not able to leave on time. In terms of the central office cuts, as you heard from Niru, there's a large portion of the cuts coming from contracts. And that's because we're making a very decisive decision to reduce contracts in lots of different areas and have staff take on some of that work. We're also making some significant changes in the way our staff are doing work. So we're going to be moving staff to consolidate work, consolidate staff, consolidate positions. It does mean and we had some tough conversations this morning it does mean that we're going to make a decision on certain programs or certain activities that we are currently doing that we will no longer do. We're going to sit down and have really focused conversations with our partners with our staff about what that would look like. Yeah, this is a really painful budget. It's going to hurt. But we heard loud and clear that we need to protect our schools and services to our students. And so when we're faced with really tough budget decisions, this is where we're deciding to make cuts in. So for example, we're going to ask some of our staff to take on larger chunks of works, and then there's other parts of the work that we are going to suspend or pause.

[Phil Kim (President)]: Commissioner Fisher and then Commissioner Alexander.

[Alida Fisher (Commissioner)]: I wasn't trying to steal microphone from you, Vice President Huling. I promise. First, I'll try and keep this brief. But just to follow-up on Commissioner

[Lisa Weissman-Ward (Commissioner)]: Ray's what?

[Mr. Trujillo (Board Office/Zoom Host)]: Question

[Alida Fisher (Commissioner)]: The more you interrupt me, the less brief I will be. Just to Okay. But to follow-up on Commissioner Ray's question, you know, she had asked about baseline staffing versus appeals and add backs. We saw that this year in Viz Valley Middle School, for example, right? Like where last year there had been a huge number not a huge number, but they had like seven staff that were added back based on appeal and it was deemed appropriate. So and I think I just want to follow-up. Does that make that their baseline? Or does that mean every year they have to appeal to get that seems exceptionally cumbersome for staff, especially when we've got already. So I guess if we determine one year that that is appropriate, why doesn't that at least become closer to baseline? I mean, that was very, very disruptive for that community and others. Especially the add back process is a lot of work for everyone. And so I'm just wondering how and I don't think this is a question, especially considering our limited time, President Kim. Maybe this is a question to get answered on another day. But I guess my question really is if we're finding so many add backs are necessary, then is the baseline staff model actually sufficient for some of our schools? And does it really take equity into account the way that we want it to based on our mission and our values?

[Dr. Matt Wayne (Superintendent)]: I appreciate you letting us have more time to answer. So we could definitely continue the conversation at the next meeting. But just really quickly, our staffing model is created based on the number of students in our schools and the contractual agreement we have with our labor partners. And so we need to take both of those things into consideration as we decide how to allocate staff to schools. So it is quite unfortunate that we are continuing to see a decline in particularly sixth grade enrollment and also ninth grade enrollment. And that's why we're seeing the biggest pain in terms of staff reduction or adjustments to staff allocation in both of those cohorts of schools. I certainly don't think this is the right way to budget. We shouldn't be doing this because our schools, our students, our staff need stability. So once we get ourselves through this moment in time and make the really second year of tough decisions, we're going to be at a place where we'll have greater stability. We'll have a way for us to have greater cushion. So when we do see the ebbs and flows of enrollment hit us, we don't need to decimate the schools. That was one of the original thinking around building the Fund 17 so that we would have some cushions to be able to soften the blow of changes in enrollment. So we have to do a better job at managing that. We have to do a better job at continuing to keep an eye on our enrollment so that we can be really nimble and mobile with that. Short answer for that.

[Alida Fisher (Commissioner)]: I appreciate that. And I do look forward to getting to a place where we're not budgeting to our contracts, but actually budgeting to our values and our vision, values, goals, and guard rails as well. So that'll be a later conversation. I'd love and I'd based on limited time, I'll ask this maybe as a placeholder for next week. But you mentioned that we outperformed our first interim numbers over what was presented in December. Could you expand on that next week? It doesn't have to be right now. Help us understand. If it's a lengthy answer, want to be respectful of time. If

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: the deficit represents 100% of everybody's expenditures and they don't use them, we are more quickly taking savings. So we should be outperforming the budget. The better that we do, the better shape the district is in. That doesn't mean people like their money being taken away. It's just the right thing to do if they're not spending it appropriately and quickly.

