MBUTANOW.org

Mike Matthews sent a letter to parents and staff admitting to a 1 million dollar budgeting “mistake”. For two and a half years District administrators have said repeatedly that NO general fund dollars were used to fund the iPad program in MBUSD. They have said that in Board meetings. They have said that in community meetings. They have said that to the media. They have said that in writing. They have said that to us at the negotiating table.

We knew, based on budgetary analysis that this was not true.

We said that at Board meetings. We said that to any community members that were open enough to listen. We said that to the media. We said that at the negotiating table. Most importantly, we said this to the administration before and after we repeatedly requested all budgetary documents related to iPad expenditures.

These requests, the earliest of which goes back to August 2012, were met with silence. We received no documents and were met with every excuse imaginable on why that documentation couldn’t be provided. We took their failure to provide information on the iPad program and other budgetary issues to PERB and our charges were substantiated in the form of a formally issued PERB complaint. However, the District continued to withhold requested information and began a public “spin” campaign claiming that PERB’s recognition of wrongdoing wasn’t that at all.

As the date for the final PERB hearing loomed, we suddenly received some of the requested documentation. We still have not reviewed the material to ascertain that it fully meets our requests. However, the District knew we were now in possession of enough “proof” of budgetary chicanery that they had to act.

Clearly, the District knew that this documentation provided the “smoking gun” that supported our contention that general fund money was used to pay for the iPad program to the detriment of increasing teacher salaries (our salaries are paid out of the general fund). In the newest “damage control” effort, the Superintendent attempted, once again, to spin public deceit and a lack of budgetary transparency as a simple accounting error.

This was no “mistake” by the District. This was business as usual. They took the money for the iPad program out of the general fund just as we said. In doing so, it was either in collusion with the Board of Education (in which case the Board is equally culpable) or the administration willfully deceived the Board (in which case the Board will need to decide the appropriate response).

The District did not voluntarily come forward with this mea culpa. They were forced to reveal the truth since their budgetary cover-up was unraveling in the face of our persistence and an upcoming final judgment by PERB, the results of which would expose their duplicity.

The letter by the Superintendent was simply a calculated yet pathetic attempt to control a situation of his making that is quickly becoming uncontrollable.

The Board of Education has the authority to authorize expenditures.  However, the budgetary manipulations used by those in authority appears to have been for the purpose of denying fair compensation to teachers for salary and benefits by misrepresenting the true budgetary picture to the public and to our own members.

With the upcoming mediation, PERB hearing and our continuing review of provided documents, we can only assume that these budgetary maneuverings represent only the tip of the iceberg.

The MBUTA Executive Board

Despite the passing of Proposition 30 in 2012, the School Board voted to “pink slip” teachers at its March 7, 2013 meeting saying it was necessary in order to balance the budget for 2013-14. They even claimed less state funding for the 2013-14 school year. We now know that total funding increased to $59 million in 2013-14, up from $55.3 million in 2012-2013, according to figures filed with LACOE, and that most of the increase is attributable to additional funds from the state.

While nearly two dozen teachers were losing their jobs inside the building for political instead of economic reasons, negotiations chairman Adam Geczi attempted to explain to the public in an interview with reporter Serene Branson that the District was manipulating its budget and the layoffs were not necessary. He pointed to the Books and Supplies category as a particular area of interest, suggesting that the District was not being truthful about its allocation of funds, effectively hiding money by inflating that category. Blindly commenting on the iPad program, Dr. Michael Matthews inadvertently confirmed this with the reporter. Press play below or click here for audio bite from the newscast. The full video is available here. Soon after, the district “found” $800,000 in Books and Supplies. While the District did not spend the money on books, per Matthews, it may have spent the remaining portions on iPads and related costs. The District has not shared invoices related to these expenses and has to answer to an MBUTA initiated Unfair Labor Practice Charge issued by PERB at an upcoming May 13-15 hearing.

