Rescue Union School District Report

Rescue Union School District Management Review August 9, 2012 Joel D. Montero Chief Executive Officer Fiscal crisis & ManageMent assistance teaM August 9, 2012 David Swart, Superintendent Rescue Union School District 2390 Bass Lake Road Rescue, CA 95672 Dear Superintendent Swart: In March 2012, the Rescue Union School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for a management review. Specifically, the agreement stated that FCMAT would perform the following: 1. The Rescue Union School District is requesting that the FCMAT team conduct an organizational and staffing review of the district’s central office departments and workflow. The review will consist of the following departments: Superintendent’s Office, Business Services, Personnel, and Maintenance, Operations, Transportation & Facilities. 2. The team will provide comparative staffing data for school districts of similar size and structure and provide recommendations to improve the efficiency or may reduce costs of the district. The district office comparison will include at least six comparable school districts located in the geographical region or and may include comparable districts utilized in the collective bargaining process by the Rescue Union School District. 3. The team will review job descriptions for all department provisions, interview staff and make recommendations for staffing improvements. All recommendations will include estimated and calculated values for any proposed position reductions or enhancements to the organizational structure. 4. The team will evaluate the current work flow of the central office departments and provide recommendations for improved efficiency, if any. 5. The Rescue Union School District is requesting the FCMAT Team to assist the district in validating the district’s multiyear financial projection using the 2011-12 second interim financial report as the baseline document. FCMAT will review the district’s budget assumptions utilized to forecast the district’s financial projections and make recommendations, if any. FCMAT Joel D. Montero, Chief Executive Officer . . 1300 17th Street - CITY CENTRE, Bakersfield, CA 93 . 301-4533 Telephone 661-6 . 36-4611 Fax 661-63 . 6-4647 422 Petaluma Blvd North, Suite. C, Petaluma, CA 94952 Telephone: 707-775-2850 Fax: 707-775-2854 www.fcmat.org Administrative Agent: Christine L. Frazier - Office of Kern County Superintendent of Schools This final report includes the study team’s findings and recommendations in the above areas of review. We appreciate the opportunity to serve the Rescue Union School District, and extend our thanks to all the staff for their assistance during fieldwork. Sincerely, Joel D. Montero Chief Executive Officer i TABLE OF CONTENTS Table of contents About FCMAT .........................................................................................iii Introduction ............................................................................................1 Executive Summary ..............................................................................3 Findings and Recommendations .....................................................5 Staffing and Organizational Structure ....................................................5 Job Descriptions ...........................................................................................10 District Office and Auxiliary Departmental Structure ......................11 Comparative Districts .................................................................................24 Finance ............................................................................................................27 Subsequent Events ......................................................................................29 Appendix ................................................................................................31 Rescue union school DistRict ii TABLE OF CONTENTS Fiscal crisis & ManageMent assistance teaM iii ABOUT FCMAT About FCMAT FCMAT’s primary mission is to assist California’s local K-14 educational agencies to identify, prevent, and resolve financial and data management challenges. FCMAT provides fiscal and data management assistance, professional development training, product development and other related school business and data services. FCMAT’s fiscal and management assistance services are used not just to help avert fiscal crisis, but to promote sound financial practices and efficient operations. FCMAT’s data management services are used to help local educational agencies (LEAs) meet state reporting responsibilities, improve data quality, and share information. FCMAT may be requested to provide fiscal crisis or management assistance by a school district, charter school, community college, county office of education, the state Superintendent of Public Instruction, or the Legislature. When a request or assignment is received, FCMAT assembles a study team that works closely with the local education agency to define the scope of work, conduct on-site fieldwork and provide a written report with findings and recommendations to help resolve issues, overcome challenges and plan for the future. Studies by Fiscal Year 90 80 70 60 50 40 30 20 10 0 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11* 10/11** *Projected **Actual Rescue union school DistRict seidutS fo rebmuN FCMAT also develops and provides numerous publications, software tools, workshops and professional development opportunities to help local educational agencies operate more effec- tively and fulfill their fiscal oversight and data management responsibilities. The California School Information Services (CSIS) arm of FCMAT assists the California Department of Education with the implementation of the California Longitudinal Pupil Achievement Data System (CALPADS) and also maintains DataGate, the FCMAT/CSIS software LEAs use for CSIS services. FCMAT was created by Assembly Bill 1200 in 1992 to assist LEAs to meet and sustain their financial obligations. Assembly Bill 107 in 1997 charged FCMAT with responsi- bility for CSIS and its statewide data management work. Assembly Bill 1115 in 1999 codified CSIS’ mission. AB 1200 is also a statewide plan for county office of education and school districts to work together locally to improve fiscal procedures and accountability standards. Assembly Bill 2756 (2004) provides specific responsibilities to FCMAT with regard to districts that have received emergency state loans. iv ABOUT FCMAT In January 2006, SB 430 (charter schools) and AB 1366 (community colleges) became law and expanded FCMAT’s services to those types of LEAs. Since 1992, FCMAT has been engaged to perform nearly 850 reviews for LEAs, including school districts, county offices of education, charter schools and community colleges. The Kern County Superintendent of Schools is the administrative agent for FCMAT. The team is led by Joel D. Montero, Chief Executive Officer, with funding derived through appropriations in the state budget and a modest fee schedule for charges to requesting agencies. Fiscal crisis & ManageMent assistance teaM 1 INTRODUCTION Introduction Background Located in El Dorado County, the Rescue Union School District serves students in kindergarten through eighth grade and had an enrollment of 3,993 as of October 2011. The district serves the communities of El Dorado Hills, Cameron Park, Rescue and Shingle Springs and operates the following seven schools: • Rescue Elementary School • Green Valley Elementary School • Jackson Elementary School • Lake Forest Elementary School • Lakeview Elementary School • Marina Village Middle School • Pleasant Grove Middle School As of July 1, 2012, the chief business official and the director of maintenance, operations, facili- ties and transportation took an early retirement incentive option offered by the district. Both managers had long service records and a wealth of historical information about district opera- tions. The district’s governing board has made several budget adjustments and staffing reductions over the last four fiscal years to maintain fiscally solvency. Resulting vacancies in the two depart- ments added to the workload of these two managers, which will make it difficult for the district to fill the void. In March 2012, the district and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into a study agreement indicating that FCMAT will perform the following: 1. The Rescue Union School District is requesting that the FCMAT team conduct an organizational and staffing review of the district’s central office departments and workflow. The review will consist of the following depart- ments: Superintendent’s office, business services, personnel, and maintenance, operations, transportation & facilities. 