On occasion, I hear comments from community members suggesting our school district mismanages its finances. Such comments pain me, because since I arrived in Alameda in 2009, we have worked diligently to tighten up our systems, trim excess funding and make our financial workings ever more transparent to our public. Indeed, after working in five school districts over 22 years, I can honestly say AUSD is one of the most fiscally responsible -- and financially transparent -- school districts I have seen.
I also know it can be difficult for community members to follow the district's finances because the details are contained in the state's confusing reporting program, as well as in fairly dense presentations to the Board of Education and on our website. So I wanted to take this opportunity to let you know of our very solid accounting and reporting processes, including:
Measure A oversight: In 2011, a supermajority of Alameda voters approved Measure A, which raises $12 million per year for some of our most valued programs. Measure A designated very specific categories in which its revenue could be spent, including small class sizes, high school athletics and AP classes, technology, counseling and art, music, and drama classes. The measure also designated what may be the most stringent accountability and transparency requirements of any parcel tax in the state, including oversight by an independent committee and regular reports to the Board of Education. In 2011-12 and 2012-13, the Measure A Oversight Committee, comprised of local community members, affirmed that AUSD spends every dollar in accordance with what voters passed.
Because of this careful oversight, we know that over the last three years we have spent the parcel tax funds exactly according to the categories laid out in Measure A. The full staff reports on our parcel tax revenues and expenses in 2011-12 and 2012-13 are also on our Measure A page.
Zero-based budgeting: When it comes time to create a budget for a new school year, most school districts simply roll their last year's budget forward, and assume that if anything has changed, they'll fix it midyear. We take a much more thoughtful (and labor-intensive) approach. Each spring, our fiscal staff meets with every department head and site principal in the school district to rebuild their budget by hand. During those sessions, we examine every dollar and every expense to see if it is adding value to children's education. This approach, which we have shared with other districts, allows us to examine each expenditure in a careful way and avoid wasting valuable public funds.
Audits: State law requires that all school districts undergo financial review by outside auditors twice yearly. In my first full year in this district, the auditors reported more than 20 issues with our finances. In 2012-13 they found only one. This is a clear sign that we have streamlined and made more accurate our financial systems. You can find the 2012-13 audit report here.
Debt: Although we are still paying off Measure C, a facilities bond passed in 2004, AUSD does not have a high level of debt. In fact, our tax rate is less than that of 70 percent of the other school districts in Alameda County, and our credit rating is Aa2 with Moody's and AA- with Standard & Poor's, both of which are considered high-quality and low-risk.
Measure H: In 2008, more than two-thirds of Alamedans passed a parcel tax to help protect key educational programs in the district that were in danger of being eliminated due to sharp cuts in state funding. Under that parcel tax, commercial/industrial property owners paid a different rate than residential owners. Although a number of school districts had structured their parcel taxes that way over the years, in 2008 a group of commercial property owners filed a lawsuit against AUSD, claiming the structure was illegal.
Measure A, a parcel tax that applies the same rate to residential and commercial property owners, replaced Measure H in 2011. But since the Measure H lawsuit was filed, we have defended its legality vigorously. The trial court found the structure of Measure H to be legal and affirmed that school districts should have some flexibility in how they structure their parcel taxes. The Court of Appeal found part of the commercial tax to be improper. The California Supreme Court denied our petition to review the case and sent the case back to the trial court last year. In December, the trial judge agreed that the parties should pursue mediation to resolve the remaining issues. So far, plaintiffs have been unable to meet with us on the dates we have suggested.
To protect the district's employees and programs, we also reserved $5.75 million to cover refunds we might need to issue. In addition, we have led the effort to create and pass SB 1021, which would give flexibility to local school districts in how they structure parcel taxes. The bill is supported by a broad coalition of organizations, including the California School Boards Association.
School district finances may not seem as interesting as reports about programs or people. But they are the essential engine that drives everything we do. I am very proud of the ways our community supplements the funds given to us by the state, as state funds don't nearly cover the programs and services our children need and deserve. I am equally proud of the careful and innovative work our staff has done to streamline our budget systems, defend our programs and employees, and reduce our expenses. Please do contact me if you have questions about our budgeting -- or any other issue in the district. You can reach me at 510-337-7060 or firstname.lastname@example.org.
Kirsten M. Vital is superin- tendent of the Alameda Unified School District.