MUSD Braces for Loss of Over $2 Million in Block Grant Funding Following Governor's May Revise

Meanwhile, city remains on solid fiscal footing thanks to reserves and federal funds, but economic headwinds provide concern for future as labor, insurance costs rise

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By Tom Lochner

The complicated maze of public funding for education, and the scramble to get a fair share of it, were among the lead subjects of the May 22 Martinez Unified School District board meeting.

This year's Governor's May Revise, an annual step in the state budget process, contains "some highlights – and a couple of lowlights," MUSD Chief Business Official Andy Cannon said at the start of his presentation.

The process begins with the governor's submission of a proposed budget to the state Legislature by Jan. 10. The Legislative Analyst's Office submits an analysis in February. Legislature subcommittees review it, and approve or reject it, or make adjustments to spending levels. The Governor's May Revise follows, with changes based on general fund revenues and adjustments to spending levels  The revised budget proposal goes back to the Legislature for approval by June 15, and then to the governor for signature.

A chief highlight this May is an increase in the Cost-of-Living Adjustment (COLA) to 8.22% from the 8.13% projected in January, which means approximately $300,000 more for MUSD, according to Cannon.

"Lowlights" include a 50 percent, or $1.19 million, reduction to the school district's Arts, Music and Instructional Materials block grant as a result of the May revision; and a 32 percent, or $890,00, reduction to its Learning Recovery block grant. The block grants are one-time funds that the governor is reducing to pay for the COLA increase, Cannon said. Total block grant reduction: $2.08 million.

Proposition 28 art and music funding is still in place, although there is much confusion surrounding it — which, hopefully, will be worked out over the next year, Cannon said.

There is a small funding increase for Universal Meals, which is supposed to ensure that the state can pay for every student to eat. "As you can imagine, when you say it's free, you can get more people to the table, literally, in this case," Cannon said. There also is a small increase in special ed funding, to $887 per pupil, from $820.

In the larger framework, the minimum state funding guarantee for K-12 education under Proposition 98 shrank by almost $2.2 billion in General Fund allocations since January, according to Cannon's presentation. An increase in property taxes of almost $200 million brings the overall decrease in Prop. 98 funding for education to just short of $2 billion.

In other grim news, the MUSD could soon face an increase of up to 15 percent, or about $430,000, in Kaiser Permanente health costs next year, Cannon said.

Later in the meeting, during the public comment segment, Harpreet Singh Sandhu, senior district representative for U.S. Rep. John Garamendi, whose congressional district includes part of MUSD, introduced himself and urged school district officials to look at federal grant possibilities.

"There are many grants available," Sandhu said. "If you can identify them … we will definitely write letters of support in advocating for those grants."

He said he would provide a list of available grants. One difficulty: Many entities seek grants. Sandhu suggested working with other school districts and sharing the services of a grant writer.

He also mentioned public funding that occurs in March and April, commonly known as earmarks. "Unfortunately, what we saw in our (California 8th Congressional) district this year was that people weren't aware how to ask for the earmarks," Sandhu said, adding that some were specifically intended for art and music.

Next year, around September, October and November, "if you have things that you want to ask the congressman for, that come under education, we will work with you," Sandhu said. There is only a three-week window to submit applications and make sure they are accurate, he added.

"This year, we received about 90 applications from cities and counties within the (Garamendi's) district," Sandhu said. "Only 15 are accepted."

Following his presentation of the May revise, Cannon, in what he described as considerably better news, laid out a busy 2023 summer project list of facilities improvements, to be paid for out of several of the district's construction and deferred maintenance accounts. 

The bulk of the improvements, which total more than $1.34 million, will be at Alhambra High School ($917,339) and Martinez Junior High ($412,000). Meanwhile, John Swett Elementary School is being allocated $12,500 to repair a sanitary line at its existing campus. And at Morello Park Elementary School, the district is looking to remove some trees to make way for a planned new building, while protecting a Memorial Tree and replanting it elsewhere on campus.