2. The team will provide comparative staffing data for school districts of similar size and structure and provide recommendations to improve the efficiency or may reduce costs of the district. The district office comparison will include at least six comparable school districts located in the geographical region or/and may include comparable districts utilized in the collective bargaining process by the Rescue Union School District. 3. The team will review job descriptions for all department positions, interview staff and make recommendations for staffing improvements. All recommen- dations will include estimated and calculated values for any proposed position reductions or enhancements to the organizational structure. Rescue union school DistRict 2 INTRODUCTION 4. The team will evaluate the current work flow of the central office depart- ments and provide recommendations for improved efficiency, if any. 5. The Rescue Union School District is requesting the FCMAT team to assist the district in validating the district’s multi-year financial projection using the 2011-12 second interim financial report as the base line document. FCMAT will review the district’s budget assumptions utilized to forecast the district’s financial projections and make recommendations, if any. Study Team The study team was composed of the following members: Debi Deal, CFE Eric Smith FCMAT Fiscal Intervention Specialist FCMAT Consultant Los Angeles, CA Templeton, CA Leonel Martínez FCMAT Technical Writer Bakersfield, CA Study Guidelines The Fiscal Crisis and Management Assistance Team (FCMAT) visited the district on May 1-3, 2012 to conduct interviews with district staff, collect data, review documents and inspect facili- ties. This report is the result of those activities and is divided into the following sections: I. Staffing and Organizational Structure II. Job Descriptions III. District Office and Auxiliary Departmental Structure IV. Comparative Districts V. Finance Fiscal crisis & ManageMent assistance teaM 3 EXECUTIVE SUMMARY Executive Summary Over the last four fiscal years, the Rescue Union School District has implemented program and staffing reductions throughout the organization as state revenues diminish and cash deferrals increase. In an attempt to keep these decreases from affecting the classroom, the governing board and district administration reduced and reconfigured district-level staffing three times since 2008-09 and struggle to maintain high levels of service to students. On June 30, 2012, employees in two key administrative positions retired. Both the chief business officer and director of facilities, maintenance, operations and transportation had worked several years in the district, taking with them historical knowledge and experience. FCMAT conducted an organizational and staffing review to provide the governing board and district administration with findings and recommendations for organizational efficiency and effectiveness at the district office and support departments. District Office and Auxiliary Departmental Structure FCMAT reviewed staffing levels and workflow in the superintendent’s office, business operations, human resources, technology services, maintenance, operations, grounds and transportation services in order to identify areas of redundancy, improper segregation of duties between depart- ments, and inappropriate staffing levels based on industry standards and comparisons to other districts of similar size and composition. Comparison Districts Six comparative districts were selected using Ed-Data, a collection of statistical performance, demographic and financial data supplied by California school districts. Ed-Data provides a unique information database through the cooperative efforts of the California Department of Education, EdSource and the Fiscal Crisis & Management Assistance Team. Finance The district has maintained fiscal solvency during a time of unstable funding for public educa- tion. For the fifth consecutive fiscal year, the adopted state budget is predicated on unknown variables outside the district’s control. Continued budget reductions and cash deferrals have placed many school agencies in a difficult financial position. Although Rescue Union has sufficient reserves as shown in the 2011-12 second interim budget report, the district is in declining enrollment and is deficit spending. It should continue to monitor multiyear budget projections and implement adjustments as necessary. Rescue union school DistRict 4 Fiscal crisis & ManageMent assistance teaM 5 STAFFING AND ORGANIZATIONAL STRUCTURE Findings and Recommendations Staffing and Organizational Structure To accommodate fluctuations in enrollment and revenues, the Rescue Union School District should have a clearly defined organizational structure to guide its daily operations. The organiza- tional structure should be shown in the district’s organizational chart and establish the framework through which the district demonstrates leadership and accountability. As the district’s enroll- ment and revenues change, the organizational structure should adapt accordingly. School districts traditionally have vertical hierarchical organizational structures where working groups are formed based on the functions performed. For example, accounting and budgeting tasks are grouped together under the Business Department. This type of structure promotes functional efficiency, but can hinder communication and workflow between other departments. Horizontal hierarchical structures, on the other hand, encourage more collaborative environments with a greater focus on process than specific functions. Smaller school districts use a combination of both structures in which senior managers oversee multiple departments; however, this type of structure necessitates stronger internal control procedures to prevent management from overriding internal controls. The district should be staffed according to the basic theories of organizational structure used in other school agencies of similar size and type. The most common of these theories are span of control; chain of command; and line and staff authority. Span of Control Span of control refers to the number of subordinates reporting directly to a supervisor. While there is no agreed upon ideal number of subordinates for span of control, the span can be larger at lower levels of an organization than at higher levels since subordinates at lower levels typically perform more routine duties, and therefore can be more effectively supervised. Chain of Command Chain of command refers to the flow of authority within an organization. Chain of command is characterized by two guiding principles. The first is unity of command, where a subordinate is only accountable to one supervisor. The second is the scalar principle, where subordinates at every level within the organization follow the chain of command and only communicate through their immediate supervisor. As a result, a hierarchical division of labor is established in the orga- nization. Line and Staff Authority The organizational structure of local school agencies reflects both line and staff authority. Line authority is the relationship between supervisors and subordinates, and refers to the direct line in the chain of command. For example, the district superintendent has direct line authority over the chief business officer and the chief business officer has direct line authority over the business office and so on. Conversely, staff authority is advisory in nature. Staff personnel do not have the authority to make and implement policy decisions. Rather, they act in support roles to line personnel. Rescue union school DistRict 6 STAFFING AND ORGANIZATIONAL STRUCTURE Organizational Chart The district operates several auxiliary departments that provide student transportation; food services; maintenance, operations and facilities services. Central office services provide support for the district’s overall administration, including the superintendent’s office; business services, which includes accounting, budget, and payroll; human resources; curriculum and technology support. During the last four fiscal years, the district made several staffing reductions at the district office. These staffing adjustments for the district office and auxiliary departments include the following: Department Reductions Additions 1.0 FTE Assistant Superintendent, Curriculum & Instruction Curriculum & Instruction FTE Administrative Assistant, Curriculum & Instruction Human Resources 1.0 FTE Director, Human Resources Business Department FTE Budget Technician * Superintendent/District Office 0.5 FTE District Receptionist/Clerk 0.5 FTE Personnel Clerk 1.0 FTE Facilities Director 0.5 FTE Facilities Accountant * 1.0 FTE Director Facilities, Maintenance Maintenance & Operations 1.0 FTE Maintenance & Operations Coordinator & Operations, Transportation 2.25 FTE Custodians 1.0 FTE Transportation Director 1.0 FTE Transportation Support Secretary Transportation Department 1.0 FTE Dispatch/Relief Driver 1.10 FTE Mechanic ** 3.7 FTE Bus Drivers Food Services 0.25 FTE Director, Food Services 0.125 FTE Support Secretary, Food Services Technology Department had no reductions or additions. * Position vacant and unfilled since 2009 per board. **1.0 FTE position was eliminated and the second position had a reduction from 260 to 240 days per year. Personal Services Contracts – Classified School Employees Senate Bill 1419, which became Education Code (EC) 45103.1(a)(b), has been in effect since January 1, 2003 and limits the flexibility of school agencies to choose between using permanent classified employees or contracting the services to private companies. Before the passage of SB 1419, school agencies could contract for services without consideration of in-house labor. In accordance with this law, personal services contracts are prohibited unless any one of the following exceptions applies: 1. The contract is for new school district functions and the Legislature has specifically mandated or authorized the performance of the work by indepen- dent contractors. 