New Schools CFO: SD Unified has 'Hundreds of Excess Employees' - Voice of San Diego

Education UNVEILING THE UNSEEN

New Schools CFO: SD Unified has 'Hundreds of Excess Employees'

San Diego Unified’s new chief financial officer takes on teachers unions and the school board in a wide-ranging interview.

 

Update: Read San Diego Unified Superintendent Bill Kowba’s response to this story here. We also Fact Checked new San Diego Unified CFO Stan Dobbs’ claim that teachers get paid an average of $92,000 a year with $20,000 in benefits. That’s False. The $92,000 includes benefits.

I’ve done a lot of interviews with officials at the San Diego Unified School District, including most of the school board members. I’ve sat down with the unions and the reformists the academics and the kids themselves.

Nothing really prepared me for Stan “Data” Dobbs.

San Diego Unified’s new chief financial officer is a Naval Air Force veteran. He once helped to manage more than 200,000 people, 3,800 aircraft, 11 aircraft carriers and an annual budget of more than $40 billion. He’s worked at two school districts before coming here, and is a self-described problem-solver.

“I get bored quickly if I don’t have enough problems to solve,” he said.

Dobbs is also not scared of talking about controversial issues. In an extraordinarily frank interview in his office Thursday morning, the enigmatic South Carolina native held forth on everything from the district footing 100 percent of employee health care bills (“that’s just ridiculous,”) to teacher pay (“Is $92,000 a year not good money?”) to what he sees as gross overstaffing in the state’s second-largest district (“I’ve got hundreds of extra people laying around.”)

I’ve selected some key parts of our conversation, which have been lightly edited for clarity.

With the problem-solving background you have, is there a part of you that thinks there’s more to solve in this district than simply the finances?

Trust me, if you could be a fly on the wall in some of our meetings.

Coming to San Diego Unified, I look at things from a perspective of a total solution. Someone else might come and say, “I’m in charge of finances, this is my swath of the land, that’s all I deal with,” I look at it from the standpoint that it’s not about fiscal solvency; our business is about educational solvency.

My goal is: How do I ensure that the limited resources we have help us to reach the educational goals that we’ve decided we’re going to have for the children in our community.

I can find the money. You just need to tell me what you want to do.

How do you find extra money, when 92 percent of the district’s budget goes toward salaries and benefits?

We don’t have a grant-writing program in the district. Every district I’ve been in, I’ve hired grant writers and I’ve always gotten at least 3,000 times’ return on investment by doing so.

People have this belief that if you increase class sizes, it has a negative impact on student learning.

That is not documented, proven anywhere. Actually, there’s not one piece of literature published to prove that. As a matter of fact, just the opposite.

You’ll have quite a battle on your hands with the current school board if you start talking about increasing class size.

It’s that sort of entitlement mentality that’s going to kill us.

How do you get around that issue? How do you make sure the school board is on the same page as you and buys into your philosophy?

It’s how you introduce the potential conflict.

Everything I did in the military wasn’t necessarily well-received, so you had to look at how to introduce this information in a way that was clear, concise, data-driven so someone could receive the same conclusion.

So, bottom line, you believe there are more things you can do to save money?

Oh hell yeah.

Yeah, without a doubt.

The district has done a lot to go through and look at how they can save money, but in my professional way of approaching it, they just did low-hanging fruit stuff.

And I wouldn’t have expected them to go any deeper, because they don’t have the tools to do that.

That’s why you’re here?

That’s why I’m here.

I only go to troubled districts. I get bored quickly if I don’t have enough problems to solve.

You have a school board that has a history of saying they will go and do things and then turning around at the last minute and stopping doing them. A good example would be closing small, underperforming schools.

(Deputy Superintendent of Business) Phil Stover is so exasperated with this that at every step of the way, before he has his staff do stuff, he goes back to the board and says, “Are you sure you want us to do this?”

How do you work with that?

I did the same thing for this attrition-based model [A model Dobbs introduced last month that requires the district to not re-hire staff members who quit or retire].

They said they want a solution, here it is. This is what they’ve got to do.

I would say to you, watch what the board do.

They’ve got to show their commitment by saying, “This might not sit so well in my gut, it might go against my principles, but this is what we committed to do so we wouldn’t have to lay off 1,300 people,” and vote yes.

And if they do anything other than that, that’s our first indication that they’re not going to follow through with what they said they were going to do.

We passed measure Z, a $2.8 billion bond measure and, guess what, I’ve got to go to the bond market and sell those bonds.

I’ve got to go to Moody’s and Standard & Poor’s and make our case for us to have a good financial positioning so we can get the lowest interest rate possible to be paid by the taxpayers.

That’s a huge risk.

If we can’t show any dedication to the fact that we can manage our money, manage our finances, manage our business, then how can we get investors to buy our stock, so to speak?

If they decide they’ll buy it, but they want more interest, we’ll sell it to them but guess who’s got to pay that price? The taxpayers have to pay a higher interest rate now and hundreds of millions of dollars on that $2.8 billion because we couldn’t manage our finances, we couldn’t make decisions.

Everything’s on the line.

How can you have transparency when the budget is so complicated?

Nobody’s ever shown me a budget document I understand at this district. Is that doable?

It’s totally doable.

There was probably a strategic plan in the past to have a convoluted budget where you can’t follow the money because it’s part of your defensive strategy.