A year later, on March 19, 2014, finance chief, Dr. Rick Bagley unexpectedly exposed the way money is hidden in various line items throughout the budget, including Books and Supplies, during his presentation of the second interim budget report. While discussing funding for professional development, Bagley said ”we put the Common Core dollars into expenditures; we basically parked them as place holders in different places on our… on our expenditure warrants” which they later ”needed to internally adjust by moving some of what [they] have parked under Books and Supplies over to certificated salaries”. Press play below or click here for the audio bite.

The District continues to hide money in Books and Supplies, a larger amount than before. This category was $1.5 million in 2010-11, became a $3.3 million projection to 2013-14 (in 2012) and has ballooned to $3.8 million with about $1.4 million “specified by the donor” for Books and Supplies from Fund 6.  Assuming that ASB and booster monies from MBAF (MBX) are not specified for the purchase of books and supplies directly related to instruction, PTA money once included in Fund 1 is now pulled out and presented as another definitionally restricted item in Fund 6 (normally reported under Fund 1). While this may have been caused by a reporting requirement update (MBUTA has found no evidence of this), the adjustment should have left a gaping hole in Fund 1. Instead of the $1.4 million hole, there appeared a $2.4 million mound of state and federal funds.

All of this leaves open three options. MBUSD is overspending on books and supplies, which Matthews publicly denied; MBUSD increased spending on unknown items such as iPads and related costs, which Matthews also denied publicly; finally–figures in the budget are being manipulated to distort the District’s true state of financial health which keeps teachers fearful for their jobs, undermines the union’s ability to garner community support for a salary adjustment which maintains our healthcare benefits, and misleads the now fearful community into donating to various supplemental MBUSD fund sources to “save” the allegedly financially fragile district. This strategy increases reserves and provides the ability to boost discretionary spending. That is the priority of MBUSD and this Board.

In the last decade, teacher salaries have funded construction cost overruns, special education encroachments, iPads and related technology, and now they are asked to pickup increases in healthcare and subsidize Common Core training with the differential between their professional daily rate and $38 per hour. Teachers are also going to be required to use their already scarce prep time to prepare substitute lesson plans and attend bits and pieces of training on Common Core instruction, while real dollars are spent on overpriced consultants.

It is our duty as your MBUTA elected leaders to provide you with all the details concerning your health and welfare benefits, salary increase(s), and professional development–as those items stand today at the negotiating table. The email you received from Dr. Matthews on March 26 paints with a broad brush, and as we know, the devil is in the details.  The following bulletin is meant to fully address the issue of healthcare, the MBUSD budget, and MBUTA’s advocacy for our members.

The facts about our Health Care benefits:
Under our current contract the district’s annual contribution toward teachers’ health and welfare benefits is equivalent to 80% of the teachers’ annual premium costs (section 17.2 Master Contract). The 80/20 split has helped to offset an even bigger hit to our wallets the last 10 years; as we’ve weathered an ever-decreasing purchasing power due to lack of consistent salary increases, our financial burden of fluctuations in health care costs has been minimized because of the assurance this agreement provided. Under the district’s proposal, we would bear a greater financial risk–one that exposes us individually to a greater degree than the district would experience as a whole. The plan places a cap on spending levels and anything beyond a 3% increase in the first year would be passed along to teachers, (recently we’ve seen about 5 to 6 percent increase per annum though in some years it has reached as high as 13%), thus dipping into, or completely negating, any salary increase we would have negotiated. Taken the most conservative assumptions, the employee share of monthly family coverage could increase from $371 today to $1750 or more after 15 years, compared to $932 under the 80/20 plan. That is $8180/year of lost purchasing power. We would need to insure a 15% increase in salary in the next 15 years for a mid-schedule teacher just to compensate for that loss and we have yet to give consideration to 15 years of inflation which can conservatively exceed 35 percent.  We would have to average an annual 3-4% salary increase just to keep from falling behind. In the last 6 years, we have been able to secure only 3% in total, and only with a fight. The 80/20 split provided built-in protection and will continue to do so, but only if maintained.