2. The services contracted are not available in the district, cannot be performed satisfactorily by district employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the district. 3. The services are incidental to a contract for the purchase or lease of real or personal property. Fiscal crisis & ManageMent assistance teaM 7 STAFFING AND ORGANIZATIONAL STRUCTURE 4. The policy, administrative, or legal goals and purposes of the district cannot be accomplished with employees selected through the regular or ordinary school district hiring process. 5. The nature of the work is such that the criteria for emergency appointments apply. 6. The contractor will provide equipment, materials, facilities, or support services that could not feasibly be provided by the school district in the loca- tion where the services are to be performed. 7. The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the district’s regular or ordi- nary hiring process would frustrate their very purpose. Section 45103.1(a) specifically identifies additional exceptions that may apply in cases where the district can identify cost savings. Section 45103 does not apply to management or supervisory contracts for services. The district is encouraged to negotiate with other local school districts for joint service arrangements for the management of transportation, facilities and maintenance departments. The following charts depict FCMAT’s proposed organizational structure. It is recommended that the district use these charts as a guideline. Rescue union school DistRict 8 STAFFING AND ORGANIZATIONAL STRUCTURE 1 t r a h C l a n o i t a z i n a g r O d e s o p o r P t c i r t s i D l o o h c S n o i n U e u c s e R Fiscal crisis & ManageMent assistance teaM evitartsinimdA )ETF 5.1( tnatsissA ,rotceriD secruoseR namuH ecivreS dooF noitatropsnarT & 9 STAFFING AND ORGANIZATIONAL STRUCTURE 2 t r a h C l a n o i t a z i n a g r O d e s o p o r P t c i r t s i D l o o h c S n o i n U e u c s e R Rescue union school DistRict ,rotcerid ETF 1 setanimile erutcurts lanoitazinagro siTh* .noitatropsnart dna snoitarepo ,ecnanetniam ,seitilicaf segnahc lareves edam tcirtsid eht ,krowdlefi s’TAMCF reftA tneuqesbuS eht ees esaelP .trahc lanoitazinagro eht ot .gnitsil etelpmoc a rof troper siht fo noitces stnevE 10 Job Descriptions The team reviewed current district job descriptions, and several were for positions that were eliminated, including the following: • Assistant superintendent, instruction • Director, facilities • Director, food services • Director, transportation • Operations supervisor Several job descriptions that reference eliminated positions need to be updated to identity the direct supervisor and current duties and responsibilities. The job description for the bus mechanic should be updated to include a diesel certification. The district is in the process of updating all job descriptions. Recommendations The district should: 1. Update applicable job descriptions to identify the direct supervisor and current duties and responsibilities. 2. Update the job description for the bus mechanic to include a diesel certifica- tion. Fiscal crisis & ManageMent assistance teaM 11 JOB DESCRIPTIONS District Office and Auxiliary Departmental Structure Superintendent’s Office and Curriculum Services The office of the superintendent has 1 full-time equivalent (FTE) administrative assistant, a .5 FTE personnel clerk and the district’s superintendent. The superintendent recently completed his first year with the district in this position, having served as the assistant superintendent for curriculum for the previous six years. In an attempt to create a new director position to oversee the Personnel Department, the superintendent agreed to continue performing the duties and responsibilities of the Curriculum Department in conjunction with his regular duties and respon- sibilities as superintendent, but with no additional administrative assistant. Budget reductions eliminated the full-time administrative assistant that previously reported to the assistant superintendent of curriculum and instruction position, shifting the entire workload to the superintendent’s administrative assistant. The reduction in staffing and additional respon- sibilities for curriculum services have greatly affected this administrative assistant’s workload. The district should consider realigning the workload or providing temporary staffing to support this critical function. Business Services The business services division has the following positions: • 1 FTE chief business official (CBO) • .5 FTE accountant • 1 FTE accounts payable • 2 FTE payroll technicians The CBO retired from the district on June 30, 2012. This position has assumed many different functions over time as vacancies have occurred in the business office because of budget cuts. The departure of a CBO who served the district for 15 years will require a significant adjust- ment. According to the superintendent, the CBO was knowledgeable and was responsible for budgeting, accounting, position control, payroll and food services. A portion of the position control work was transferred to human resources during the last fiscal year, and management of the Transportation Department was transferred to the director, facilities, maintenance and opera- tions in the 2009-10 school year. The budget technician position has been vacant since November 2009. Pending board approval, the district will fill the vacancy for the 2012-13 fiscal year. During fieldwork, FCMAT observed that many functions previously performed by this position are lacking. Examples include the following: • Maintaining the position control system. • Communicating on the budget between the Business and Human Resources departments. • Sharing the functions of budget development and budget monitoring with the CBO, which is a function of adequate internal control. Rescue union school DistRict 12 Of particular concern is the maintenance of position control that drives a majority of the district’s budget. This function has been assigned to a human resources technician that has not been adequately trained and does not possess the technical background in budget and/or payroll to perform this duty accurately. As a result, the position control module is unreliable until the records are audited and reconciled with the payroll and budget components. It would be beneficial to reinstate the budget technician position and separate the functions of position control as discussed later in this report. The district has a cooperative arrangement of shared services with the Buckeye School District. According to the district, this arrangement provides efficiency and works well. The district shares the cost of Buckeye’s director of food services, which includes oversight and fiscal accountability. Personnel Services The Human Resources Department has one full-time director, .5 FTE personnel clerk and one personnel technician. The director position was created at the beginning of the 2011-12 fiscal year. Before its creation, the duties and responsibilities of administering human resources were divided between the superintendent and CBO. The director worked diligently in her first year to establish a department framework that includes procedures and protocols for hiring, investigations for uniform complaint procedures, written guidelines and other standard operating procedures with the support of the county office of education. The director’s priorities include responding to employee needs and questions; handling negotiations and grievances; performing basic administrative