Minor Trims on Major Issues: The Triviality of Current U.S. Debt Ceiling Negotiations.

Sunset, Yosemite Valley.

© 2013 Dliff.

CC BY-SA 3.0.

via Wikimedia Commons.

In an article today in the New York Times, Jim Tankersley discusses the ongoing negotiations between President Biden and House Republicans concerning the U.S. debt ceiling. The primary focus of these talks has been to curtail nondefense discretionary spending, which encompasses areas such as education, environmental protection, and national parks. However, this sector represents less than 15% of the government's anticipated spending of $6.3 trillion for the year. Meanwhile, the negotiations have precluded any substantial changes to Social Security and Medicare, which account for the majority of future projected spending growth, and military spending, which rivals nondefense discretionary expenditure in size.

The proposed budget cuts chiefly target areas that are not primary sources of spending growth in the upcoming years, such as education and environmental protection. The reductions could lead to a 30% decrease in many popular government programs, according to White House officials and independent analysts. Additionally, the negotiations are unfolding in the wake of a substantial spike in federal spending during the Covid-19 pandemic under both President Trump and President Biden's administrations. Despite this increase, the Congressional Budget Office expects a modest drop in total government spending for this fiscal year, followed by a rise later in the decade.

The projected increase in federal spending over the coming decades is attributed primarily to major federal health programs and Social Security. These trends were apparent even before President Biden took office. The current negotiations, with their focus on trimming relatively small parts of the budget, have been criticized from both ends of the political spectrum. The stalemate over addressing mandatory spending programs and the nation's tax system continues with no immediate solution in sight. The trajectory suggests that an agreement capable of significantly altering federal spending in the future is unlikely under the current approach.

Questions from the Press, Friday, May 12, 2023.

Miles Trachtenberg

Heather Kelly Trachtenberg

I received questions today from Dan Johnson of the Sonoma Index-Tribune regarding last night's decision by the trustees of the Sonoma Valley Unified School District to proceed with construction of the Science Building at Sonoma Valley High School. Per my past practice, I post the questions and my answers below. 

I have attached a picture of my nephew, Miles, and my sister, Heather. Miles is graduating in a few weeks from his high school, the Houston Academy for International Studies, and at the same time has earned an associates in arts (AA) degree from Houston Community College, as he completed the work for both at the same time. He was also, incidentally, the prom king. Well done Miles!

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1. Did the board approve the original agenda item—to approve the lease-lease back agreement—or did it simply vote to move forward with constructing the new science wing?

My understanding of the item is that it was approved as agendized. A lease-leaseback arrangement covers both the design and construction of a building, which allows collaboration with the builder throughout the process, an innovation that has resulted in lowered construction costs, and closer adherence to the agreed-to designs in school projects across California. The lease-leaseback approach aims to involve both the contractor and architect early in the project to, hopefully, minimize expensive changes after construction starts, ensuring the project stays within the initially established price. The method normally encourages close collaboration between the architect and builder from the beginning and throughout the project. In contrast, the traditional design-bid-build process often lacks this level of coordination, as design documents are completed before the contractor's involvement.

This particular lease-leaseback arrangement was entered into several years ago, but commencing construction under the terms of the lease-leaseback itself requires approval from the board. Again, my understanding of the agenda item was that we were approving construction pursuant to the original lease-leaseback arrangement.

2. So, does this mean that the school district has not arranged yet for a construction company to build the science wing? I thought that a construction company had been determined. If so, what is the name of the construction company and what is the significance of the lease-lease back agreement?

The relationship with the contractor, GCCI, was formed at the time of the inception of the lease-leaseback relationship, which is normal and routine. We are continuing with the agreed-to contractor, which is what I would expect if the District did indeed intend to follow through and make the bond expenditure. However, we are not required to do so -- as a District we have the discretion to decline to proceed. Especially given the greatly modified scope of this particular project, which has been transformed from a mere remodel to a complete demolition and reconstruction, it would not have been unexpected for this project not to have gone forward.

3. I see that the modernization is estimated to cost $15,484,390, quite a bit higher than the original estimate of $8,684,390. Why has the cost increased so much?

We are now demolishing the existing building and commencing construction on an entirely new one, a very different proposition from the original proposal. Further, the costs of remodeling included many accommodations to the existing design, making it essentially no different from, and perhaps even more expensive than, simply knocking down the building and starting over. However, the remodel was initially conceived as a cost-saving measure to avoid having to construct a completely new building. Had the District known that remodeling would essentially involve a decision to demolish, I feel the decision probably would have gone a different way.

4. The new science wing was scheduled to be built by summer 2024. Will this still be the case? When will construction begin?

My belief is that demolition will begin shortly after the conclusion of classes in June. I defer to staff and the contractor regarding the expected completion date. 

5. Will the district be able to pay for the new science wing strictly through Measure E funds?

It is the belief of the District that it will be able to do so. Several of our bond projects have run over cost significantly. We have little room left for error at this point.

6. It seemed that most of the concerns about approving this agenda item centered around costs to improve facilities at Altimira Middle School. What work needs to be done at Altimira?

Seven Altimira buildings were constructed via "tilt-up," and they constitute the bulk of the Altimira campus. Tilt-Up construction features series of concrete panels tilted up into place to form a building's exterior wall. These panels are created at the work site using wood forms, rebar and concrete. The forms are shaped and rebar cut to match the final designs. Next, concrete is poured into the forms and finished. 