Both the high school and junior high will see extensive roof restoration – at the high school: Building D, Commons, Shop and Pool Equipment Room, for just over $820,000; at the junior high: Building A, for $245,000. The work should extend the life of the roofs by some 25 to 30 years, Cannon said.

Also at the high school, a sub-drain will be installed along the tennis courts, for $29,750.

"We witnessed so much rain and so much waterflow from the mountain hillside down … it caused us to have to shut down the softball field for a few weeks," Cannon said. "It wasn't a field. It was a swamp."

The hope is that digging down about 4 feet and putting in a new drain line will enable the subterraneous water to flow out from the softball field, while also preventing warping and other damage to the tennis courts, he said.

Other work to be performed at the high school includes replacement of one electrical main breaker and calibration of others; installation of security cameras; repairing cracks at the tennis courts; refinishing the gym floor; and upgrading lighting to LED at the gym's exterior.

Martinez Junior High, meanwhile, will get $52,000 in repairs to the parking lot, with a slurry coat; a strip, repair, restripe and refinish of the gym floor – something the high school also needs, and hopefully will get in summer of 2024, but the junior high needs it more, Cannon said; also, replacement of bathroom floors at the gym and main office; replacement of mastic (an adhesive and sealant) around Building D; and painting of the upper and lower hallways and stairwells in Building A. The district also is looking at replacing a boiler, hopefully before the beginning of the heating season, Cannon said.

The complete 2023 Summer Projects list is at https://simbli.eboardsolutions.com/Meetings/Attachment.aspx?S=36030321&AID=508840&MID=21127 .

The video of the May 22 MUSD board meeting is below:

The following items were written by Craig Lazzeretti

City budget update

The City Council received a long and detailed update on its budget at a special meeting last week. The upshot: Martinez seems to be on solid financial footing — for now — despite some economic headwinds and uncertainty that could pose long-term challenges. As the staff report accompanying the presentation put it, “Thankfully, the city’s strong fiscal reserves, including the benefit of the American Rescue Plan Act (ARPA) funding source, will allow the city to maintain its fiscal policy, which requires a minimum 20 percent of operating expenditures reserve in the coming cycle.” In other words, no budget crisis requiring draconian cuts appears to be on the horizon.

Some big takeaways from the presentation:

• Rising labor and insurance costs are weighing on the budget as revenue growth remains tepid. The City Council recently hiked salaries to try to mitigate the staffing crisis at City Hall, most acutely at the police department, and help it to retain and recruit qualified employees. The city’s insurance costs have jumped from $1.7 million two years ago to $3.2 million in the upcoming 2023-24 budget, City Manager Michael Chandler said, calling them “a significant burden.” He explained that higher-than-average liability and workers compensation claims a few years back have also resulted in steep surcharges on top of the base increase in premiums, though he expressed optimism that those additional charges are temporary as the city’s claims have been on the downswing recently; unfortunately, base premiums are expected to continue rising.

• The city, including the police department, is seeing some progress on staffing levels in the wake of the more attractive compensation packages, though, with a vacancy rate of close to 15% across all departments, it is still far from out of the woods. The salary adjustments “makes us competitive, but now the work’s on us to keep employees and to also bring new employees in, really make this a fantastic place to work and deliver,” Chandler said. Police Chief Andrew White said two recently announced retirements, in addition to an officer who is leaving for the private sector and another who will be going out on family/medical leave, have offset some of the gains from recent hires, and some positions are underfilled or unavailable until new recruits complete police academy training. In a piece of good news, however, the department recently made two “lateral” hires of officers from other departments, a sign that the council’s approval of new incentives to lure officers from other jurisdictions is starting to pay off. “I do believe that we are trending in the right direction if you kind of zoom out a bit and you think about where we were six months ago and a year ago when we literally weren’t pulling in any lateral police officers,” White said.