duties, and improving morale by coordinating a districtwide employee meeting three times a year. Although these activities are important, the director needs to be more involved in helping the superintendent and governing board make recommendations for appropriate staffing requirements throughout the organization as the district continues to make personnel adjustments commensurate with state funding cuts. The personnel technician and clerk provide a variety of services. Of particular concern are processing personnel action forms, absence tracking for employees, and interacting with position control. Personnel Action Forms Subsequent to board approval, personnel action forms (PAF) originate with the manager requesting a new or replacement position. Once completed by the manager, the form is sent to human resources for recruitment and hiring. Subsequent to hiring, it is sent to the CBO to verify budget availability. It would be more efficient for the PAF to be sent to the CBO for budget approval before recruitment and hiring to ensure budget availability. Absence Tracking Absence tracking for district employees involves entering more than 400 manual forms from employees throughout the district and verifying that each employee has submitted a form for the month. Commonly called positive attendance, employees verify daily attendance and use an absence request form for planned absences. This process is time consuming and an inefficient use of time for the personnel office. The district should research attendance tracking software to automate the process and realize the benefits of these systems, including eliminating paper Fiscal crisis & ManageMent assistance teaM 13 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE time records, increasing accuracy, gaining the ability to control extra time and overtime, and increasing district office productivity. In addition to absence tracking at the district level, the personnel staff compiles a monthly leave report for each site and department. This report provides sick leave and vacation balances for each employee to help principals and managers monitor leave balances. The district uses Quintessential School System (QSS) software for financial reporting and position control. The district should investigate the reports available from the QSS that can provide employee leave balances by location. Position Control Employee salary and benefit costs are the single largest expenditure of a school district’s budget. Accurately projecting these costs requires a reliable position control system to prevent over- staffing. For position control to be fully functional, the system should be integrated with other financial modules such as payroll and budget. Position control functions should be separated between the Human Resources and Business departments to provide assurance of the following: 1. Only board-authorized positions are entered into the system. 2. Human resources hires employees that were authorized by the board. 3. The payroll staff pays only employees hired by personnel and approved by the board. Proper separation of duties is a key factor in creating strong internal controls and a reliable position control system. Internal controls help ensure efficient operations, reliable financial infor- mation and legal compliance. A strong internal control system helps protect the district from material weaknesses, serious errors and fraud. The Human Resources and Business departments are key areas where strong internal control systems must be implemented to initiate, approve and execute board-approved decisions. The following table provides a suggested distribution of labor between the Human Resources and Business departments that maintains a high level of internal control: Assignment Accountability Position authorization Governing Board Enter board-authorized positions into position control with estimated sal- ary and benefits. Business Department Input demographic data: Employee name, address, Social Security number, credential, classification, salary schedule placement and annual review infor- mation Human Resources Update salary schedules, work calendars and employees benefits. Business Department Budget development, multiyear projections, salary projections and account code information. Business Department Before the 2011-12 fiscal year, the CBO initiated and updated information in position control. During the last fiscal year, several position control functions were transferred to the Human Resources Department, including maintaining salary schedules and work calendars and rolling positions from one fiscal year to the next. Training was provided for the personnel technician. Interviews with the personnel technician indicate that the training to date has been insufficient, and the technician’s understanding of the scope and purpose of position control is incomplete. It is highly recommended that the district re-evaluate and separate the functions of position control between human resources and the business department. In addition, comprehensive training and Rescue union school DistRict 14 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE support are critical to ensure that the information produced for budget development, multiyear projections and payroll is reliable and accurate. Technology The district has a director of media and technology, two computer technicians and .5 FTE cler- ical support to oversee the technology, library media and network. The director provides support to seven library media coordinators at each school site, but does not manage these employees. The director has more than 12 years of experience in the district and recently installed a virtual desktop infrastructure pilot program at one site for testing and evaluation. This system utilizes dummy terminals that connect to one computer and site server. The server can host several dummy terminals and can be accessed remotely by the Technology Department through an iPhone application from any location to perform troubleshooting. It is expected that the district will realize substantial savings in hardware by installing dummy terminals instead of purchasing student computers. The department has difficulty keeping up with new technology, the demand for technology support services, and the additional reporting requirements for the California Longitudinal Pupil Achievement Data System (CalPADS), student attendance system module upgrades, the creation of user accounts and district network security and management. Pending board approval, the district proposes to create a 1.0 FTE computer technology position. Augmenting the department staffing to include a full-time data support position would help provide the necessary support for these issues. Maintenance, Grounds and Custodial The district currently employs a full-time director who is solely responsible for facilities, mainte- nance, operations and transportation functions. As of June 30, 2012, the director position is vacant. The director’s expertise is in facilities planning and construction, and to a lesser degree main- tenance and operations. Managing transportation, maintenance, operations and grounds was added to the director’s responsibilities two years ago when the district eliminated the transporta- tion director and maintenance and operations coordinator through budget reductions. A cursory review of other school districts of similar size and structure indicates that having one individual responsible for all of these four divisions is not in alignment with the principle of span of control. In accordance with the management principles of span of control and chain of command, the district’s maintenance, grounds and custodial operations should be overseen by a director of maintenance, grounds and operations. Each discipline ideally should be supervised by a line supervisor who reports directly to the director. Alternately, the district could use nonmanage- ment employees or leads instead of line supervisors. Several districts have successfully used this approach to carry out many duties excluding evaluation, which would be delegated to a manager or supervisor. School facilities construction has slowed in recent years, and the district has no active construc- tion or modernization projects except a proposed school site acquisition. However, the district periodically is required to comply with several regulatory agency reporting requirements including those dealing with wetlands and naturally occurring asbestos. Although the district’s facilities are in good condition, they will require ongoing maintenance to preserve the district’s investment in its capital facilities. As a result, it would be appropriate for the district to shift its focus from construction and modernization to school safety projects as authorized under the remaining