While the technique was popular in the middle of the 20th century due to the perceived lower cost associated with the method, in the longer term the price associated with maintaining adherence with seismic safety standards ultimately makes it no less, and perhaps more expensive that competing methods of construction. During the preparation of the facilities master plan by Perkins Eastman, the consultants brought to light the SB 300 status of Altimira’s buildings. These buildings do not meet current seismic safety standards and SVUSD will be required to conduct a retrofit (at best) and perhaps will have to demolish and reconstruct these buildings in the near future, as the structures simply do not meet contemporary seismic safety standards -- a fact only brought to light in January of 2023. 

7. Why wasn’t the work at Altimira included in the list of bond projects?

The process of choosing projects on which to expend bond dollars was supposed to be guided by the principle of "safe, warm and dry." Safety was, at all times, intended to be the guiding principle in project prioritization. I have had disappointment over and over again at how the politicization of construction in the District has led to very different priorities being advanced. Ultimately, the bond expenditure program ended up being a series of compromises between competing groups all with legitimate claims to the expenditure of resources. My belief is that we as a District cannot allow that to occur again, and we must make sure to constrain, in the drafting of the bond measure language, the projects the trustees are allowed to expend funds regarding. 

8. How much do you expect the work at Altimira will cost?

I don't know. I have asked repeatedly for an estimate. Perkins Eastman represented to me they would have an estimate several times, including at our March and April meetings, but no information has been forthcoming. 

My expectation, at this point, is that the buildings will all need to be demolished and reconstructed, and I expect each will cost in the range of $10-$15 million. In aggregate, I would not be surprised if the total figure is between $70-$100 million as a consequence. 

While our business officials have expressed hope that remediation may be an order of magnitude less than this, more in the range of $5-$7 million, their reticence in committing to that figure is the "tell," so to speak, regarding the confidence anyone can have in that back-of-the-envelope calculation. 

9. Do you anticipate that another bond measure will need to be passed to do the work at Altimira, or can it be paid for in another way?

There was a lot of general language shared in the meeting regarding alternative funding mechanisms. Among the suggestions was the sale of District property, a complete nonstarter as far as I am concerned. CDOs, or collateralized debt obligations, are of course available, but because those are backstopped by the District's general fund, they should not be used in my opinion unless the project to which they are dedicated is revenue-generating. While there is some state money, and redevelopment agency funds anticipated to be received in future years that could potentially be securitized, none of these are appropriate for the construction of ordinary school facilities that were and are the top-line priority for past and future bond campaigns. Simply put, if we're not using bond monies for seismic safety, what are we using them for in the first place? Is there any higher priority than student safety in an earthquake, particularly for a school that serves our most disadvantaged student population? 

10. Do you think that it is likely that a bond measure could pass, and would other district needs be included in it?

This is too contingent of a question to answer at this time. SVUSD's record of bond expenditures makes clear that any language in a future bond will have to be carefully scrutinized before it is allowed to go to the voters. Having witnessed the gap between the reality of how bond funds have been spent, and how they were represented to the public in the first place, I would be very uncomfortable ever bringing such general language to the voters again. The legitimacy and accuracy of the bond offering is critical to ensuring that the funds are expended as the voters intended, and that just didn't happen in the past. 

11. You indicated that you felt there were strong arguments both for and against moving ahead with building the science wing. Please summarize your thoughts. 

Only the most trivial of arguments are easily disproved, and as trustees we know we are grappling with our essential duties when strong arguments can be deployed both pro and con. Here, support for science education is amongst the top priorities of our trustees. Remodeling our buildings that serve that important program will help equip our students for success in a future yet to be imagined, let alone fully described. I can understand the inclinations of my fellow trustees to proceed with the project given that important priority. Further, the fact that it has taken this long to reach this important project is again a further testament to how other projects, of less import to our constituents, were nonetheless advanced on the District's construction calendar. 

Change is difficult. It is scary to confront the costs that we may be facing at Altimira. As our business officials noted, the costs at Altimira may be so high that the remaining bond funds would be inadequate to address the issue, and the science building project is ready to commence. However, our voters expect us to prioritize given the facts that this board confronts, not the ones faced by another board in another time. The clear problems at Altimira, and the lack of any guidance given to the trustees on those costs, while the trustees were urged to approve this science building project that is now nearly double its initial estimates, justified caution in proceeding and the trustees should have obtained more information before approving the science building. Thus, the source of disagreement I think did not turn on the merits of the science building itself, but whether the appropriate amount of information had been provided to the trustees to weigh the competing interests. A special meeting could have been scheduled in a week or ten days to review estimates of Altimira and make a fully informed decision; the fact that the trustees did not wait to obtain that before proceeding was thus the ultimate source of disagreement at the meeting last night. 

12. How will building a new science wing enhance education for Sonoma Valley High School students?

New facilities are amongst the clearest ways we, as a District, can show our commitment to a particular program, and science education lies at the core of our current understanding of how to prepare our graduates for college and career. Existing facilities do not meet the needs of our program, as articulated by our educators. I trust their evaluation of this, and the science building is indeed a priority. 

There are alternatives to new construction, including the fact that as our enrollment and attendance decline, we have a surfeit of classrooms and structures available for repurposing. There was not a detailed discussion of those alternatives, and I would have liked to have seen if there were other options before proceeding. There were discussions about whether that information could be provided quickly, and I think it would have been appropriate for the trustees to consider this before proceeding.

