Nov 26 2012

School Tax Oversight: Raushenbush Responds

Readers have continued to make inquiry about a future School Parcel Tax Subcommittee charged with evaluating fiscal needs of the Piedmont Unified School District.  Rick Raushenbush, President of the Board, has provided his understanding of the Parcel Tax Measure and how the oversight Subcommittee will advise on the tax levy.   The decision on the parcel tax measure and the language contained therein is on the Board of Education agenda for Wednesday, November 28, in the Council Chambers, 120 Vista Avenue,  starting at 7:00 pm.
1.  In your responses, you refer to the Board’s Resolution as specifying the number of public hearings, etc.  When implementing a voter approved tax measure, can the controlling language be in a Resolution, or must it be in the tax measure itself?
The technical answer to your question would require a legal opinion.  My understanding, however, is that a Board Resolution reflects the Board’s direction to the District Administration, which would stand until the Board gave the District Administration different direction.  A voter-approved tax measure would be binding upon the Board and the District during the term of the measure.  The tax measure requires at least one public hearing. The Resolution directs the District Administration to hold two public hearings, which is consistent with the Board’s practice at least since I joined the Board in 2008 and I am told before then as well.

2.   In your responses, you express your “expectations” of what will happen regarding the Parcel Tax Subcommittee. Have you considered placing these in the tax measure to ensure your expectations are met and followed by future School Boards?

There is a balance between setting minimum requirements in the tax measure and leaving room for the Board to refine and improve the oversight process based on experience.  The tax measure requires creation of the Parcel Tax Subcommittee, consisting of 3 to 5 tax-paying members of the BAC selected by the President and Vice-President of the Board, preparing a report to advise the Board, making a presentation at the first public hearing on levying the tax.  Whether the Parcel Tax Subcommittee members are solicited and selected at the first or a later meeting of the BAC, whether there will always be 5 members, etc. are issues where experience may teach us which is the best approach, and therefore the Board, the President and Vice-President have some flexibility in determining how to best accomplish the Parcel Tax Subcommittee goals set forth in the tax measure.  

3.  Several readers have pointed out a conflict of interest in having former district staff on the oversight committee.  Previously 33 of 35 BAC members voted in support of raising the parcel tax. (See Patch article <> .)   Please address the readers’ conflict of interest concerns.

I have read the concerns about a conflict of interest, but do not agree with them.  The concern is that former District employees have an interest in current District budgets because those budgets could affect them financially.  That is possible, but not very likely.  As for actual pensions, the District has no control over Cal STRS pension benefits or contributions, which are set by state law–once an employee is retired, the employee receives payment from STRS, not the District.  As for other benefits, retired employees are entitled to the benefits available to them under the collective bargaining agreements in place when they retired.  As a result, when the Board capped health insurance contributions for current District employees starting in 2011-12, retirees under CBAs that give retirees what current employees receive also were capped, while retirees under CBAs that gave them what they had received when they retired were not affected.  All District retirees lose District-paid health insurance when they reach Medicare eligibility age and, as of July 1, 2014, will be limited to no more than 5 years of District-paid health insurance or until they reach Medicare eligibility age, whichever comes first.  Unlike the City of San Jose, which sought to change retiree benefits based on economic infeasibility, the District does not have outstanding pension obligations and only a relatively small exposure to paying health insurance benefits for retirees temporarily.  The financial interest of a former District employee as a result of their former employment almost certainly is less than their interest as a taxpayer, i.e. they would save more by opposing the tax than they would gain by supporting it.  I also note that every taxpayer has a financial interest in the Board’s decision.  Ultimately, the Parcel Tax Subcommittee only provides advice to the Board–and the elected Board members will decide on the parcel tax levy and all other budget issues.
4.  Why did the BAC, in addition to the CAC, take a vote on whether to raise the parcel tax levy in 2010?
All community groups are entitled and encouraged to provide their views to the Board on the parcel tax levy as well as other issues.  The BAC, as a group of individuals who follow the District’s budget throughout the year, provided their view on the need for the levy.   Ultimately, the elected Board members take into account all public comment in exercising their responsibility to decide whether to levy the parcel tax.
5.  The CAC is a year round committee, while Parcel Tax Subcommittee members will be identified “by November” and prepare a report in a few months.  Do you anticipate it will have a more limited role than the year round committee?
The CAC’s work assessing the District’s budget and the need for a parcel tax levy occurred during roughly the same time frame because the Governor’s budget is delivered in January, thus providing at least some idea of the amount of State funding that likely will be provided to the District.  The remaining role of the CAC was to provide information of interest and use to the Board, which has consisted of long-term trends in funding and compensation, and how the District compares with other comparable Districts.  If the tax measure is adopted by Piedmont voters, the Board will decide whether to ask the Parcel Tax Subcommittee if it is willing to update such reports (and prepare any others that the Board may find useful) and the Subcommittee members will decide whether they can devote the time and energy to do so.

6.  Currently, the committee (CAC) charge and member selection procedures are determined by the Board.  New procedures have been incorporated into the proposed tax measure, precluding any changes by the Board for 8 years.  Since these provisions will not have the option for future modification by the Board, how will the Board address PUSD oversight needs as they evolve?

As noted above, certain fundamental requirements for a Parcel Tax Subcommittee are included in the tax measure.  The Board has that ability to ask the Parcel Tax Subcommittee to do more, or even to set up other committees, if it feels that oversight needs are not being addressed.  Ultimately, however, the elected Board members are responsible for oversight, including determining the need for parcel tax funding and ensuring the funds are well-spent.

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