general obligation bond proceeds. Fiscal crisis & ManageMent assistance teaM 15 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE The district has a shared services arrangement with the Buckeye Union School District for food service management, and it may be feasible to reach a similar arrangement in facilities manage- ment. Buckeye Union has a skilled director of facilities who is supported at the district by a supervisor of maintenance and operations. Given the proximity to the district and organizational structure, Buckeye Union’s director of facilities may be able to allocate a portion of his time to oversee the facilities management function (i.e. facilities, maintenance and operations) of Rescue Union without adversely affecting Buckeye’s operations. Maintenance The district employs three highly qualified maintenance lead workers who provide a variety of skilled trade specialties for more than 344,000 square feet of buildings at seven school sites as well as other auxiliary service facilities including the Transportation Department, district office and Maintenance Department. Included in the Maintenance Department are two utility workers devoted to grounds maintenance and a .5 FTE retired utility worker on a special “work for benefits” program. Grounds workers are covered in the next section of this report. Each lead is crossed trained in various building trades. The Maintenance Department has a proven record of managing its workload. Ideally, a district the size of Rescue Union should have seven maintenance workers, five of them trade specialists. The recommended trade specialties include the following: • 1 FTE plumber • 1 FTE electrician • 1 FTE locksmith • 1 FTE heating and air conditioning technician • 1 FTE painter The remaining two positions should be general maintenance workers capable of performing a variety of maintenance tasks. Based on the skill level of the district’s three lead maintenance workers, staffing is sufficient to preserve the investment in its capital facilities. Grounds As of July 1, 2012, the district employs two utility technicians to maintain more than 83 acres of grounds. These utility technicians maintain the schools’ interior courtyards, including hedging and hand mowing, and mowing the playing fields at each site. The two utility technicians work effectively as a team, but they are hampered by limited manpower and the increased use of the playing fields by community groups during nonschool hours. Success in grounds management largely depends on unpredictable circumstances such as weather, and the vulnerability of plants and pests. It also depends on well-trained personnel with skills in a variety of areas who can maintain educational facility grounds in a visually appealing and environmentally sensitive manner. Like other maintenance and operations functions, staffing for grounds-related services tends to vary among school districts throughout the state. The most common factors affecting staffing levels for grounds crews at individual schools include the following: Rescue union school DistRict 16 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE • The school size in acreage • The number and types of outdoor spaces to be maintained • The type and extent of natural and hardscape features • The extent to which grounds crews perform unrelated tasks The California Association of School Business Officials (CASBO) does not have a formula for grounds maintenance staffing; however, the Florida Department of Education has performed extensive research in this area and included its findings in a document entitled “Maintenance and Operations Administrative Guidelines for School Districts and Community Colleges.” Among other things, the document establishes a formula for the staffing of school district grounds maintenance personnel. This formula is based on two types of grounds personnel: those who perform general grounds functions such as mowing, gardening, and trimming, and those who care for athletic fields or other specialized open space areas. In many school districts, general grounds functions are performed by school custodians while large open areas and athletic fields are maintained by district grounds crews. At smaller school districts, it is more typical for a single crew to provide all required grounds services for the facilities. The recommended formula for determining the number of specialized groundskeepers and athletic field groundskeepers is the total acreage of the school facility divided by 40, plus 1 FTE groundskeeper, plus 1 FTE groundskeeper per 500,000 square feet of athletic fields. FCMAT could not determine the precise measurements of the amount of grounds allocated to play fields at each school site. However, information provided by the district indicates that each site exceeds the minimum standard 67,600 square feet as recommended by the California Department of Education (CDE) in its Guide to School Site Analysis and Development. Therefore, by using this formula and applying the minimum amount of square footage of play fields required at each site using CDE guidelines, FCMAT calculates that the district should have 4 FTE to be adequately staffed. Under current budget constraints, it may not be possible to increase staff. However, the calculation is as follows: Rescue Union School District Grounds Staffing Formula Type District Totals Divisor Grounds Staffing - FTE District Acreage 83.29 40 2.08 Total Square Feet - Athletic Fields 473,200 500,000 0.9446 Other District Facilities ---- --- 1.0 Total Staffing Requirements – in tenths 4.0 Operations (Custodial) The district employed 17 full-time equivalent custodians, but this number was reduced to 14 effective July 1, 2012. Each site is staffed with a full-time day (or lead custodian) and full-time night custodian. Each site has a part-time night custodian who works from two to eight hours per day depending on the enrollment at the school site. District custodians work under shared management. The director of facilities, maintenance, operations and transportation and individual school principals participate in establishing work priorities and duties to be performed by the staff each day. This model enables principals to Fiscal crisis & ManageMent assistance teaM 17 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE retain supervision over custodians, while the director at the district level provides technical assis- tance, equipment, supplies, and other support services. For this model to be viable, school site and district administrators must have a clear understanding of their individual roles and respon- sibilities and communicate effectively with each other regarding their expectations of custodial staff. Since custodial functions are essential to the physical plant’s operation, the administration should do the following: • Ensure that facilities are safe, clean, orderly, and attractive. • Create educational environments that are well maintained, enhance learning, reflect the value of public education and preserve capital investments. • Ensure that general housekeeping and other support functions are performed as needed. • Foster a sense of professionalism and pride among the custodial staff. Determining the number of custodial staff positions is often difficult. In many cases, staffing levels are based on square footage or cleanable area. As custodial responsibilities and the total amount of cleanable space increase or decrease, an appropriate number of positions should be added or reduced to properly clean school facilities. Although the district may ultimately use a single staffing method or a combination of staffing methods best suited to its needs, the selected approach to custodial staffing should include variables that determine the workforce necessary to provide an expected level of service. The CASBO staffing formula was developed to calculate the number of custodians required to maintain individual school buildings. This formula allocates a person-to-hour ratio for custodial tasks. More commonly used in larger school districts, it is probably the most detailed and comprehensive measure used by operations administrators at educational facilities. The formula requires an initial estimate of custodial staff requirements based on the amount of area contained in different building categories (e.g., permanent school buildings, portables, lockers/showers, etc.) and computing an area that is based on a one-hour time period. The total hourly require- ments are divided by eight, indicating the daily workforce requirements. The district maintains and cleans a significant number of classrooms in relationship to its actual student enrollment. Reducing the number of portable classrooms where feasible would reduce the level of service needed to clean and maintain facilities districtwide. To