13. Would you like to say anything else?

I believe that my fellow trustees are acting to resolve competing claims to resources, which is a classic function of a school board. It is right and proper that they should do this. However, I believe prudence here would have guided us to conserve bond funds, in an effort to demonstrate this board is aware of the issues with prior bond expenditures and knows the public is observing how well our governance team matches professed values with those practiced and applied over time. We as a District should be doing all we can to conserve resources to address those most critical of issues, and it is hard to find any more important in the context of facilities than seismic safety. While I realize those who serve as trustees with me now were not those who made earlier decisions regarding the expenditure of bond funds, we have collective responsibility for the operations of the District and we must recognize that the public will not distinguish us from one another when evaluating whether to support future bond expenditures, which will inevitably be necessary to maintain the quality of instruction our community wants and deserves. I remain committed to working with my fellow trustees to navigate these difficult questions in the future, despite our disagreement at times over priorities, such as we had last night over this construction decision.

Economics and the Mona Lisa Smile.

"Mona Lisa."

Leonardo da Vinci.

Public domain.

via Wikimedia Commons.

The Economist this morning observes that economic forecasting has become increasingly unpredictable, with analysts struggling to accurately forecast many key international measures. Contributing to the confusion are challenges in data collection and interpretation due to Covid-19 disruptions and declining response rates to official surveys. The pandemic caused significant fluctuations in growth, complicating seasonal adjustments in economic numbers. Also, reduced response rates to surveys may have led to increased data volatility and potential bias, as non-respondents tend to be less prosperous, which could distort income statistics. The article uses the ambiguous "smile" of Mona Lisa, painted by Leonardo da Vinci via the sfumato technique, as a metaphor for the difficulty of discerning the true state of the economic environment given this unpredictable data. 

One source of confusion arises from the discrepancy between "hard" and "soft" data—objective indicators such as unemployment rates, and subjective variables like individuals' future expectations. Typically, these two classifications of data are congruent. However, at present, they exhibit a stark contrast. "Soft" measures indicate a recessionary trend, while "hard" measures suggest a reasonable economic expansion. This divergence may be attributed to the public's discontent with inflation. In affluent nations, prices continue to escalate at an annual rate of 9%.

Economic measures really matter for government budgeting, as California's Legislative Analyst's office (LAO) relies upon that data in planning future budgets. Necessarily, many of the points the Economist makes about uncertainty get resolved by the LAO in the "negative" (that is, they accept the more dire forecast). As the LAO (accurately) writes in their 23-24 budget analysis, the U.S. economy experienced rapid expansion from summer 2020 through 2021 due to pandemic-related federal stimulus. However, this growth was (as far as the LAO is concerned, and many others) unsustainable, leading to record low unemployment and supply chain challenges, causing consumer prices to rise 8% year-on-year. To combat inflation, the LAO points out that the Federal Reserve has enacted large interest rate increases throughout 2022. The LAO interprets the hard data it sees, that California is experiencing decreased home and car sales and falling stock prices, as well as weaker state tax collections, and concludes there is a slowdown in the economy. 

The LAO, though, is looking at some of the same data as the writers of the Economist, and thus notes that while overly optimistic projections could result in future shortfalls, an excessively pessimistic projection could lead to premature cuts to public services. Further, despite all the foregoing, the LAO points out that "the state can afford to maintain its existing school and community college programs and provide a cost-of-living adjustment of up to 8.38 percent in 2023-24," which would essentially meet the rate of inflation for educational funding in California. Despite the economy's sfumato, at least that is clear. 

Questions from the Press, April 15, 2023.

Today, Sonoma Valley Unified's board held a meeting to discuss its Superintendent search. Because I generally get questions shortly after meetings from the Sonoma Index-Tribune and the Sonoma Valley Sun, I took the time during the session to write down what I thought happpened, and my meeting notes are below. Also, the photograph included is of my daughter Siena, a lacrosse player for Sonoma Valley High School, of whom I am very proud. 

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The public portion of the meeting concerned the findings in the Leadership Profile Assessment conducted by Hazard, Young, Attea & Associates (HYA) for the Superintendent position. The data was collected from virtual interviews, focus groups, and an online survey involving various stakeholder groups, conducted between March 10, 2023, and April 7, 2023. The purpose of this assessment was to assist the Board in determining the desired characteristics in the new superintendent, as well as to identify the district's strengths and upcoming challenges.

Participation in the data gathering process included a diverse range of stakeholders, with 621 respondents to the online survey, which was offered in both English and Spanish. Parents and support staff were well represented, with 325 individual responses. Sonoma Valley Unified School District's strengths include community partnerships, a value for diversity and inclusion, and talented, dedicated staff. Challenges and concerns facing the district include a pervasive sense of mistrust towards the district, a high rate of superintendent turnover, a need for improved governance practices, and addressing student mental health needs.

The focus group meetings allowed participants to build upon each other's comments and respond to questions regarding stakeholder values, current and future challenges, and desired characteristics in a new superintendent. The search team thanked all the participants and the SVUSD staff for their assistance, and particularly Kyra Sherman for organizing the stakeholder scheduling.

The data presented summarizes the participation of various stakeholder groups in personal interviews, focus groups, and an online survey conducted for the Sonoma Valley Unified School District Superintendent search. The key insights from this data were:

1. A total of 95 stakeholders participated in personal interviews or focus groups, while 621 stakeholders responded to the online survey.

2. The online survey had broad participation from different stakeholder groups, with the highest participation from parents (269), followed by support staff (56), students (22), and community partners (10).

3. Among the interviewed stakeholders, site level administrators had the highest participation (20), followed by teachers (103), and central office administrators (5).

This data indicates that there was considerable engagement from various stakeholder groups, particularly parents, support staff, and site level administrators, during the data gathering process for the Superintendent search.

