☆ School board candidate: I'm a CEO; here's how SJ/SF districts can fix their fiscal disasters
Image by Min Chang
Min Chang, a CEO who's turned around three companies and SF Board of Education hopeful, analyzes SJUSD's $1.15 bn Measure R. Instead of begging voters to approve more bonds (as SF's also doing), Chang advises our school districts use smarter budgeting, fundraising, and accountability processes—already proven successful in Silicon Valley's private sector. An Opp Now exclusive.
School bonds like these should matter to all of us, whether or not we have kids. Education is the foundational piece that drives the economy in this area. Our schools are very interlinked with everything that happens locally, from an economic perspective.
With that said, I'm running for school board in San Francisco, so I'm more familiar with SF's Prop A on the ballot this November. It's similar to SJUSD's Measure R in that it's very costly ($790 million) and is designed to fund the school district's capital projects. I think Prop A provides a great case study to help us understand Measure R.
Let me paint the picture for you: San Francisco Unified School District has a budget of $1.3 billion. And yet we're running in a deficit, for multiple years now, to the point that a California state monitor's required to check and report on SFUSD's fiscal activities regularly. Multiple reports have been issued, and the district's been told to start doing a lot of things they weren't doing. But we're still at a deficit and looking to stay in one if nothing's done.
So everyone's question has been: where does that $1.3 billion in SFUSD's budget actually go? What happened to all of it? From what I've observed and researched, San Francisco Unified hasn't done a good job of managing the top line and bottom line; and I believe other school districts like SJUSD can learn from their mistakes.
Starting with the top line, there's some opportunities on the revenue side. We should reconsider these levels: federal (grants still available to the district), state (advocating in Sacramento for a higher allocation per pupil for SFUSD, since we're one of the largest counties), and local (fundraising). For instance, there's a group in SFUSD whose sole job is fundraising, but we only have one large corporate fundraiser and could look more in the local private sector.
I also want to note here that SFUSD had a 2011 and a 2016 bond, as well, yet we're asking for more. I'd much prefer to look at what's left over and use it effectively, before we start asking for additional funding. Bonds are expensive; people often forget there's interest on top of the list price. So from a fiscal responsibility viewpoint, I'd prioritize using every taxpayer dollar wisely.
With this in mind, let's discuss the bottom line factors. I'd prioritize cost reduction in our central office in terms of direct expenses (administration headcount). There's also indirect costs like from supply vendors that can be minimized, as well as reducing our supply base.
If SFUSD (and SJUSD, with their similar want of funding) grows their top line while reducing costs in these ways, I think enough savings could be released and close the gap on deficit spending. Budgeting like this isn't hard; it's not complicated; it's just work. I know it's doable for our school districts.
I came on as CEO in my current company six months ago. In five months, we completely turned around the business. How? First, zero-based budgeting; it's an old school concept, but it works. You go line item by line item and make sure, for every part of your business, you understand each source of funding and can justify each expense. Second, holding leaders accountable to “zero or better” when building projects. That's what I ask my employees to do—and make sure they've done it. You have to build in that accountability and discipline.
So the good news is, there's a solution to schools' fiscal problems. The challenge is, you need school leaders who know how to turn things around, people who are experienced in this kind of budgeting and fiscal accountability. If we keep reelecting the same set of people (however well intentioned), we're not going to get a different outcome.
I'll end where I began: examining these school bonds matters, because our schools matter. Our local economy needs thriving public schools. Of course, our end goal is to be able to release savings; reinvest where it's truly needed; and raise the bar in terms of curriculum, paying educators well, and supporting educator housing. But we can't do that—any of that—when running a deficit.
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