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Board hears city proposal to split rainy‑day reserve and give SFUSD greater draw authority
Summary
Staff described a proposed charter amendment package that would split the City's rainy‑day reserve into a city portion and a SFUSD portion (proposed 75%/25% split), allow the Board of Education to request draws to avoid layoffs without prior layoff notices, and change withdrawal conditions; commissioners asked for financial scenarios before committing.
Deputy Superintendent Lee (staff) updated the board on a set of proposed charter amendments introduced at the Board of Supervisors that would affect the city rainy‑day reserve and the proposed Public Education Enrichment Fund (PEAF) reauthorization.
Staff explained the process timeline: three separate charter amendments were introduced by Supervisors Kim, Avalos and Yee on April 29 (meeting the May 20 introduction deadline). Per city rules, the measures are subject to a 30‑day holding period and will likely be taken up in the Board of Supervisors' Rules Committee in mid‑June; the deadline to submit adopted charter language to the Department of Elections for the November ballot is July 25.
The substantive proposal discussed would split the existing single rainy‑day reserve into two separate sub‑reserves: the city portion (75%) and a district portion (25%) from the current balance, with future deposits similarly split. Under the draft language staff presented, withdrawals from the district reserve could be authorized by the Board of Education (with technical certification by the City Controller), rather than requiring an appropriation by the mayor and Board of Supervisors. The draft would also allow the district to draw funds to avoid layoffs without requiring layoff notices to have been issued, and would increase the allowable percentage the district could withdraw from its portion (an example change in draft moved the district maximum from 25% to 50% of the district portion in a given draw). Staff characterized these changes as designed to remove incentives to issue layoff notices and to give the district more predictable access to funds when revenues decline.
Commissioners debated trade‑offs. Several members welcomed the ability to use funds to avoid issuing layoff notices, calling it a humane and practical change. Other commissioners raised the realistic risk that splitting the reserve could result in the district having less absolute money available in some scenarios — a ‘‘bird in the hand versus two in the bush’’ trade‑off — and asked staff for comparative financial scenarios showing what the district would have received historically under current law versus the draft split. Commissioners also asked staff to explicitly exclude charitable or third‑party PEAF revenues from rainy‑day calculations; staff agreed to incorporate clarifying language.
Staff said these options were discussed with city officials, including the City Controller, and that the proposals remain drafts. They invited the board to identify specific edits to propose to supervisors before the measures reach committee. The board requested additional fiscal scenarios and signaled urgency because the supervisors’ timeline could produce committee action in June.