Our current budget is astounding. In Rick Bagley’s board presentation on March 19 he stated that we have a 5% reserve and our budget is projected to erase 28% of the funding gap (missing money toward where funding should be) in 2015 and 33% in 2016. A closer look at MBUSD’s budget reveals that the District has decided to stash 5% in a reserve for economic uncertainty when the state requires 3%, and elsewhere in the General Fund, there is nearly another 7% that is undesignated. This means that instead of the 5% claimed by Rick Bagley, there is in reality a nearly 12% reserve (and this is before looking at the District’s other funds that each hold their own reserves). Even closer scrutiny exposes the District’s ongoing strategy of greatly overestimating expenditures and ridiculously underestimating revenue. In light of this disingenuous presentation of the District’s financial standing, we must continue to urge our members and the public to question every statement the District makes about its ability to compensate us fairly.

Do we think it’s reasonable for our members to take on the financial burden of unknown fluctuations in healthcare costs when our district’s financial situation is the best it’s been in 10 years? Of course not. Our negotiating team will continue to advocate for our members to maintain the 80/20 split when we meet with the district and mediator on April 17.

In the meantime, it is untenable that Dr. Matthews’ would propose a “health insurance committee” as it is akin to asking teachers to join the district’s side of the negotiating table. We dissuade you from undermining the hard work of our negotiating team by signing up for Dr. Matthews committee. Additionally, we are concerned about the invitation issued by Dr. Matthews for you to address questions about negotiations to him. MBUTA is the sole representative of our members, and we are charged with interpreting the impact negotiations will have on your working conditions. While Dr. Matthews is within his rights to address the employees under his supervision, his remarks regarding “MBUTA members” approaching him for information are out of line and possibly a violation of labor law. He should exercise greater discretion when referencing private email correspondence not addressed to him and not intended for his perusal.

We also welcome you to email us with any questions or concerns you might have.

Shawn Chen, President

Lauri Gonalons, Vice President

Bill Fauver, Vice President

Linda Daly, Secretary/Treasurer

At the conclusion of an extremely contentious round of negotiations spanning from March to September, 2012  MBUTA leadership outlined a different, less antagonistic approach for 2013. There were several good reasons for this.

One, school district revenues were increased by the state and will continue to go up for many years forward, theoretically making it easier to attain a salary adjustment. Two, healthcare costs, although rising, have been increasing at a decreasing rate — making insurance premiums paid by the District less of a burden on MBUSD. Three, there were additional funds promised and delivered by the state for staff development related to the implementation of Common Core based testing. Four, teachers are not belligerent people, we are not confrontational, we are not driven by greed, and we are not obstructionists. Five, MBUTA wanted to give district administrators and supervisors an opportunity to prove that when given unparalleled opportunities they care about their employees as much as we are expected to care about the children in this community and their educational successes.

It has been nearly one whole year since contract proposals were sunshined. Although we have tried to negotiate a fair settlement objectively and collaboratively, we have no agreement and we have an increasingly dismissive district that began to hold teachers in utter disregard. Although many of you participated in numerous attempts in the last 12 months to bring attention to a wide range of concerns, we have received no response from those who govern and administrate. We protested teacher layoffs, duplicitous budgeting, financial misrepresentation, foolish spending on technology with built-in obsolescence, corporate malfeasance, lack of transparency, unfair labor practices, incompetence, unilateralism, lack of concern over construction and safety issues, and most recently the abolishment of a representative body of teachers assembled five decades ago as a recognition of our expertise and institutional memory. The list of grievances are many, but we have yet to hear an acceptable response from this governing body on these issues.

It is once again time to stand up for what we know in our heart is the real reason for the success of schools in MBUSD.  We can show students that the righteous voice of people cannot be silenced by those who have chosen self-servitude. Mira Costa has grown to be a great school through your professionalism, vision and dedication in the classroom. Administrators come and go, but teachers remain. We are the bedrock of student success.