In my old district, they had a mall, and I made a statement that if I had to put a kiosk in the mall, with a keyboard and a terminal, where you can walk up and pull up the special ed budget and expenses or whatever budget, for people to understand that we want transparency, that’s what I’m willing to do.

If I’ve got to do that in [a local mall], then that’s what we’ve got to do, because it’s taxpayer money.

It is public money. You have the right to know about every dime and where it’s spent.

One of your challenges is that you have a school board that is largely supported by labor unions …

They ain’t largely supported, they are supported by the labor unions.

Placed, strategically, by the labor unions.

So, let’s say we get through to 2014, and we get to the point that we start to get more money from Proposition 30, how do we ensure all of that money doesn’t get swallowed up by a new labor agreement?

What you’re really asking is how you ensure fiscal solvency.

There is a game-over point.

If little Johnnie can’t read and somebody does an article about how little Johnnie can’t read, nobody from Sacramento is going to come down here and say something to us about that.

Somebody might send somebody an email or make a phone call to the superintendent to say, “That’s a shame that little Johnnie’s in 10th grade and can’t read.”

But the day you can’t pay little Johnnie’s teacher, game over.

The whole goal is that the 92 percent [of the day-to-day budget that is spent on staff] doesn’t get bigger.

But it all depends what we do with the new money from the governor. If we increase our expenses, by giving raises or whatever, that 8 percent is going to get smaller.

I’m running a district, literally, off 8 cents on the dollar. You’ve got to ask yourself, at what point does this become a crisis? Is the crisis at 5 percent, 7 percent? No, the crisis was when we were at 85 percent [spent on salaries and wages].

How does that 92 percent compare to other districts you’ve been at?

They were at 80 or 82 percent.

That 8 cents is for everything: books, gas for the buses, paying the lighting bill, running the food services program. Everything outside of paying a human being comes out of that 8 cents.

Nowhere in America could somebody operate a company like that.

Well, they did, but you saw what happened to the Ford Motor Company and Chrysler, that’s the kind of scenario they got themselves in.

The only way we can get that [8 cent] number up is if we get taken over by the state.

Then, over a series of years of renegotiating contracts, eventually getting some sort of compensation from employees on their health and welfare benefits.

That’s just ridiculous.

You’ve got almost 17,000 people and you’re paying 100 percent of all their benefits for them and their spouses and their kids and anybody else, in 2013! That’s ridiculous.

How does that compare to what you’ve seen elsewhere?

Nobody does that anymore!

Nobody can afford it.

I’ve never been in a district where they paid 100 percent.

We’re always told in San Diego that we don’t pay our teachers very much, but we give them good benefits.

Is $92,000 a year not good money?

Well, is it?

Well, I’d be happy with it, but that’s not all teachers, right?

That’s the average teacher!

The average teacher gets $92,000 a year?

Ninety-two thousand a year.

Plus almost about a $20,000-a-year compensation package, that you don’t pay anything for!

That’s $112,000 a year in compensation, that ain’t good enough?

How does that compare to the teachers up in Hayward and elsewhere?

Superior. Because they’ve got to pay for their health and welfare benefits.

Could you solve the district’s structural deficit problem, just with the health care benefits?

You could solve our structural problem with health and welfare benefits, but I would never do it in one swath.

It would have to be something you step into.

How is that going to happen with this board?

That ain’t going to happen.

The only way that’s going to happen is if you build a bunch of relationships and say, “Look, I can do one of two things. If I pay for everybody’s health and welfare benefits, then I’ve got to increase class sizes and I’ve got to lay people off, because that’s the only way I can pay for the benefits.

But you’ve got to really do it.

As far as the teachers union is concerned, it’s always all about the kids. Everything’s always all about the kids.

But if you were to bring this district’s health and welfare package in line with the rest of the state, the rest of the country, kids would get a better education at this district right?

You’d have a lot more money to spend on kids.

And, you’d have a lot more money to spend on training for the teachers to get professional development to better teach those kids. The reason you don’t have that money is because you spend it all on health and welfare benefits.

Our problem’s nothing to do with finance.

We’ve got more problems off the books than on the books.

All this new revenue we were promised from Proposition 30, the way I understand it, just stops us from hemorrhaging more. It keeps us afloat.

It keeps you afloat, but it all depends what you do with it.

That’s why, on (Feb. 12), we’re going to introduce a resolution, trustee Barrera is going to sponsor it, to build our reserves. So when new money comes in, just know, it’s going to be in our reserves.

Now, the union’s going to be against that.

They’ll say that money that’s going to reserves could be used to give us raises or new benefits or whatever, but who cares if you don’t have a place to come to work because you don’t have any reserves?

I’ve got hundreds — hundreds! — of excess employees. Hundreds of excess employees.

Where are they?

Every damn where.

How does that level with the fact that I’ve been told again and again that the board has gone into every corner of this district and found no money, but you’re saying there’s hundreds of employees?

Someone’s wrong.

I’ve been here less than 60 days. All I’m looking at is the data. I don’t know these people yet.

I don’t know who’s at what school, or who’s a power broker.

I’m just looking at the data.

I’ve got hundreds of extra people, laying around. Literally, laying around. Maybe not even benefiting kids.

This is the kind of stuff you have to do to think out of the box.

Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at will.carless@voiceofsandiego.org or 619.550.5670.

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