assess the time needed for a day custodian (one who works at a school site while students are present) the analysis should consider the school site’s needs and the available cleaning time. These time standards allot sufficient time to clean all areas at the school site and reflect the cleaning standards identified in the CASBO Custodial Handbook. Assigning the custodial staff to tasks not assigned in the CASBO formula will result in necessary cleaning being postponed or neglected. The recommended custodial staffing is as follows: • One custodian for every 13 teachers, plus • One custodian for every 325 students, plus • One custodian for every 13 rooms, plus • One custodian for every 18,000 square feet The resulting number should be divided by four to indicate the base number of custodians needed. In addition to the base calculation, districts should add .06 FTE for each elementary Rescue union school DistRict 18 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE school and .25 to each middle school site. Schools of less than 450 students should add .30 FTE to the final calculation. The formula provides the suggested number of custodians to clean and maintain a building, and FCMAT has used the CASBO formula to calculate the necessary staffing for the district’s elemen- tary and middle schools. For the Rescue Union sites, the results are as follows: Small Community Calculated Student Number of Square School Usage Staffing Per School Teacher Enrollment Classrooms Footage Subtotal Adjustment Adjustment Formula Green Valley Elementary 27.00 658 30 46,280 2.25 0.00 0.06 2.3 Jackson Elementary 18.60 424 30 49,237 1.94 0.30 0.06 2.3 Lake Forest Elementary 19.08 495 27 43,127 1.87 0.00 0.06 1.9 Lakeview Elementary 22.61 589 30 49,638 2.15 0.00 0.06 2.2 Marina Village MS 35.78 795 32 55,940 2.69 0.00 0.25 2.9 Pleasant Grove MS 30.00 628 33 53,480 2.44 0.00 0.25 2.7 Rescue Elementary 17.43 400 31 46,417 1.88 0.30 0.06 2.2 Grand Total 170.5 3,989 213 344,119 15.2 0.6 0.8 16.6 The formula indicates that the district needs 16.6 full-time equivalent (FTE) custodians. The recent agreement between the district and the California School Employees Association states that three night custodial positions will be eliminated as of June 30, 2012, accounting for a 18% staffing reduction. Therefore, the district was projected to have 14 custodians effective July 1, 2012. Under current budget constraints, it may not be possible to increase staff. However, the district should be aware of the staffing shortage per the formula. The CASBO standards should be used as guidelines. Fiscal crisis & ManageMent assistance teaM 19 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE Transportation Department The district’s Transportation Department consists of eight bus drivers, one full-time driver trainer, one mechanic, and one dispatcher/relief driver supervised by the director of facilities, maintenance, operations and transportation. Bus routes are bid on using seniority according to the collective bargaining agreement. Most drivers have five hour routes with the longest route being seven hours. 2010 Comp Hours Overtime Hours Extra Duty Hours July 0 7 113.5 August 0 88 71.75 September 7.5 81.25 119.5 October 1.25 71.25 74 November 2 38.25 173 December 0 21.5 61 Totals 10.75 307.25 612.75 2011 Comp Hours Overtime Hours Extra Duty Hours January 2 27 69.25 February 5.5 44.5 90 March 13.25 57.75 130.5 April 39.5 49.75 82.25 May 10.75 122 122.25 June 0 0 194.75 July 0 0 14.25 August 0 35.75 26.25 September 0 75.75 72.75 October 0 51.25 84.25 November 14 26.25 76.5 December 0 24.5 28 Totals 85 514.5 991 2012 Comp Hours Overtime Hours Extra Duty Hours January 1.5 10.75 32 February 8.25 26 36.75 March 4.25 43.75 77.75 April 0 0 25.75 May 0 1.5 11.75 Totals - Partial Year 14 82 184 Grand Totals - 22 months 109.75 903.75 1787.75 The Transportation Department suffers from a general lack of accountability regarding the accrual of overtime and compensatory time. Many department employees have accrued excessive amounts of overtime and compensatory time. The department lacks best practices regarding absence tracking and written policies that limit the number of days or hours that employees may accrue for compensatory time. The previous table shows that employees earned 2,801.25 hours of compensatory time, overtime and extra time during a 23-month period. A time clock Rescue union school DistRict 20 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE for drivers and driver/trainers would help the district more effectively track employee time and increase accountability. Home-to-School Transportation Transportation Fees The department uses a parent pay system in which the parents of students are charged for home-to-school transportation. Completed parent pay applications are accepted at the district’s Maintenance, Operation, Transportation and Facilities Department. However, the current fee schedule is not posted on the Transportation Department’s website and is not easily accessible. According to Education Code Section 39807.5, the governing board of any school district that provides home-to-school transportation may require all or some of the parents and guardians to pay a portion of the transportation costs. The rate established by the governing board cannot be greater than the statewide average nonsubsidized cost of providing this transportation to a pupil on a publicly owned or operated transit system. The current maximum allowable rates below are expressed on a cost-per-passenger-trip basis: Cost per passenger trip $4.41 Daily round-trip cost $8.82 School districts have had varying success in implementing parent pay transportation programs. However, there are at least two important considerations. The first is that parent pay fees plus the district’s state home-to-school transportation apportionment cannot exceed the district’s approved home-to-school transportation expense on an annual basis. The second is estimating the amount of ridership that will be exempt from the fees on the basis of poverty level of the students. Poverty is generally measured using free and reduced-price lunch program guidelines and/or proof of receipt of Temporary Assistance to Needy Families (TANF). The district’s transportation fee schedule is as follows: Service Level Family Rate Individual Rate Other Discounted Year Around – Payments received prior to August 11th $413.10 $229.50 Regular Year Around $459.00 $255.00 Three Pay – Round Trip (per year) $85.00/Trimester One-Way AM or PM (per year) $51.00/Trimester Occasional Rider Punch Card $15.00/10 One-Way Rides Must Qualify – Federal Income Free/Reduced Pass Requirement FCMAT’s review of the district’s parent pay program indicates that revenue collection has many complications. Although the district attempts to collect most of the revenue from this program at the beginning of each trimester, bus drivers are asked to collect money throughout the year without procedures to safeguard the handling of cash or make a full accounting of revenues to ridership records. Moreover, the district allows students to purchase punch cards for $15. Each punch card authorizes 10 one-way rides. Drivers are responsible for punching the card, but this is problematic when students forget to present the card to the driver. In this case, a substitute driver has no way of knowing how many times a punch card was used, and some students may receive home-to-school transportation for more than 10 rides using the same punch card. Interviews Fiscal crisis & ManageMent assistance teaM 21 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE with regular bus drivers indicate that punch-card use is cumbersome and inefficient in relation- ship to the amount of revenue generated. The district should determine the amount of revenue generated with this system and decide whether the system should be discontinued. Additionally, the district should evaluate the cash handling procedures and encourage parents to use the online payment option for transportation fee collections to ensure full accountability and effective cash handling controls. Driver Training An essential component of any school transportation program is a qualified driver trainer. Trainers are responsible for documenting and maintaining records in accordance with existing laws and regulations. Driver trainers are typically involved in recruiting and retaining bus drivers. The district has one full-time driver trainer who provides little training and spends most of her time driving a bus, attending meetings, or performing clerical tasks. The driver trainer indicated during FCMAT’s fieldwork that she has not performed ride-along checks in at least the last two years. Best practices are for a minimum of one ride check to be performed annually by a state- certified school-bus instructor