As teachers, we have integrity. We must in order to protect and educate the future generation. It is because of this integrity that we must act together. It is because of integrity that MBUTA must now call upon its members to respond with a strong message that we will not tolerate the indifference, manipulation, and corruption that have taken our purchasing power and now our voice.

FOR A DETAILED TIMELINE OF EVENTS, PLEASE CLICK HERE.

Something to consider when making board policy about how to improve education in Manhattan Beach. Also, consider the increase in property values as the impact of the work we do with students. Why would increases to management contracts be awarded annually and teachers be hassled every time?

Last year, during the course of negotiations, MBUTA leadership frequently expressed their dismay over the District’s refusal to provide information and its intransigence at the bargaining table.  We believed that the District was engaged in reckless spending on iPads and playing a shell game with accounts in an effort to try to deny our members a fair and long overdue salary adjustment.  In our effort to determine the level of deceit, we requested a range of documents from the District.  These included financial reports, stipend classifications, salary information for management, agreements with law firms representing District interests, detailed budgetary information, communications with LACOE, and ALL receipts and contracts that have ANY connection with the District iPad program.  We were met with unacceptable responses to these requests or no response at all.  Blocked in our efforts to achieve transparency, we filed an “unfair labor practice” charge with the Public Employment Relations Board (PERB).  On October 4, 2013 PERB released its findings.  They are as follows:

1. The information we requested was, “relevant and necessary to (MBUTA’s) discharge of its duty to represent employees.”

2. The District met these requests with partial responses or, in some instances, failed to respond at all.

3. This conduct resulted in the District FAILING and REFUSING to meet and negotiate in good faith in violation of Government Code section 3543.5(c).

4. The conduct by the District INTERFERED with the rights of bargaining unit employees to be represented by MBUTA in violation of Government Code section 3543.5(a)

5. The conduct by the District DENIED MBUTA its right to represent bargaining unit employees in violation of Government Code section 3543.5(b)

Our assertions last year that this District is NOT transparent in its finances, was resistant to providing essential information and was not negotiating in good faith at the bargaining table has been fully upheld by a legal entity empowered to evaluate such claims.  Despite the vicious and public attacks by the District against our Union and its leadership, the truth has won out.

We promised to tell you the truth.  We have always done that.  We will continue to do that.  Hopefully, this decision by PERB will unify us as we continue to negotiate with an intransigent District for continued salary and benefit adjustments that will restore to our staff equity after 10 years of neglect.  This ruling is enormously problematical for the District.  They have attempted to demonize MBUTA and our actions because they believed they were in control of the message.  PERB has exposed MBUSD’s efforts to thwart the negotiations process, WE must work together to keep it on track.

 Please click the following link for the PERB Complaint Against MBUSD .

A few months ago MBUTA requested a copy of the MBUSD employment contracts with Superintendent Matthews and Deputy Rick Bagley. We are angry. Both of their salaries are guaranteed to rise by 3% each year. Their negotiated agreement with the district includes the maintenance of purchasing power even though they each make in excess of $150,000 per year.

Bagely routinely talks about “total compensation”, makes arguments on the MBUSD website and via email sent to staff about the poor state of the economy in California to argue against an adjustment to the 10 year erosion of your salary, yet his own salary of $158,000 (not including a range of perks), awarded by the school board, the same school board that has denied you of the same consideration for 10 years , will increase by $4740 after this year and by $4882 after the next year. That is an increase of $9622 in “total compensation” over the course of just two years.

But a close look at Bagley’s contract reveals that all management employees are granted a yearly COLA percentage adjustment in addition to the guaranteed 3% RAISE .

Matthews’ compensation was set at $190,000 when he was hired. Today he earns an additional $5700, and will increase his earning by at least $5871 next year. That is an increase of $10,571 dollars in just two short years. Remember, this is in addition to guaranteed COLA increases.

So, while our most experienced teachers have seen declining paychecks and purchasing power over the course of a decade, our least experienced administration has been granted generous and increasing compensation packages by the same Board that offered you zero “on-the schedule” salary adjustment for the next three years.  Unfortunately, for many of us with 10 years of experience, it will take 20 years, not 2 years to see increases of that magnitude; and those with more years may never get there.  Where is the equity? When will you become the priority?