The profile was essentially that SVUSD is seeking a Superintendent who: 

• Is Visionary and has a student-centered approach, emphasizing instructional focus, special education, and balancing district strategies with classroom innovation;

• Fosters trust, respect, and a positive climate among stakeholders, with an emphasis on relationship-building and engaging with the Latino community;

• Collaborates with the Board, supports teachers and staff, and seeks input from educational specialists in decision-making;

• Involves all stakeholders in strategic planning and implementation, maintaining a track record of positive working relationships and approachability across the community;

• Demonstrates experience in managing enrollment, reconfiguring schools, strong financial acumen, and commitment to biliteracy and biculturalism.

The trustees, before entering closed session, reviewed the analysis of the survey data from HYA. The data revealed a significant disparity between the opinions of administrators and community members, with no clustering observed on the State of the District. In contrast, more clustering was found in the weighted Leadership profile. Interestingly, "understanding and being sensitive to the needs of a diverse student population" ranked within the top concerns for both community members and students. Indeed, the two highest priorities of students were that the superintendent be visible throughout the district while actively engaging in community life, and understanding and catering to the needs of a diverse student population.

The trustees then entered closed session. The closed session adjourned at 12:20, with no action reported.

The Nature of the Firm and the limits of Economics.

     

Ronald Coase

University of Chicago Law School

via Wikimedia Commons

https://tinyurl.com/26ffzfkp

This week's Economist includes an article by their Free Exchange columnist, regarding the "The Nature of the Firm," Ronald Coase's classic 1937 work. Despite the belief in the 1990s that economics could command a unified science of business, three decades later, it has not progressed in understanding the inner workings of firms. Neoclassical economic theory primarily focuses on markets and the allocation of scarce resources, but it does not account for the fact that much of the allocation of resources in economies occurs within firms, where employees are directed by administrative fiat rather than price signals. The theory that firms are profit-maximizers is also challenged by the reality of "bounded rationality," as no business could process all the information needed to extract maximum profit.

Economists have made strides in understanding firms through concepts such as team production, incomplete contracts, and the principal-agent problem. However, these theories still fall short of providing practical advice on corporate strategy. Economics often fails to capture the importance of corporate culture, shared values, and pride in the workplace, which are essential to a flourishing business. Moreover, economics is limited in its ability to address the specificity of business problems, as they require detailed knowledge of various fields outside the discipline. While economic ideas can offer some insights, the study of business remains an outpost that economics is unlikely to conquer fully.

It was beyond the scope of the article, but a government agency (or, as a shorthand, an "agency") can also be viewed as a firm responsible for providing public goods or services and implementing policies. Like traditional firms, government agencies coordinate resources and make decisions under the principle of "bounded rationality." The major difference is that these agencies differ in their objectives, as they aim to maximize social welfare and address market failures, rather than seeking profit maximization, but which I would note, makes the insights of the Free Exchange column even more trenchant. Further, because government agencies also face unique challenges in terms of bureaucracy, political influences, and accountability, their efficiency and decision-making processes are even less susceptible to an economics-based analysis. 

While apocryphally attributed to Twain, William S. Burroughs' advice to "write about what you know" leads me to look at my home in light of this. I note, over and over, that the critical issues my community encounters are almost always decided in an interchange and an interplay between firms and agencies. If anything, economics is something of a base meridian used to calibrate during the continuing conversations with multiple actors that are directed by fiat using bounded rationality to either pursue profit or improve social welfare, a problem only marginally susceptible to economics-based analysis. 

Almost all of the important questions instead require detailed knowledge of various fields outside of economics. Indeed, to the extent that economics is used after the point-of-reference stage, it is of limited utility by itself. The dozen other factors noted above, including but not limited to corporate culture, shared values, pride in a workplace, bounded rationality, team production, incomplete contracts, the principal-agent problem, political influence, bureaucracy, accountability, market failure, and social welfare, are generally the factors to address in any analysis of the (for lack of a better phrase) political economy of most local decision-making that I have encountered -- a nice checklist for future reference. 

Attendance, Housing, and Basic Aid.

 Sonoma County's 40 public school districts continue to see attendance declines. The lack of housing and a steadily declining birth rate are among the factors contributing to the decline. Sonoma County is predicted to experience a 16.9% enrollment drop by 2031, the fourth worst in California, as reported by the Press Democrat. In the past five years, Sonoma Valley has already experienced an 18.9% decrease in attendance, and as a trustee, I am familiar with the very profound changes that can cause. 

The article elides past some distinctions that are worth noting. First, school funding in California is based on attendance (the so-called "ADA," or average daily attendance), not enrollment (ADA is usually about 90% of enrollment, although there is a lot of variation).  Paying attention to the attendance figure will be the more reliable indicator of the state of school finance going forward in Sonoma County. 

Second, and related to the first point, is that as of November 2022, 16 of the 40 school districts in Sonoma County were "basic aid" districts, whose revenues do not change with either attendance or enrollment. In 2021‑22, the state had 118 basic aid school districts (about 13 percent of all districts).  As attendance continues to drop, more and more Sonoma County districts will become basic aid. Basic aid will increasingly be the default rule in Sonoma County. These districts (like Sonoma Valley) will ironically end up with more money per student given declining attendance, which is why many of these districts may very well not be interested in district consolidation intended to cut costs, as such consolidation would in fact reduce per-student funding.  There are a number of these districts in San Mateo, Santa Clara, and Marin counties, those counties having had many of the same housing issues as Sonoma County for a longer period of time, and the trend in those counties has generally been against consolidation of districts.   

