The Morning Report
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The San Diego County Office of Education effectively gutted the power of Sweetwater Union High School District’s board of trustees Friday.
The county office, which basically acts as an arm of state government, enacted the power to overturn any of the board’s decisions – known as “stay and rescind” – due to Sweetwater’s ongoing financial crisis. That means county officials no longer have faith in the Sweetwater board’s ability to make the fiscally responsible decisions necessary to steer itself out of its current money problems.
Sweetwater officials have acknowledged they are running a “negative” budget and will end the school year $11 million in the hole. When a local school district runs a negative budget, county officials automatically assume the ability to take stay or rescind power over a district, if they believe it’s necessary.
Until Friday, county officials had refrained from taking control over Sweetwater’s board – even though they could have done it weeks earlier.
But on Monday, Sweetwater’s board of trustees approved an early retirement plan in the face of strong warnings from the county that the plan was fiscally irresponsible. It was the last straw for county officials.
The early retirement plan would save $7 million over this year and next. But county officials believed Sweetwater could obtain the same savings through natural attrition, without making added payouts. County officials also opposed the early retirement plan because it committed Sweetwater to no teacher layoffs this year and next.
Officials from the state Fiscal Crisis and Management Assistance Team also criticized the decision.
“You spend 90 cents of every dollar on people. It will be difficult to solve all of this without touching people, and you have eliminated that as a tool,” Michael Fine, the fiscal crisis team’s chief operating officer told the board at its Monday meeting.
Fine also accused Sweetwater officials of covering up the $30 million budget hole last year to make their financial situation look better than it really was.
Since it came to light that Sweetwater officials overspent by $30 million last year, as first reported by Voice of San Diego, they have consistently sought to minimize the scope of the problem. In a letter to parents and staff Thursday, they referred tens of millions of dollars in cuts in the coming years as the “right sizing” of the district.
The letter also cited fundamental differences of opinion with the county office of education over the early retirement plan. Sweetwater officials told parents they will “continue to ask [the county] to be our partners in this effort.”
Sweetwater officials never chose to partner with the county. The county’s increased role in overseeing Sweetwater’s operations has been mandatory from the start.
Monday was not the first time that Sweetwater officials have heard a report from the state’s fiscal crisis team. They heard a report in 2015 that warned they would either need to cut costs or raise revenue in the future to stay afloat. Instead board trustees gave out across the board 3.75 percent raises.
County officials appointed Mark Skvarna to be a fiscal adviser to the district in November. He will now be instrumental in helping county officials decide whether any of Sweetwater’s upcoming decisions need to be overturned. Skvarna played a similar role recently in Montebello Unified School District, where stay-and-rescind power was also in place.
In a letter to Sweetwater, county officials noted they would stay or rescind “any action by the board that is determined to be inconsistent with the district’s ability to meet its financial obligations.”