OUSD on Track to Run Out of Cash After Avoiding Hard Decisions, Scathing Letter Says

Oakland is dead.  The schools are dead and those running the District are too ignorant to know they are dead.  They gave the teachers a 10% raise, with a dime to pay it.  For years they have known they have too many schools.  Instead of closing them, they created MORE.  The Feds need to take over this District.

“The Oakland Unified School District, while facing a $152 million budget shortfall this year, is putting off difficult but consequential decisions, according to the letter sent to the district on Tuesday and obtained by KQED. The letter went on to say OUSD could be out of cash by November and unable to meet its financial obligations if it doesn’t approve long-delayed cost-saving measures — most significantly by possibly closing and merging schools — in the next six months.

“If the Board does not make decisions now, it will rapidly lose the ability to make them at all,” Alameda County Superintendent Alysse Castro wrote in the letter, raising the specter of the total loss of local control if the district needs another bankruptcy loan from the state.”

Failed schools.  Illiterates running the schools.  Racism in the classroom.  Maybe it would be best to close all the schools and start over.

OUSD on Track to Run Out of Cash After Avoiding Hard Decisions, Scathing Letter Says

Katie DeBenedetti, KQED,  1/22/25  https://www.kqed.org/news/12023461/ousd-on-track-run-out-of-cash-after-avoiding-hard-decisions-scathing-letter-says

Oakland’s school district will run out of money as soon as next fall if it doesn’t make significant budget changes, the head of the Alameda County Office of Education said in a new letter that lays out in stark terms the fiscal crisis gripping the district.

The Oakland Unified School District, while facing a $152 million budget shortfall this year, is putting off difficult but consequential decisions, according to the letter sent to the district on Tuesday and obtained by KQED. The letter went on to say OUSD could be out of cash by November and unable to meet its financial obligations if it doesn’t approve long-delayed cost-saving measures — most significantly by possibly closing and merging schools — in the next six months.

“If the Board does not make decisions now, it will rapidly lose the ability to make them at all,” Alameda County Superintendent Alysse Castro wrote in the letter, raising the specter of the total loss of local control if the district needs another bankruptcy loan from the state.

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Castro’s office is also stepping up its oversight of the beleaguered district, a move that was automatically triggered by the district’s negative budget certification in its first fiscal review of the year. The Alameda County Office of Education will assign a fiscal adviser to guide OUSD through the next six months as it rolls out its latest budget-balancing plan, passed in June.

“This is a last opportunity to provide additional intervention to support the Board in their decision-making efforts,” Castro wrote in the letter.

The warning comes on the heels of a tense final school board meeting in December, where board members were expected to vote on a proposal to merge 10 small schools that are co-located on five campuses. Despite the standing-room-only crowd of emotional parents, students and staff, no representative made a motion to vote on the plan, leaving it stalled indefinitely.

Former board president Sam Davis, who opted not to run for re-election, cautioned against kicking the can further down the road, since it would only mean making larger cuts later.

“I did my best this year as your president to carry us through the AB 1912 [consolidation] process,” he said before the meeting closed. “Yet here we are in December without a decision to move forward with the school closures and consolidations that we all know are inevitable given the rising cost of living that is pushing families out of Oakland and declining enrollment overall.”

OUSD has backed off of plans to close schools twice since 2021, when a plan to shutter 11 schools led to widespread anger from families and a hunger strike by two staff members. That proposal passed, but it was reversed when a new board took office in January 2023.

Last fall, the mergers were proposed after a larger list of schools to shutter was floated to board members by OUSD Superintendent Kyla Johnson-Trammell but didn’t receive enough support, Davis told KQED at the time.

FCMAT, the financial company tasked with assisting the district and county with financial management, said the district has repeatedly failed to use its tools to develop a “coherent” fiscal solvency plan, according to the Alameda County letter.

“Instead of using these resources, the district has created multiple alternative plans, which it continues to alter or bypass when faced with difficult decisions,” FCMAT’s review said. “As a result, the district board defers necessary decisions, and when made, they are either rescinded or their implementation is delayed.”

The budget crisis isn’t new — OUSD has been in state receivership since 2003 and is currently set to regain full financial control in 2026 after making its final loan payment to the state — but it has been exacerbated by declining enrollment and significant increases in compensation.

During the COVID-19 pandemic, OUSD was able to lean on one-time relief funds, especially as its number of students declined, but those have now dried up.

In June 2023, the board voted to give teachers a 10% raise after they went on a seven-day strike, but without making necessary budget adjustments elsewhere, it’s been spending beyond its means to cover these new wages.

While enrollment dropped in the early 2000s, OUSD opened more than 40 new small campuses as part of a movement meant to improve equity for students in Oakland’s lower-income neighborhoods.

Lisa Grant-Dawson, the district’s chief budget officer, said that in the past, declining enrollment was something “almost not accepted” by the district. For years, they’ve pushed off restructuring and scraped by making mid-year cuts.

“It’s been decades of not dealing with systemic issues and ultimately asking the superintendent … and the staff to make it work for the year with some commitment that ‘We’ll do something in the future,’” she told KQED. “That doesn’t happen and we just reach the place where we’ve run out of space for us to be able to make amends as we have historically.”

The current budget-balancing process — known as the Re-Envision, Redesign, and Restructure plan — includes reviewing the district’s footprint, which could mean closing or merging schools and restructuring its staffing formula, business and operations, and school site allocations. The board will also examine equity and student outcomes.

It will add to the cost savings the budget team identifies in the 2025-2026 spending plan after the board approved more than two dozen budget-balancing solutions for district staff last month. These include centralizing contracts with community agencies and supply manufacturers and reducing school site discretionary funding.

The new board seems less amenable to school consolidations than the last without Davis, but Castro warned that officials have reached the “fork in the road” she’s warned about for the last year of the budget discussion.

“One path leads back to full local control: paying off the loan, exiting trusteeship, and embarking on a new era of sustainable community schools. The other path — one paved by refusing to make tradeoffs and by deferring hard decisions — leads quickly to another bankruptcy loan from the State and a forfeit of local decision-making authority,” she wrote.

Grant-Dawson isn’t sure that’s enough time to fully develop a strategic fiscal plan or if the board will move to implement it.

“I think that they can develop concepts. I think what we’ve seen historically, though, is there is a commitment to move in a direction, you just don’t get there,” she said.

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