or a designated behind-the-wheel trainer. This is typically part of the drivers’ annual performance review grading that is required under California Code of Regulations, Title 13. The driver trainer attends monthly meetings at the county office as part of a countywide program. The driver trainer should spend this time performing the duties and responsibilities directly attributable to her position. The fact that the district’s driver trainer provides little to no classroom or behind-the-wheel instruction to drivers is cause for concern. Education Code Section 40085 requires drivers to complete 10 hours of original or renewal classroom instruction or behind-the-wheel training each 12 months of certificate validity to renew their licenses. During the last 12 months of the special driver certificate validity, the 10 hours are required to consist of classroom instruction covering current laws and regulations, defensive driving, accident prevention, emergency procedures, and passenger loading and unloading. Education Code Section 40085 further states that failure to successfully complete the required training, in any 12-month period of certificate validity is cause for the Department of Motor Vehicles to cancel the school bus certificate. Because neither the driver trainer nor the department director has traveled each school bus route, it is impossible to determine whether these routes are adequately established and do not include excess time. Bus driver interviews confirmed that bus routes have not been verified in more than six years. The routes are prepared manually, and field trips are routed using Google Maps. Routing Methodology The district has a full-time driver trainer and a relief driver/dispatcher who manually develop bus routes, which are often completed just before school starts. Most school districts use an automated routing system to improve bus route efficiency and reduce inefficient practices. A routing software program can plot the district’s student population and allow the staff to create transportation eligibility by school attendance area. These types of programs can be used to identify eligible student population and correlate eligibility for transpor- tation services. Rescue union school DistRict 22 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE The sophisticated global positioning systems (GPS) employed by many school transportation departments can pinpoint and record vehicle stops, speeds, travel routes, excessive idling in addi- tion to pre- and post-trip electronic vehicle inspection and compliance information. The district should explore the use of computerized software programs that can reduce costs by increasing the bus routing efficiency and determining student eligibility. School Bus Maintenance The district has one mechanic to perform maintenance on the district’s bus fleet. The mechanic is not diesel-certified and lacks previous school bus maintenance experience. Although the district has routinely passed the most recent California Highway Patrol (CHP) terminal inspections, some bus drivers indicated that regular maintenance is not performed on the buses, and break- downs in the field are common. Observations indicate that the Transportation Department does not comply with industry standards for school bus maintenance. The district was given specific examples of inadequate bus maintenance.The district should have an immediate inspection of all airbrake slack adjustors to ensure they are within legal adjustments. A diesel-certified mechanic should be required to perform school bus maintenance. The district has a shared services arrangement with the Buckeye Union School District for food service management. Cooperative contracting for transportation between districts is common and may include vehicle maintenance, safety and training instruction and management. Given the lack accountability with the department, the district should seriously consider forming a partnership with Buckeye Union to manage the district’s transportation program. For this partnership to be viable, Buckeye will need to assess its resources to meet the needs of its own students and those of the contracting district. This may involve discussing and establishing bell schedules that allow the providing district the flexibility to contain cost while using existing resources. Recommendations The district should: 1. Consider realigning the workload or providing temporary staffing to support the administrative assistant to the superintendent. 2. Reinstate the budget technician position, and separate the functions of posi- tion control. 3. Send personnel action forms to the CBO for budget approval before recruit- ment and hiring to ensure budget availability. 4. Research employee attendance tracking software to automate the process and realize the benefits that include eliminating paper time records, increased accuracy, ability to control extra and overtime, and increased productivity at the district office level. 5. Investigate the reports available from the QSS that could provide employee leave balances by location. Fiscal crisis & ManageMent assistance teaM 23 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE 6. Re-evaluate and separate the functions of position control between the Human Resources and the Business departments. 7. Provide the staff members involved with position control with the compre- hensive training and support necessary to ensure that the information produced for budget development, multiyear projections and payroll is reli- able and accurate. 8. Involve the director of human resources to a greater degree in helping the superintendent and governing board make recommendations for appropriate staffing requirements throughout the organization. 9. Augment the Technology Department staffing to include a full-time data support position. 10. Consider the CASBO custodial staffing formula, as amended, as a general guideline for adding or reducing custodial personnel. 11. Consider the Florida DOE grounds maintenance staffing formula, as amended, or other available examples as a general guideline for adding or reducing grounds maintenance personnel. 12. Explore the feasibility of a shared management services agreement with the Buckeye Union School District to provide facilities management services with an emphasis on maintenance and operations. 13. Ensure the driver trainer spends that position’s time performing the duties and responsibilities directly attributable to her position. 14. Explore the use of computerized software programs that can reduce costs by increasing the efficiency of bus routing and identifying student eligibility. 15. Encourage parents to use the online payment option for transportation fee collections to ensure full accountability and effective cash handling controls. 16. Immediately inspect all bus airbrake slack adjustors to ensure they are within legal adjustments. The fact that the buses must be allowed to park so the brakes can cool is a potentially serious safety issue. 17. Require a diesel certified mechanic to perform school bus maintenance. 19. Consider forming a partnership with the Buckeye Union School District to manage the district’s transportation program. 20. Explore the use of time clock for drivers and driver/trainers to better track employee time and increase accountability for drivers and ensure proper budget authority. Rescue union school DistRict 24 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE Comparative Districts Comparative information should be viewed as a useful guideline for appropriate staffing levels but take into account that California school districts are complex systems that vary widely in demographics, resources, and organization. Interpreting staffing needs based on one or two criteria can be misleading if significant circumstances are not considered. Instead, the compara- tive data should be used with the formulas provided in this report to determine the staffing levels appropriate for the district’s unique characteristics. The six comparative districts were selected using the Ed-Data Web site feature, based on the most recent available data from 2010-11. The districts selected possess characteristics similar to Rescue Union, including enrollment, the approximate number of school sites, and the revenue limit per average daily attendance. The six school districts used for comparative purposes are as follows: • Santa Paula Elementary School District (Ventura County) • Buckeye Union School District (El Dorado County) • Burton Elementary School District (Tulare County) • Galt Joint Union Elementary School District (Sacramento County) • Moreland Elementary School District (Santa Clara County) • Cypress School District (Orange County) FCMAT prepared a staffing and organization structure questionnaire and forwarded it to the six districts electronically. Four of the six districts responded. In addition to gathering quantitative data, the team received qualitative data from these districts on how they respond to the effects of diminishing revenues over the last four years. The following two tables represent the results from the survey respondents: Number of Number of Middle Number of Maintenance Personnel Number of FTE Elementary Sites School Sites Performing Specialty Trades Custodians 5 1 0 15 6 2 0 20.39 5 1 1 18 5 1 2 16.78 Fiscal crisis & ManageMent assistance teaM 25 DISTRICT OFFICE AND AUXILIARY DEPARTMENT STRUCTURE Organizational Which Structure for Department Maintenance, Manages Operations and Staffing for the Human Position Grounds Staffing for the Business Office Resources Department Control 1.0 FTE CBO 1.0 FTE Budget Technician 1.0 FTE Accounts Receivable Technician CBO supervises. 