Oakland Schools in Turmoil After 2 Key Officials Depart Over Budget Crisis

Last week, tensions in Oakland’s school district over how to stave off a massive budget shortfall came to a head when the district’s top financial officer abruptly resigned, and its chief of staff was terminated.

Lisa Grant-Dawson, who was brought into the Oakland Unified School District in 2020 to lead it out of two decades under state oversight, submitted her resignation on Friday, she told KQED. That same day, Chief of Staff Dan Bellino, who’s been with the district since July, was released by interim Superintendent Denise Saddler without warning.

While Bellino confirmed he’d not been given cause for the termination, Grant-Dawson said her decision to leave came after she and Bellino, with other colleagues, led a weekslong budget planning effort to right a $102 million budget deficit projected next year, and planned to present last Wednesday.

But two days before the presentation, she said, Saddler revealed a different plan, crafted without the budget chief’s knowledge.

“I learned on Monday morning that the superintendent sought to lead in a different direction with the budget scenarios that were ultimately presented to the board. And opted to not inform me and other colleagues in advance of her decision,” Grant-Dawson told KQED.

“What I don’t participate in is side-swiping.”

In a statement shared with OUSD families, Saddler said she planned to bring on a team of external fiscal experts as the district prepares next year’s budget. Former Oakland City Councilmember Lynette McElhaney will take over as chief of staff.

“As superintendent, it is my job to ensure the district has the right leadership structure, alignment and urgency to meet the work that lies ahead of us,” she wrote.

In a statement on social media, Board Vice President Valarie Bachelor said she supported Saddler’s decision, and “her need to develop a Senior Leadership Team that can support our district through the next phase of the work.”

The major leadership shakeup comes after months of tension between Oakland’s school leaders.

Earlier this year, a teachers union-backed board majority overrode adopted budget cuts in favor of a proposal that was ultimately reversed after it threatened to cancel some after-school programs. In April, the same cohort ousted longtime Superintendent Kyla Johnson-Trammel. And throughout the year, the board majority has sparred with district staff about how to address a structural funding shortfall and years of declining enrollment.

That conflict escalated in October, when the board requested staff bring forward two budget proposals to cut $100 million in ongoing expenditures without closing or merging schools, or directly affecting students at school sites.

An initial proposal presented by Grant-Dawson last month identified $21 million in cuts within those bounds. To reach the $100 million figure, though, she said campuses would need to be impacted.

“We’re a school district. And a school district’s majority of its funds are in schools,” Grant-Dawson said at the time.

Since that initial proposal, Grant-Dawson said the senior leadership team had spent many long days developing two plans to realize the other $80 million in cuts necessary to stay solvent next year. She and Bellino had been the main editors of those documents, she said.

“We submitted the version we were working on. The whole team saw it and knew it was being submitted,” she told KQED. “I was notified that there was a change made the next day.”

The proposal that Saddler ultimately presented on Wednesday promises $102 million in cuts through major school site and administrative reductions. But Grant-Dawson said it lacks a roadmap that proves it can be implemented.

“There’s no math or evidence behind it,” she said, adding that she believes ultimately, the superintendent presented a plan that “she felt the board wanted.”

It accounts for a $20 million boost in revenue from growing attendance in each of the next two years. While the district has seen a 1.8% growth this year so far, it can’t guarantee efforts to recruit students will yield those results.

In addition to the $21 million in administrative cuts laid out last month, the proposal also recommends slashing another 15-20% of central office spending, and between 7.5-10% from each campus budget.

To make such large reductions at school sites would likely require cutting programs or staff funded by restricted sources earmarked for specific purposes, which wouldn’t yield savings that can be reappropriated wherever the district sees fit.

Another line item reduces special education funding by “restructuring and reducing outside contracts, management, and programmatic elements,” but there is no description of what services and contracts OUSD could reduce while meeting its legal mandate.

“The reality,” Grant-Dawson said, is “you don’t have a list of $100 million that’s legit[imate].”

To make such large cuts to school site budgets, both Saddler and Grant-Dawson have said the district will have to rethink how many schools it operates.

“From where I sit, there is no feasible or reasonable alternative,” Saddler wrote in her proposal. “The District must be restructured — schools and central offices. If the Board makes a commitment to truly restructure OUSD, it must see it through this time.”

But it’s not clear that savings from that effort could be realized by next fall.

“You can’t just flip a switch, especially when you’re trying to drive that magnitude of the change, in one year,” Grant-Dawson said. “We’ve said that if we’re going to do any restructuring work, it takes at least a year to even plan, engage and all those things.”

The proposal Grant-Dawson said her team had submitted, which was not presented on Wednesday, but was included in the documents given to the board ahead of the vote, suggested that the district might need to borrow money from an external source to bridge the gap as it does that work.

It also remains to be seen whether the school board will follow through on a plan to close schools. In recent years, OUSD’s board has made multiple commitments to do so that haven’t come to fruition. In 2022, the board approved 11 campus consolidations, but reversed them before they took effect the following year.

Grant-Dawson said she doesn’t believe the board has the appetite to take up that work.

“Reading the tea leaves, what I said to the district was, ‘You asked me to help support leading you out of receivership, but I don’t lead people back in,’” Grant-Dawson told KQED.