A final point, which comes up here from time to time. "Affordable Housing" is a term of art in many respects, and while there is a shortage of housing that can be afforded in Sonoma County by most people, that is different from "Affordable Housing." Sonoma County just lacks housing, period. Narrowing the issue using the term of art is probably not the most helpful, because it obscures the fact that the response to the crisis needs to be comprehensive.

@TheEconomist and @duncanrobinson on #RoaldDahl.

Puffin, the publisher of Roald Dahl (Charlie and the Chocolate Factory, James and the Giant Peach, etc.), recently edited some of Dahl’s works for sensitivity, removing words such as "fat," "flabby," "ugly," and "Kipling." This act, which sparked a backlash, it is argued by Bagehot, the Economist’s British politics columnist (Economist articles are traditionally unsigned, but this one is by Duncan Robinson) is part of a broader trend in British publishing, where books are being censored or dropped, and sensitivity readers are employed to ensure adherence to modern morals.

Roald Dahl, 1954. 

While the right to prepare derivative works is at the core of copyright, the editing of Dahl's work by Puffin, a Penguin imprint, is argued to be just one symptom of a deeper issue in the publishing world. Making an impressive leap, Bagehot contends the argument that suppression of speech is only a problem in totalitarian states fails to recognize the "veiled censorship" in British publishing. There is an orthodoxy that right-thinking people are expected to accept without question, and resistance to the same leads (at least in the mind of the columnist) to being silenced with surprising effectiveness.

Publishers, in an attempt to look likable, often panic and preempt offense, leading to the removal or editing of content. However, this nervousness and desire to look nice can have nasty results, as it stifles creativity and prevents important discussions from taking place. The observation that the publishing industry is susceptible to peer pressure sounds in truth, as any observer of media generally is keenly aware of herd effects and the power of groupthink in the industry.

Where the columnist goes awry (and this is perhaps to be expected for a print journalist) is that there are a variety of means where unorthodox ideas can reach a broader audience. If anything, the rise of misinformation through alternative channels presents far broader problems for democracy than were ever perceived twenty to thirty years ago. Editors and publishers are not all wrong, and sometimes, they are even right as a group. I feel I can understand both the germ of the argument and the (veiled?) frustration of the writer given the unique power of publishing in certain professional and cultural circles. Sending ideas out into the world in book form is a form of professional and social recognition oftentimes far exceeding the economic import of such an activity.

Given the foregoing, I think the argument advanced, and particularly the vignette of how the suppressive mechanism works, is powerful. “What is striking is how apparently mild the sanctions are for speaking out … what really terrifies you is that your colleagues will think a little less of you. Most people do not require the threat of being burned at the stake to shut them up; being flamed by their peers … is more than enough.” Nudges in favor of conformity are often powerful precisely due to their superficial innocuousness – a timeless observation if there ever was one.

Questions from the Press, March 27, 2023.

 As has come up here from time to time, I serve as a trustee of the Sonoma Valley Unified School District, in the northern part of the San Francisco Bay Area. My practice is to post answers I am asked by the press in that capacity, because the amount of information that can be conveyed by a newspaper is necessarily limited. On Monday March 27, I received the following questions from Dan Johnson, a reporter for the Sonoma Index-Tribune (Sonoma County has three "major" newspapers, the I-T, the Petaluma Argus-Courier and the Santa Rosa Press Democrat, all of which are owned and controlled by the same company). I have printed his questions and my written answers to them below. The questions concerned the realignment of our District, which is often reduced down in practical terms to which schools sites will continue to operate, and which will not, given declining attendance. 

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 1. During the portion about School district reconfiguration, did the board decide to end student enrollment at Dunbar and enroll its students at other districts beginning in the 2023-24 school year? Was a vote taken, and if so who supported and did not support this?

 No. The agenda was changed at the start of the meeting, and that item was struck on a 3-2 vote. Trustees Knox, Winders and I voted to strike the item.

 2. Were any other decisions made regarding reconfiguration of the district in 2023-24 or any subsequent years?

 No.

 3. What did you feel were the main points made during the Perkins-Eastman presentation?

 The trustees, after extensive discussion, focused on Scenario 1A provided by the Perkins Eastman consultants, which would see the Dunbar campus made available to Woodland Star Charter, with middle schoolers at Altimira, and Prestwood remaining open. This would be the 3-1-1 alignment discussed previously, where the three District elementary schools would be Flowery, El Verano and Prestwood, the middle school would be at the Altimira campus, and the Broadway site for SVHS and Creekside. I have attached the "skittle" graphic illustrating this alignment below.

 The board gave direction to staff to answer two questions at the April 20th meeting, first, what are the costs to retrofit Altimira as estimated by the engineers versus the costs to expand Adele Harrison, and second, what are the pros and cons, and costs, of moving to a 7-8 middle school model, with 6th graders remaining at elementary sites. The board gave direction to staff bring a motion for the trustees to act on April 20th to realign the District in this fashion, with discretionary language included regarding choosing Altimira or Adele as the District's middle school, and with discretionary language included regarding shifting to a 7-8 middle school model. The Board also gave direction to staff to implement the timeline over two academic years, with the Dunbar campus being addressed in academic year 23-24, and the remaining realignment in academic year 24-25.

 4. During the school safety discussion, did the board discuss whether or not to bring the SRO program back? Was this topic agendized for the April board meeting?