• ARPA funding, which was approved by the federal government in early 2021 to help local governments weather the COVID-19 pandemic, is continuing to provide a cushion for the city as it deals with the spikes in labor and insurance costs and a revenue situation hampered by a projected decrease in the local sales and use tax and flattening cannabis revenues. The 2023-24 General Fund Operating Budget projects tapping $1.2 million in reserves, including ARPA funds, to meet the city’s budgetary needs, plus an additional $1.25 million in ARPA funds for one-time expenditures. The city’s ARPA balance is projected to stand at $1.34 million at the end of the 2023-24 fiscal year. Councilman Mark Ross expressed some concern about the continued reliance on ARPA funding to fill budget holes. “I’m afraid that ARPA sometimes gives us a comfort level that worries me,” he said.

  Wednesday’s budget meeting can be viewed by clicking this link.

  Upcoming meetings on housing plan, refinery probe

  Two important government meetings of note are coming up this week:

• The City Council will consider adopting its long-awaited and overdue 2023-31 Housing Element on Wednesday (June 7) and sending it onto the state for review and possible certification (it is likely the state will ask for at least some modifications). The Planning Commission signed off on the 353-page plan last month, and, given that the city has already held several workshops on the Housing Element and is already well past the Jan. 31 state deadline for adoption and certification (and is being sued by housing nonprofits for that failure), the City Council will likely follow suit with minimal debate or significant changes. The agenda and information on how to attend in person or on Zoom is available by clicking here. The Housing Element is basically a roadmap on how the city plans to accommodate its housing needs over the next eight years and stimulate development in various income and housing categories. Like many cities up and down the state, Martinez has failed badly to meet its previous state-mandated housing growth targets, particularly in respect to affordable housing, as the statewide housing crisis has grown more severe. It is also among a number of cities locally, regionally and statewide that are losing residents as more people find themselves priced out and in search of cheaper housing elsewhere; according to the latest estimates from the state Department of Finance, Martinez’s population fell 0.7% last year, compared with a drop of 0.4% for the county and state as a whole. Only five Contra Costa County cities registered population gains last year: Antioch (0.9%), Brentwood (0.5%), Hercules (1.4%), Oakley (1.7%) and Pittsburg (0.2%). The biggest percentage declines were in Clayton and Pinole, which both saw their populations drop by an estimated 1.1%.

• The county-led Martinez Refining Co. Oversight Committee meets Thursday (June 8) at 2 p.m. on Zoom. Committee officials said last month that initial soil sampling test results from the Thanksgiving night “spent catalyst” release were expected to be available by late May or early June, and if that timeline holds, there should be some data presented on Thursday about levels of various metals found in the samples from various sites where the toxic dust from the accident is believed to have landed. Whether there’s any conclusive insight presented Thursday on long-term health and environmental impacts is another matter; Deputy Contra Costa County Health Director Matt Kaufmann explained at last month’s meeting that the initial soil sample results would be only the “first piece” of a detailed process to try to determine any ongoing risks. The lab results need to be validated, Kaufmann explained, and the numbers them crunched into a “risk assessment” model that will compare the levels of metals found against benchmark standards and background levels expected to be found in California. Thursday’s meeting can be accessed by clicking this Zoom link.

  Martinez Sturgeon off to slow start

  Martinez’s professional baseball team is off to a 2-5 start to the young season after Saturday night’s 8-7 loss to the Monterey Amberjacks. The Sturgeon had a topsy-turvy two games against the Marysville Drakes earlier in the week, winning 18-8 on Wednesday and then losing by the same score the following day. Riding a three-game losing streak, the Sturgeon play the San Rafael Pacifics for the third time this season at 2 p.m. today at Waterfront Park, having dropped the two earlier meetings by scores of 17-5 and 4-3.

  

  The Sturgeon in action during their home opener against the Dublin Leprechauns on May 28. Photo by David Scholz