Update as of 7-17-2012.

1. Bargaining Update: Vista Teacher’s Association
July 17, 2012
Collective bargaining is an important process in any school district. In the current context, relationships between
management and labor groups have become strained over time as a result of diminishing financial resources. In Vista
Unified, we have yet to reach an agreement with the Vista Teacher’s Association (VTA) on contract language
adjustments for the 2012-13 year. The intent of this communication is to provide some background and information on
the current context with VTA.
The screenshot below from the VUSD website indicates the dates of previous negotiations (including those with the
classified group CSEA):
Given that fact that an agreement was not reached, Vista Unified School District (VUSD) filed for impasse with the Public
Employment Relations Board (PERB) on May 14, 2012. The first step in the impasse process is for PERB to assign a
mediator that will come and work with the parties with the intent to establish an agreement. Unfortunately the
mediator was unable to schedule dates for the negotiations and VUSD requested that the process be advanced to the
next stage which is called Factfinding. In Factfinding each party identifies a panelist and those two panelists mutually
agree on a third person that is called the “neutral.” At this point the Factfinding panel has been established and the
members are:
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2.  VUSD: Ron Bennett, School Services of California
 VTA: Alva Rivera, California Teacher’s Association
 Neutral: Bonnie Castrey, Panel Chairperson
Right now the Factfinding panel is attempting to establish a date for the hearing. The Factfinding hearing would consist
of brief presentations from VUSD and VTA to the panel and then the panel makes a non-binding recommendation for
resolution. As we have been working to schedule the Fact Finding hearing, both VUSD and VTA agreed to meet and
negotiate on Friday, July 13th. No agreement was reached on that date.
Financial Context: Declining Revenues
As mentioned in the introductory paragraph, reaching an agreement in the current context is complicated by statewide
financial difficulties and uncertainty about the impact of the Governor’s November Tax Initiative as it relates to
educational funding. The primary drivers of revenue for a typical school district in California are the number of students
that attend school (Average Daily Attendance or ADA) and the Base Revenue Limit (BRL) amount that establishes how
much funding is provided for each of those students. Other funding sources, such as federal and state categorical funds,
are typically intended for specific uses and, in many cases, are also restricted to programs and services for particular
students.
In VUSD, the enrollment numbers has dropped by more than 3,100 students over the past ten years.
25,338
25,500
24,864
25,000
24,307
24,500 23,919
24,000 23,458 23,440
23,500 23,148
23,000 22,622 22,467
22,440
22,238
22,500
22,000
21,500
21,000
20,500
Source: CBEDS Enrollment (2012-13 figure is projected)
The picture for the funded BRL also indicates that we have fewer dollars per student now than we did in 2007-08. If the
Governor’s Tax Initiative fails the amount is projected to decline to $4765, a number that is roughly the same as what
was funded back in 2004-05.
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3. The Financial Crisis- Funding Per ADA
Actual Funding Provided to VUSD vs. Statutory Level
$7,000.00
$6,697.61
}
$6,500.00 $6,368.00
$6,486.00
Loss of COLA
$6,343.00
$6,106.00
Dollars Per ADA
$6,000.00 $5,777.00
$5,500.00
$5,627.00
$5,203.00 $5,149.00
$5,205.92
} Loss of
Baseline
Dollars
}
$5,000.00
$4,500.00
$4,946.00
$4,764.92 } Loss due to
mid year
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
(or funding per ADA)
The continued failure of the state to fund education has cause the District to make difficult decisions since the 2007-08 school year.
The loss of COLA and the loss of baseline dollars equates to a $30 million dollar loss to VUSD. If the mid- year cuts are enacted in
November 2012, VUSD will lose an additional $8 million dollars. In the 2012- 2013 school year alone this will result in a loss of up to
$38 million dollars to our District.
Base Revenue Limit Funded Base Revenue Limit Mid Year Cut
Source: School Services of California and VUSD Budget Book-Assumptions
As a result of the combined impact of the decline in ADA and the drop in the funded BRL, VUSD revenues have dropped
precipitously over the past few years. It should be noted that this is not a unique situation—districts across the state are
now in financial distress as a result of the decline in revenues. In May of 2012 State Superintendent of Public Instruction
Tom Torlakson announced a “Record Number of School Districts in Financial Jeopardy.”
Revenue Limit Funding
$140,000,000.00
$120,000,000.00
$100,000,000.00
$80,000,000.00
$60,000,000.00 If the Tax Initiative fails the BRL decline from
07-08 to 12-13 would be 19.7%. If it passes
$40,000,000.00
the decline would be 12.6%
$20,000,000.00
$0.00
12-13
07-08 08-09 09-10 10-11 11-12 12-13 Inititative
Fails
Revenue Limit Funding $132,719,739 $128,885,221 $112,429,958 $115,710,930 $115,650,249 $115,958,554 $106,494,972
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4. It should also be noted that, unlike other industries, local public educational agencies do not have the ability to “raise
prices” unilaterally. The mechanisms for increasing revenue require voter approval and the threshold for passage of
local tax increases is a two-thirds majority for relatively unrestricted funds. No district in San Diego County has ever
passed one of these “parcel taxes.” Proposition 39 requires a 55% majority for facility-related projects but most of the
financial pressure in schools today is in the general fund which typically devotes the majority of its expenses to
employee salaries and benefits.
Governor’s Tax Initiative
Typically the funded Base Revenue Limit is provided to school districts when the state budget is approved. Ideally this
occurs in June and our fiscal year runs July 1-June 30. This year, however, the Governor has a Tax Initiative on the
November ballot and, if that initiative fails we have been told that we can expect to lose an additional $458 per ADA in
the 2012-13 year. The impact to VUSD would be the loss of an additional $9.5 million in revenue each year. Given the
enormity of this potential adjustment, the state would provide districts with the flexibility to reduce the instructional
year by up to 15 additional days in 2012-13 and 2013-14.