 In the proposed scenario, what would happen to Sassarini, Adele Harrison and Sonoma Charter School? No, the board did not discuss whether to bring the SRO program back. No, the topic was not agendized by the board for April 20th. Staff informed the trustees that there is a trustee request that the SRO be agendized for April 20, and I believe the request is from Trustee Landry.

 5. What did you feel were the main points made during the school safety discussion?

 The materials for that agenda item were not provided in advance to the trustees. This violated our norm of "no surprises." Further, there was no description of the item in any way, including the minimal description required by the Brown Act. The materials were also not provided to the public in advance. These procedural failures necessarily limited discussion. There was no explanation offered by the Board President for why the item was added to the agenda without this routine and ordinary requirements being met. 

 In the room, Director of Educational Services Jillian Beall gave a presentation on statistics regarding incidents of student discipline, which are down by 58% this academic year versus last. However, suspensions are up by 11%, and there have been five (5) expulsions, versus just one (1) in the previous academic year. 

 Sonoma County Sheriff's Office (SCSO) Lieutenant Brandon Cutting (who also serves as Sonoma's Chief of Police) gave a report on handling emergencies at SVUSD campuses, including discussing the general aspects of the prepared responses of the SCSO to school sites located in the County portion of SVUSD, and then in the City. The specifics were not included for operational reasons. Because the meeting ran quite long the agenda item was concluded at approximately 2:45 without discussion of the SRO and without any listening circles being conducted regarding school safety. 

 6. Would you like to say anything else?

 On March 9, and again yesterday, members of the public showed up and treated the school board meeting as a "sporting event," cheering and booing positions with which they supported or disagreed. This is unacceptable behavior from members of the public. The Board President must instruct members of the public to either maintain decorum or excuse themselves from the room, especially when she agrees with their position. Individual school board members should never have to use points of order to ensure effective uninterrupted conduct of the meeting, which indeed did happen on Saturday.

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 Shortly thereafter, Dan Johnson asked the following additional question, which I answered as well.

 7. In the proposed scenario, what would happen to Sassarini, Adele Harrison and Sonoma Charter School?

 The trustees requested a motion be prepared that is specifically focused on what facilities will be used by SVUSD for its existing instructional program, with an emphasis on cutting waste. The board gave no direction for a motion to be drafted to repurpose any of the sites you referenced and I do not expect such a motion on April 20.

Slouching Towards Utopia.

Brad DeLong 

One thing I like to do from time to time, is recommend a good book. Brad DeLong has been an economics and history professor at UC Berkeley for a long time, and I have enjoyed reading his posts. He has recently put together many of his thoughts in a book, Slouching Towards Utopia, which I am reading and recommend to anyone interested in the history of the "Long 20th Century" from 1870-2010. The Economist's very positive review of the book is here.

Brad DeLong has come up on this blog before -- here's a list of the times I've mentioned him previously:

1. Paul Krugman: "Brad, Don't Get Too Excited."
2. QE4.
3. Brooks and Krugman.
4. Nothing So Dear as #cheapmoney 
5. Le Mieux est l'ennemi du Bien.
6. @RobertJShiller and the #EMRATIO.
   

The Life Pressed Out.

 George Floyd was murdered May 25th, aged 46. Suffocated by a Minneapolis police officer over the course of 8 minutes and 46 seconds, his death has rightfully become a rallying moment for Black Lives Matter. Many (but not all) are astonished that three police officers stood watch as he was asphyxiated. Protests against police brutality and police killings of black people, and broader issues such as racial profiling, and racial inequality in the United States criminal justice system, continue with cause. 

"The Life Pressed Out"

Obituary, George Floyd

The Economist, June 4, 2020

available at https://tinyurl.com/yagm25jm

 In this kaleidoscope of horror, though, one fact in particular stunned and shocked me. For George Floyd knew Derek Chauvin, the police officer that killed him. They were coworkers.  Both were employed by the El Nuevo Rodeo club, a Latinx music venue in Minneapolis. George was known in the workplace for his calm manner, big smile, and physical presence. Chauvin, who had done the job for 17 years, was described by Ann Wroe of the Economist as "an off-duty white police officer with jittery eyes, who would reach for his pepper spray as soon as a fight broke out and fire it over everyone."  More than mere corruption, worse than the principal-agent problem, did Chauvin strike to settle a grudge, believing in protection from the Thin Blue Line? 

 The use of government authority and power for personal ends is the genesis of so much that is disquieting about the past two decades of American public life. But the events of May 25th must not recur.  An officer sworn to protect the public "dragged [George] aside, threw him to the ground helpless and then, for almost nine minutes, knelt on his neck, pressing, pressing as [George] cried out for his mother and his breath and his life. [George] possibly never knew that this was the same white guy with jittery eyes who had worked El Nuevo Rodeo, the one so ready with the pepper spray to keep the blacks in line." 

 But we know. And we can act. But it requires the efforts of all. As former President Obama noted, "the elected officials who matter most in reforming police departments and the criminal justice system work at the state and local levels[.] Review your use of force policies with members of your community and commit to report on planned reforms[.] Change America and make it live up to its highest ideals."

 One of the 13 guiding principles of the Black Lives Matter movement is a commitment to restorative justice, a vehicle for decarceration in the United States. In criminal cases, victims can testify about the crime's impact upon their lives, receive answers to questions about the incident, and participate in holding the offender accountable. Meanwhile, offenders can tell their story of why the crime occurred and how it has affected their lives. It's not a panacea, and real limitations exist in the context of domestic violence and racism. But it many cases, the conflict in the community calms.  