2.0 FTE Payroll The district provides 16 hours 1.0 FTE Accounts Payable at each elementary and 24 1.0 FTE Warehouse Delivery hours at each middle school 1.0 FTE Administrative Secretary 1.0 FTE Personnel technician CBO and Budget site. 1.0 Operations Administrative Assistant 1.0 FTE Credentials clerk technician 1.0 FTE Assistant Superintendent of Business and Personnel 1.0 FTE Director of Fiscal Services 2.5 FTE Assistant Accountant 1.0 FTE Director of Facilities 0.5 FTE Accountant II 1.0 FTE Supervisor of 1.25 FTE Accountant 2.0 FTE Administrative Assistant, Human Maintenance & Operations 1.0 FTE Payroll Personnel Resources 1.0 FTE Assistant Superintendent of Business 1.0 Director of Fiscal Services & Transportation 1.0 FTE Assistant Superintendent of 1.0 FTE Director of 1.0 FTE Payroll Personnel Maintenance, Operations 2.0 FTE Accounts Payable 2.0 FTE Personnel Technicians and IT 1.0 FTE Purchasing 1.0 FTE Receptionist/Office 1.0 FTE Lead Custodian 1.0 FTE Administrative Assistant Assistant Business 1.0 FTE Assistant Superintendent of Business 1.0 FTE Director of Accounting 1.0 FTE. Account Analyst 1.0 FTE Director of Personnel Director of Maintenance & 1.0 Accounts Payable 1.0 FTE Personnel Analyst Human Operations 1.0 Payroll Analyst 0.75 FTE Clerical Resources A review of the data indicates that employees, including management, increasingly accomplish more tasks with diminishing resources. At several districts, director-level employees supervise three to four operational areas, such as maintenance, operations, grounds, facilities and informa- tion technology. The survey results also show that chief business officials participate to a greater extent in the area of human resources as well as other support departments. When a management employee’s span of control is substantially increased without additional resources to support the workload (e.g. line supervisors) effectiveness may be diminished. The district should ensure that key management employees have an appropriate span of control. The survey also demonstrates that the function of position control is equally divided in these districts between the business office and human resources. To provide proper internal controls, and ensure an adequate segregation of duties, the elements of the position control function should be divided between the two offices. The business office should be responsible for the budget approval before positions are created or replaced. Human resources should be responsible for recruiting, selecting and retaining employees who are to be placed in authorized positions and for granting payroll the authority to pay employees who are in approved budgeted positions. Strong internal controls in this area safeguard the district from having nonexistent or “phantom employees” in the system and from experiencing abuses of the personnel/payroll process. Rescue union school DistRict 26 Recommendation The district should: 1. Ensure that key management employees have an appropriate span of control that does not diminish their ability to effectively manage multiple depart- ments. Fiscal crisis & ManageMent assistance teaM 27 COMPARATIVE DISTRICTS Finance The most recent review of the district’s financial condition is based on the 2011-12 second interim budget report. The El Dorado County Office of Education issued a letter dated April 15, 2012 which concluded the following: • The county office estimates that Rescue Union lost approximately $5.1 million from the 2011-12 deficit on a revenue limit of 19.75% plus the mid-year trigger of 0.85%. • The district is deficit spending (current expenditures exceed current revenues); however, it will meet the minimum reserve levels of 3% for the current and subsequent two fiscal years. • Negotiations for the 2011-12 year for certificated and classified personnel are settled. • The district is experiencing declining enrollment and since 2010-11, has realized a funding loss of $132,000, and $450,000 in 2012-13 based on the prior-year enrollment calculation. • Reserve levels for the general fund are 19.7%, higher than the required 3%. • Cash flow has been greatly affected by the state’s reduced funding levels and cash deferrals; however, the second interim report demonstrates a positive cash balance for each month. • Multiyear projections include no cost-of-living increase in 2012-13 and 2013-14 with a deficit of 19.754% each year. The projected budget for 2012-13 assumes that the governor’s tax initiative fails, additional cuts of $370 per ADA are implemented, and a loss of all transportation funding yet continues to maintain the required reserve levels. The bar chart and table below illustrate the funding loss per ADA. Based on the differential between the “projected statutory” cost of living adjustment and actual funding after deficit, the district antici- pates a funding loss of $1,423 per ADA for the 2012-13 fiscal year before a possible mid-year cut. Funding per ADA, Actual vs Statutory Level $6,500 - Projected Statutory COLA $6,000 $5,500 - Actual Funding $5,000 - Midyear Cut $4,500 $4,000 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Projected Statutory COLA Actual Funding 2007-08 $5,522 $5,522 2008-09 $5,837 $5,379 2009-10 $6,087 $4,970 2010-11 $6,063 $4,974 2012-13 $6,200 $4,923 2103-14 $6,398 $4,975 * *$4,605 after mid-year cut Rescue union school DistRict 28 COMPARATIVE DISTRICTS In summary, the district has maintained fiscal solvency during a time of volatile and significantly reduced funding for public education. For the fifth consecutive fiscal year, the adopted state budget is predicated on unknown variables outside the district’s control. Continued budget reductions and cash deferrals have placed many school agencies in a difficult financial position. Although Rescue Union has sufficient reserves as shown in the 2011-12 second interim budget report, the district is in declining enrollment and is deficit spending. The district should continue to monitor multiyear budget projections and implement adjustments as necessary because many of the variables have changed considerably since the county office letter dated April 15, 2012. The following line graph and table illustrate the decline in fund balance and the projected fund balance for the subsequent two fiscal years. Ending Fund Balance in Millions $8 $7 $6 $5 $4 $3 $2 $1 $0 $-1 $-2 Actual Actual Actual Projection Projection Projection Projection 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Ending Fund Balance in Millions 2008-09 $4.147 2009-10 $5.108 2010-11 $6.441 2012-13 $3.695 2103-14 $1.308 2014-15 ($1.760) Fiscal crisis & ManageMent assistance teaM 29 COMPARATIVE DISTRICTS Subsequent Events The district is in the process, and in some instances has implemented several of FCMAT’s recom- mendations listed through this report, including: 1. Hired a new CBO. 2. Hired a 0.5 FTE budget technician. 3. Hired a 1.0 FTE computer technician. 4. Entered into a joint services arrangement with Buckeye Union School District for transportation management. 5. Evaluated a joint services arrangement with Buckeye Union School District for facilities management, which was not a viable solution for either district. 6. Hired a 1.0 FTE director of facilities. 7. Increased support services from 0.8 to 1.0 FTE to relieve the superintendent’s administrative secretary of categorical grants. 8. Reduced overtime and extra time in the transportation department. 9. Is in the process of conducting a full inspection of all district school buses. Rescue union school DistRict 30 Fiscal crisis & ManageMent assistance teaM 31 FINANCE Appendix A: Study Agreement Rescue union school DistRict 3322 DARPPAEFNTDICES Fiscal crisis & ManageMent assistance teaM 3333 APPENDDRICAEFST Rescue union school DistRict 3344 DARPPAEFNTDICES Fiscal crisis & ManageMent assistance teaM 3355 APPENDDRICAEFST Rescue union school DistRict 3366 DARPPAEFNTDICES Fiscal crisis & ManageMent assistance teaM