Annual spending in the “books and supplies” category of the district’s budget is up a whopping 123% from $1.53 million per year (original budget for 2011-2012) to an average of $3.42 million through the end of the 2013-14 school year. That is an annual increase of $1.89 million, according to the second interim report. Worse yet, this increase is notwithstanding the worst case scenario assumptions about state funding and the district’s dubious assertions about insolvency, made to The Daily Breeze. “Bagley struggled to present to the county a balanced budget three years out that maintains the district’s reserve requirement” according to the paper. Also noteworthy, the relative stability of certificated salary and employee benefit expenditures which represent a total increase of about $1 million (4%) through the same time period.

Last night, the  MBUSD Board of Trustees directed Superintendent Matthews to transfer $5.9 million from fund 17 to fund 40. This effectively removed that money from being counted as part of the District’s surplus cash. Traditionally, the unrestricted and unallocated balance in fund 1 (general fund) and the balance of fund 17 were counted simply as surplus funds. In January 2011, Statement 54, a directive issued by the Governmental Accounting Standards Board (GASB), required new standards in reporting.

The new directive asserts that ”[w]hile [Fund 17 is] authorized by statute and will remain open, the CDE notes that [it] function[s] effectively as extension of the general fund, and recommends either that they be combined with the general fund for presentation in the audited financial statements, or that the departure from GAAP be explained in the financial statements.” MBUSD Board of Trustees forgone the obvious treatment of the money and decided not to include the $5.9 million in fund 1, where that amount would have increased the balance to over $22 million and would have made the full amount a consideration at the negotiating table.

Instead, the money was placed in fund 40, where it is earmarked for capital outlays, in other words could not be used for teacher salaries. Why would the District wait until a year after such directive and right before contract negotiations are set to begin? One possibility would be that the Board wanted to make sure they did not need the cash for anything else before committing the money to a fund they could not subsequently easily reach. Another possibility would be that the Board was waiting to see how MBUTA reacted to the large surplus of funds before making the money less accessible.

In the last three months, the District has re-allocated $7.2 million away from general use and spent or committed to spending nearly $1.5 million on frivolous technology. The combination of these reduced the liquidity of the District by $8.7 million. In a time where cash is king, CBOs claim unable to balance budgets, and districts cry for help with open palms, this Board is acting with utter disregard.

On November 15, 2011, MBUSD Board of Trustees approved a higher limit for a reserve account. The higher limit increases the minimum dollar amount in the fund’s balance, requiring more of the unassigned funds to be placed in reserves. This move effectively removed $1.3 million from the general fund, thereby shielding the money from being used for salary increases.

The previous limit was set at the state mandated 3% or approximately $1.6 million for MBUSD given the size of its budget. The new limit of 5% was voluntarily set by the Board and was not the result of state requirements. In effect, the Board almost doubled its reserve balance for economic uncertainties to nearly $2.9 million, which means they committed to allocating at least $1.3 million more of the revenues towards this account each and every year from this point forward.

If the reserve is not needed [and it has not been needed], the entire balance of the fund can be moved into unassigned funds at the end of the school year and spent in the subsequent year(s) relatively unnoticed, since each year the reserve account must be replenished at a rate 5 percent of the incoming revenues. As the district expects revenues to increase from the state in the upcoming school years by 3.1% and 2.8% respectively (funded COLA), this will allow for cash accumulation at an increasing rate.  Make no mistake about it, this new measure is aimed to keep ongoing revenues away from employee unions.

In the first interim budget report (2011-2012) delivered to the board of trustees, Deputy Superintendent, Rick Bagley outlines plans for phase II and phase III wireless implementation. According to the document, phase II will cost the district $300,000, while phase III will take an additional $700,000 from the budget. This increase in spending will contribute $1 million to a decline in the projected general fund balance by year’s end. The gap is projected to be slightly greater than $4.1 million.