Emery's Costs Per Student Among Highest in the Bay Area

Emery Unified:  High Cost, Low Performance

$14,713 Per Student

News Analysis
Considering the fact that Emeryville is so robustly growing and its residents are so highly educated (70.5% with a Bachelor’s Degree or higher, among the highest averages in the Bay Area), one would think the school district here would likely reflect the high value residents conspicuously place in education. Yet the reality is Emery Unified School District is highly dysfunctional and becoming more so over time; its schools fading, enrollment and test scores dropping, even in the face of a rising city. 

Tracking a slide in test scores and a resultant drop in ranking among Bay Area school districts, the Tattler has shown how Emery Unified School District has suffered from a lack of leadership especially over the last three years.  However not reported in the October 24th story is spending; is Emeryville spending enough to get the results we expect?  The answer is an anomaly; it's not for a lack of money, Emeryville spends more on its school kids per student than all our neighbors do even while the same neighboring school districts far outpace Emery in academic ranking.  

Bay Area school districts generally spend more than the statewide average of $11,176 per student.  A quick look at the numbers is revealing; Oakland Unified spends $13,813 per pupil, Berkeley comes in at $14,367 while Piedmont Unified, one of the State’s highest scoring school districts spends even more at $14,561.  Emery spends $14,713, the third highest in the State of California among districts our size*.  For all Emeryville's spending, our district ranks the second lowest academically in the entire Bay Area.  

Emery is hamstrung over the fact that its small size exacerbates State mandates that each district must meet, making us provide the same minimums as large districts who can spread costs over a larger budget.  This means Emery must pay more for administration as a percentage of its budget than the larger districts.  A look at our neighbor's costs confirms this; both Oakland and Berkeley have 8% admin costs while Piedmont, even though it’s smaller than those two spends 7% of its budget on administration costs, bucking the trend.  Emery’s administrative costs are 13%.   
However, because we've had two successive superintendents binging on hiring more administrators, even when compared with other school districts its size, Emery’s admin costs are still very high.  Only one school district in California, Modoc Joint Unified, comes in higher (16%), but Modoc’s per pupil spending is only $10,200, almost a third less than Emery’s.  Statewide, the administrative average for all school districts is 6%.

Emery: Expensive and Top Heavy
California's small school districts weigh in.  At an average daily attendance of 665, Emery spends almost $15,000 per pupil with an administrative cost percentage of 13%, more than most school districts its size in both categories.

The high cost per student combined with the high administration costs would tend to give credit to those who increasingly argue Emery Unified should merge with Berkeley Unified, the likely increase in student academic performance that move would net notwithstanding.  This possibility of melding with Berkeley Unified is being compared with when the Emeryville Fire Department merged with Alameda County Fire Department several years ago netting Emeryville residents a better service profile for far less money.  Emery’s academic scoring would likely improve and its regrettable costs per student would probably change for the better were such a merging of the two districts take place.

*Numbers are for 2016, the last year reported by the State

Sacramento Outlaws Emery Type School Bonds

After months of wrangling, California lawmakers have outlawed the worst of a particularly expensive and usurious kind of school construction bond financing called Capital Appreciation Bonds (CAB), the same bond issued by Emery School District last fall.  CAB critics and citizen detractors in Emeryville were quashed by the School Board as they moved quickly to get their CAB sold before Sacramento lawmakers could outlaw the notorious financing scheme.  With Emery's nimble moves, mindful of and keeping one step ahead of lawmakers, Emeryville taxpayers will now be on the hook for more than 30 years of high interest pay back.

Emery's CAB was issued in order to abandon the existing elementary school on 41st Street and rebuild at the Center of Community Life site on San Pablo Avenue.  The new high school there is being financed with cheaper traditional 'general obligation' bonds.

Our neighbors to the north, Berkeley Unified School District has so far avoided any ruinous CAB financing and any possible CAB issued in the future there will be made after the new Sacramento mandated taxpayer-protecting regulations are the law of the land.   Berkeley school board president Karen Hemphill, also coincidentally Emeryville's City Clerk, proudly proclaimed at Berkeley Unified, fiscal responsibility is a "hallmark".

Berkeley is portrayed as the fiscally prudent counterweight to Emery's reckless profligacy in this week's Daily Californian:

State Assembly passes bill aimed to curtail school district debt burden

Tuesday, April 9, 2013

The California State Assembly unanimously passed a bill Monday restricting the use of high-debt-accumulating bonds in school districts and community colleges.

Introduced by Assemblymember Joan Buchanan, D-Alamo, Assembly Bill 182 attempts to reduce the future debt burden by limiting the length of capital appreciation bonds to 25 years and restricting money owed to a maximum of four times the borrowed amount. The bill would also let districts refinance these bonds at a lower interest rate and require increased disclosure to the school districts’ governing boards.
“They shove debt on the next generation of taxpayers who won’t benefit directly from the facilities the bonds finance, which means (the next generation will) have less ability to finance what their kids need,” said Tom Dresslar, spokesperson for California State Treasurer Bill Lockyer, who has been a strong advocate for the bill.

Emeryville City Clerk & Berkeley School Board

President Karen Hemphill

Unlike Emery, Berkeley School District hasn't 

issued a CAB because of a culture of 

"Fiscal responsibility" &"Accountability"

Capital appreciation bonds have been used by public schools throughout the nation to fund large-scale projects like school construction. Unlike traditional bonds, however, for which the funds are repaid in gradual, short-term increments, capital appreciation bonds are paid back in one total amount at a set date, often decades after the bond is issued.
However, during the period between the bond’s issue date and its maturity date, interest is continuously compounded, which often results in high levels of accumulated interest. In some cases, debt payments have accrued to even 10 times the original amount borrowed, according to Dresslar.
Several groups, such as the California Association of School Business Officials and the Association of California School Administrators, believe that capital appreciation bonds should be limited but that AB 182 should be revised.
“If passed in its current form,” said Molly McGee Hewitt, executive director of CASBO, “we are concerned that many school districts will have to delay their facilities’ construction programs, resulting in substandard facilities for students, teachers and staff that are in the greatest need of them — particularly in districts that serve a high percentage of economically disadvantaged families.”
The Berkeley Unified School District is not using any capital-appreciation bonds at the moment, though the use of such bonds is “likely to happen in the future,” according to Mark Coplan, BUSD public information officer.

Karen Hemphill, president of the BUSD Board of Education, mentioned that the board has weighed the pros and cons of capital-appreciation bonds and would consider them only in the context of saving taxpayers money.
“Fiscal responsibility has been the hallmark (of the district),” Hemphill said. “We have a lot of checks and balances and accountability.”
The state Senate will vote on AB 182 in the following months. If passed and signed by the governor, the bill will be implemented beginning Jan. 1 of next year.

Contact Alison Fu at afu@dailycal.org.