[Alida Fisher (Commissioner)]: Okay. And I think the last question well, I have a lot. But the last question for today is one of the things we talked about with this tentative agreement was renewing QTA and finding other revenue streams to offset these increases. Is any of that taken into account in any of this? I know a lot of that would potentially start in 2028. So I'm wondering '27. '27, '28. So will we be able to see those projections? And would that maybe impact the number of draconian cuts that we have to make?

[Chris Mount-Benites (Deputy Superintendent, Business Services)]: Good question. So the projection doesn't go that far out yet, I don't believe. And the assumption is that based on the conversations during negotiations, including with the city as well as in various conversations with the school board, that we need to go out. Our unions need to support the passage of repassage of QTEA. And it needs to be increased, the per parcel amount, if it's going to truly cover the health care for all that we promised in the TA. So that has to be done, or it's going to open up a very large hole in the budget in a very, very short period of time.

[Phil Kim (President)]: Commissioner Alexander?

[Matt Alexander (Commissioner)]: Thanks. I'll try to be as brief as possible. Think the baby's fiscal stabilization plan looks really solid. I my I think would have concerns with adopting the other one now, both because it sounds like it may not matter that much in terms of the state. The state may not believe that we have yet shown credibly that we can do this, it sounds like. And secondly, I think it needs I think if we're going to get to this level, which if we first need to be really clear that we need to. And then we need to be really clear about what the impact of these reductions are. Before you got here, superintendent, we were talking about enrollment a bit. And when I look at the enrollment numbers, this year we were down by I actually just did them out. There was like three eighty five kids compared to last year. So my question was, is that a blip? Or is that a trend? Chris responded that we there's there the demographers have done that analysis. And so I think it would be really important for the board and the public to sort of see that, to understand. And and I, for one, would love to see also a plan and a strategy of increasing an enrollment in SFUSD. Mean, if we have a I I do think there's this kind of danger if we adopt a plan like this. It of of sort of sending this sort of doom loop signal to the future of, like, well, we're gonna have to make these drastic cuts, you know. So I do think there's a balance here of how do we move forward in a fiscally responsible manner, but also say we have a plan to invest and attract families to SFUSD so that then we can actually change it around. I mean, are certain some of the demographics are the demographics. If there's fewer kids in the city, that's not going to change. On the other hand, 30% of the K through 12 aged kids in the city go to private schools. So and we've seen that some of the COVID drop was related to folks moving out of public schools. So I just think that over the next I would love to see between now and June some real exploration of those ideas before we sort of say whether or not we need to go to the more dramatic fiscal stabilization. That would be my feedback.

[Phil Kim (President)]: Vinnie? Can I just Yes?

[Dr. Matt Wayne (Superintendent)]: Really quickly. You're absolutely right, Commissioner Alexander. We need to also show our public that we're doing amazing things. I was just at a conference of I don't remember I don't know how many thousands of people that was in that room. And people wanted to hear that we are standing up for our students. We just committed for this district to be a sanctuary district. We're putting even more into instruction and trying to move the needle for all of our students. So I think that is exciting. And we're going to be open well, this year we're opening up Mission Bay Elementary School. We've got lots and lots of applications for that school, tons of interest in even more transitional kindergarten spots. And then next year we're opening up a K-eight Mandarin School and trying to figure out ways to support our students in special education with services that's in the district. So there are lots of things. And I think you're absolutely right. We need to do a better job at just singing that from the hilltops of all the hills in San Francisco. All the hills. All the hills. I was going to go into my Sound of Music.

[Phil Kim (President)]: And this is where I will wrap by thanking so much to staff for this study session. Very much appreciate the transparency, the data, the honesty, and the ability to have this to process before we chew on this a bit more next Tuesday. And so with that, I will bring us to a close here and adjourn the meeting at 07:39PM.