Sonoma Valley Equity & Inclusion Task Force, 2016

Report available at https://tinyurl.com/ybo9tyg6

 As Sonoma Valley Unified's Equity & Inclusion Task Force pointed out in 2018, "recent best practice for discipline in schools has included a movement toward incorporating restorative justice practices. Restorative justice has been shown to be an effective alternative to punitive responses to wrongdoing. Inspired by indigenous traditions, it brings together persons harmed with persons responsible for harm in a safe and respectful space, promoting dialogue, accountability, and a stronger sense of community." The Task Force noted some past attempts by SVUSD to implement restorative justice practices.  "However none of these attempts resulted in across-the-board implementation of the practice. While there has been some training for staff, without full implementation of the practice that includes appropriate allocation of staff, policy development, and training, change has not occurred."

 It's time for full implementation. Restorative justice practices, such as the one utilized by the Los Angeles School District, show significant decreases in suspensions. The LAUSD posted a 92 percent decrease in the number of days lost to suspensions as a result of its restorative justice program. As our Task Force noted, "[t]hese statistics are especially relevant to this [D]istrict that has a disproportionately high level of low [socio-economic status] students who are suspended and/or expelled.”

 We have the power in our Valley to make this change, and democratic self-governance starts with each one of us participating in bringing about a better shared future.  The way has been shown and the report of the Task Force is ready for implementation. Let’s make it happen. After all, it’s the least we can do to honor George Floyd's life. 

@noahpinion on how Colleges affect Communities.

I tend to spot articles over time that I can tell will have some future relevance, but I can't always put my finger on it.  A good example of why saving copies of such pieces is important is here -- I didn't know what to make of that oil price article in 2012, but I certainly did by the end of 2014.

Similarly, I am linking to an article today from March, that I had thought would be part of a more complicated piece.  It's from Noah Smith, a former finance professor who blogs himself professionally for Bloomberg. The piece is interesting on its own merits because so many of us seem to think of a college as a place that educates the local population, and because, in true academic fashion, Noah points in a different direction:

"... ideas and technology leak out to surrounding businesses in myriad ways ... [a]cademics consult for local businesses. [Staff] start local businesses of their own. Companies ... hire smart people away from... campus jobs. [Colleges] provide forums for local entrepreneurs, inventors and academics to meet each other, exchange ideas and offer employment ... [h]igh-productivity technology businesses therefore tend to cluster ... in order to take advantage of the rich flow of ideas and skilled workers. That, in turn, draws smart educated people from other regions, boosting productivity and raising wages even for less-educated locals."

That the impact of an educational institution is, economically, in many respects due to the private-sector activity it influences in the surrounding economy, rather than the degreed individuals marching out the door in regular intervals, is I think a key to understanding the intuitive interest so many have in the fate and future of their local schools and colleges, beyond whether they or their children did, will, or do attend at any given time ...

Casa Del Maestro, Pt. 1. #teacherhousing #sonoma

"Casa Del Maestro"
3380 Lochinvar Ave, Santa Clara, California
image available at http://tinyurl.com/htm8n2z

On Monday, the Press Democrat’s editorial board described a “brewing fiscal crisis” for Santa Rosa's schools, who must, as of their first interim report for 2016-17, implement a ~2.2% budget cut going forward.  SRCS is confronting flat enrollment coupled with declining rates of return on pension funds, that will increase budget pressure over the next four years. At least one board member’s suggesting a parcel tax in response.  

The editorial describes a problem familiar to Sonoma Valley Unified. SVUSD will implement a ~5% budget cut in a similar fashion to SRCS. While Santa Rosa must deal with a 1.6% reserve reduction due to an accounting error, and Sonoma Valley's audits have consistently been clean, it is the medium-term funding squeeze, with costs rising substantially faster than revenues, and an increasing inability to make up the difference via one-time funds, that’s driving concerns. SRCS' potential pursuit of a parcel tax is one solution that certainly appears to be on the table, but it could cause voter confusion, if not outright fatigue, given Santa Rosa's successful $229 million bond in 2014. As Jenni Klose, president of the SRCS board noted in a letter to the editor today, "[SRCS], as with all California districts, is simply wrestling with how best to meet its increased pension obligation while continuing to fairly compensate staff[.]" 

Sonoma Valley, grappling with the same situation, should investigate creating structural, long-term advantages to ensure our teachers and staff aren’t crushed between stagnant funding and our ever-rising cost of living. Housing remains the single largest expense for many teachers and staff, whether laterals or new graduates. Meanwhile, those further up the step-column need salaries that can pay for mid-life expenses, such as children starting college. Addressing one issue means more’s available to deal with the other. Much as our schools confronted rising power prices by getting on the supply side of the equation with solar panels, so too should our district pursue construction of high quality, reasonably priced teacher and staff housing, an advantage in recruiting and retention independent of state funding.

2.83 acre Sonoma Valley Health Care District Property

432 W MacArthur, Sonoma, California
image available at http://tinyurl.com/joonh66

Serendipitously, Sonoma Valley’s health care district must make a decision regarding 2.83 acres on West MacArthur in the next 18 months. The land is four houses from Sassarini Elementary, and down the street from the SVHS/Adele/Prestwood campus.  Due to some (very) recent changes in the law, SVUSD has an opportunity to pursue a teacher housing project there, before the main front of the financial storm hits our budget.