Financial Context: Expenditures
Vista Unified provides important services to students, families and to the community. The primary method for providing
these services is to hire people that provide direct instruction to students or support the instructional process by
providing educationally-related services. We serve over 22,000 students and to do so we employ about 1100 teachers,
800 classified staff members, and almost 100 administrators and management employees. Based on most recent
Unaudited Actuals report from 2010-11, 85% of our expenditures were for salaries and benefits to employ these valued
individuals and to compensate them for the work that they do. Of our total expenditures, 56% are devoted to teacher
compensation in the form of salaries or benefits.
General Fund Expenditures, 2012-13
Operating
10% Capital/Other
Books and Supplies 1%
4%
Certificated Non-
Management Salaries
Employee Benefits 43%
23%
Management and
Supervisor Salaries
4% Classified Non-
Management Salaries
15%
Source: VUSD 2012-13 Budget Book
The trend for employee expenses since 2007-08 does show that the projected costs for salaries and benefits in the 2012-
13 year will be less than they were in the past. It should be noted that, in spite of the decline in employee expenses, the
reduction is not proportional to the revenue declines during that same time period.
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5. Employee Salary and Benefit Costs
$180,000,000.00
$160,000,000.00
$140,000,000.00
$120,000,000.00
$100,000,000.00
$80,000,000.00 The projected change in employee expenses
$60,000,000.00 from 07-08 to 12-13 is a decline of 3.9%
$40,000,000.00
$20,000,000.00
$0.00
11-12
12-13
07-08 08-09 09-10 10-11 Projecte
Budget
d
Series1 $168,219, $167,554, $164,479, $150,595, $162,502, $161,638,
Source: VUSD Unaudited Actuals from 2007-2010, 2011-12 and 2012-13 are projections
Reserves
The unfortunate reality is that an organization cannot sustain rising expenditures and declining revenues in perpetuity.
Fortunately, VUSD has funds unspent from previous years—this amount is sometimes called the reserve and other times
referred to as the “Ending Fund Balance”—that helps to minimize the amount of expenditure reductions at the moment.
VUSD is projecting beginning the 2012-13 year with approximately $37.5 million in reserves. Our finance department
has prepared four scenarios to help us plan:
1. No agreement with VTA, Tax Initiative Passes
2. No agreement with VTA, Tax Initiative Fails
3. Agreement with VTA, Tax Initiative Passes
4. Agreement with VTA, Tax Initiative Fails
For these assumptions, we are projecting the financial impact of an agreement based on the proposals that have been
presented by VUSD. The following tables indicate the projected Ending Fund Balance for each of these four scenarios in
the current (12/13) next fiscal year (13/14), and the following (14/15).
2012-13 2013-14 2014-15
No Agreement Tax Initiative Passes $27,031,867 $11,890,056 ($3,498,214)
Tax Initiative Fails $17,568,285 ($6,952,463) ($31,635,015)
Agreement (as Tax Initiative Passes $29,431,867 $20,490,056 $9,201,786
proposed by VUSD) Tax Initiative Fails $26,968,285 $15,647,537 $2,064,985
Source: 2012/13 VUSD Adopted Budget and Proposal from May 10, 2012
Clearly the concern from the VUSD perspective is the potential for rapid depletion of the Ending Fund Balance that could
occur based on the combined impact of a potential failure of the Tax Initiative and implementation of the existing VTA
contract.
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6. The graph below indicates the projected deficit spending if we are unable to reach an agreement with VTA. The
projected deficit spending (even if the Tax Initiative passes) is not sustainable based on current assumptions. Either
expenses will need to be reduced, revenues will need to increase, or some combination of those two will be necessary
to maintain financial balance.
Projected Revenues and Expenditures -
No Agreement
200,000,000
195,000,000
190,000,000
185,000,000
180,000,000
175,000,000
170,000,000
165,000,000
12/13 13/14 14/15
Rev Pass 178,513,569 178,626,645 180,665,350
Rev Fail 169,049,987 169,247,708 171,371,068
Expenditure 189,025,292 193,768,455 196,053,620
Source: VUSD Fiscal Services Department
Even under what may be considered the “best case” scenario—which would be agreement on the VUSD proposals and
successful passage of the Tax Initiative—we still project deficit spending in the each of the next three years. This is why
the projected Ending Fund Balance under this “best case” scenario drops from the current $37.5 million to about $20.5
million by the end of 2013-14 and under $10 million in 2014-15. Absent revenue increases, additional expenditure
reductions would be required to sustain long-term financial balance.
Projected Revenues and Expenditures - With
Agreement and Initiative Pass
200,000,000
195,000,000
190,000,000
185,000,000
180,000,000
175,000,000
170,000,000
165,000,000
12/13 13/14 14/15
Revenue 177,013,569 177,126,645 179,165,350
Expenditure 185,125,292 186,068,455 190,453,620
Source: VUSD Fiscal Services Department
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7. VUSD Proposal
A copy of our most recent proposal to VTA is inserted below as a reference.
It should be clarified that the VUSD proposal on class size would maintain a districtwide average of 29.5 students per
classroom and a schoowide average of 31 students per teacher. Both of these averages are currently in the VTA
contract (Article 20.1). In addition, the California Education Code places limits on the number of students in a class and
fiscal penalties occur if those limits are exceeded. The VUSD proposal would align the VTA contract language with many
other districts in San Diego County.
Next Steps
The Factfinding panel hearing is in the process of being scheduled now. We will continue to provide updates until we
have reached an agreement.
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