The model for such housing is Santa Clara Unified’s Casa Del Maestro. Commenced in 2002 on a previously closed middle school, the project utilized certificates of participation to fund construction of 70 units, subsequently rented out to teachers and staff via a functionally integrated public charity. Construction was done at market rates. No subsidy was involved. One bedroom apartments rent for ~$900, and a large two bedroom for ~$1,450 (typically $2,390 for one in Santa Clara, $2,930 for two).

The cost advantage has four parts. First, the District owns the land, and thus land costs are not included in the cost of ownership or operations. Second, the capital structure allows for tax-exempt finance. Third, the land and construction are both property tax-exempt. Finally, there is no profit -- rents are set at a level sufficient to pay back costs of construction, financing, maintenance and operations, and to fund a long-term reserve.

Former Cal. State Sen. Mark Leno
image available at http://tinyurl.com/zbw9tum

Despite such success, few K-12 housing projects have gone forward since, due to an aura of legal uncertainty. Is restricting residency to teachers and staff consistent with California’s Unruh Civil Rights Act? Can land held in educational trust be used for teacher and staff housing? Can Certificates of Participation be used to fund construction? Can schools cooperate with other agencies on projects? Are there legislative findings that the housing crisis is hitting teachers and staff?

We got our answer January 1. Mark Leno’s SB 1413, known as the “Teacher Housing Act of 2016,” codified at Health & Safety Code § 53570 et seq., provides the express authority to proceed. The law’s factual findings and statutory language gives the same type of guidance for K-12 districts long available at the junior college, CSU, and UC levels. Doubts regarding limiting the rentals to teachers and staff, about the use of lands held in educational trust, and the availability of innovative financing and intergovernmental cooperation were all addressed.

2.83 acre Sonoma Valley Health Care District Property
432 W MacArthur, Sonoma, California
image available at http://tinyurl.com/gtmavhq

And this brings us back to the 2.83 acre parcel. Ideally located, the site is nearly identical in size to the Casa Del Maestro. It’s within walking distance of supermarkets and the Sonoma Square. The neighborhood already has several master planned facilities (Village Green, Sonoma Hills, Pueblo Serena, Moon Valley). Further, the school district has broad powers available to support the project, given the financial flexibility of the authority granted by Health & Safety Code § 53573.

What of the hospital, the current owner? Hospital sites must be “multi-decade,” allowing new buildings to be constructed as others pass from use, like a wave traversing the property over decades. For now, the MacArthur parcel is surplus to requirements. But the two districts could allow for a future exchange of land with fair compensation. The Andrieux site could become housing and MacArthur a hospital, when contemporary structures reach their end of life.

There are any number of problems that could interfere with teacher housing at this site (or another), but the rough contours are clear.  Making sure teachers and staff can afford to live in our community was the first item I discussed when walking Sonoma door to door this past fall. There are few more effective proofs of the power of small-town cooperation, especially in the face of discord we now witness washing over our small valley.  Let’s get our government agencies talking about working together, and let's set an example, by having our health care and school districts discuss how they might make this land continue to serve the public interest for decades to come.

@SVHSDragons @SVUSD1 #SonomaValley College Readiness Going Up.

It's a day of sorrow, and for the acknowledgment of tragedy for Sonoma Valley's school district. But it's important to remember that great work is being done overall in our public schools.

Per Person Income vs. College Readiness, California Counties.

Sources and methods available here.

PDF version available here.

In particular, this year has been a strong one for SVUSD, because both governmental and commercial measures indicate our schools are having increasing levels of success.  For instance, US News & World Report found that Sonoma Valley's College Readiness Index, at 36.7, is now exceeded by only three Napa-Sonoma area schools: Maria Carrillo, Casa Grande, and Roseland University Prep.

This result is confirmed by State measures of performance, as the graph on the right shows. In general, Sonoma County rates poorly given what's expected for a county of its wealth. It is one of the clearest and worst under performers.

But Sonoma Valley is different.  SVUSD does 40% better on preparing students for college than the rest of Sonoma County. Sonoma Valley now outperforms Napa as well. SVUSD deserves a lot of credit for turning in such a strong result.

One of the best things about working for the past couple of years with the District's trustees, our very strong Superintendent, and so many dedicated principals and teachers, is that it gives some context concerning the regular and sustained progress being made.

@eloisanews, nice article on #Sonoma grad rates ...

Eloísa Ruano González
image available at @eloisanews

So, I don't personally know Eloísa Ruano González. I do read her articles via the Press Democrat from time to time, though.  Her writing caught my eye earlier this year regarding Cloverdale High; recently it was a piece about graduation rates in Sonoma County overall. I'm typically favorably disposed towards education writers, particularly those that focus on the interplay between education and economics, and so I'm very supportive of Eloísa for focusing on statistics for the different parts of Sonoma County.

Of course, a well researched article on an important subject often makes people want more of the same, and I thus wonder whether an article on the County's A-G graduation rate might now be a good idea, too. For those who find education jargon impenetrable, that's the difference between whether a graduate has or has not met the college entry requirements for the University of California ("UC") or for the California State University ("CSU"). The technical requirements of A-G completion are complicated, but can (very roughly) be boiled down to passing the second semester of Algebra II with a C- or better.

Most parents and voters think that a graduate's a graduate, and that anyone receiving their diploma is ready for college, but that's not necessarily the case.  And that's where Sonoma County seems to have trouble, because while the statewide rate for A-G is 43.4%, in Sonoma County it's only 33.7% (for my friends and neighbors reading this post, Sonoma Valley High's rate is 47.2%).  I feel like I'd really like to see our educators explain the overall rate of preparation for college being achieved by Sonoma County's high school graduates to a reporter like Eloísa ...