Sacramento City Unified could get nearly $100 million in budget relief under a new agreement with its teachers union as the district works to avoid insolvency and possible state intervention.
The Sacramento City Teachers Association announced Monday that a newly ratified agreement with the district could provide $97.6 million in fiscal relief while extending the union's contract through June 2030.
Most of the savings would come from changing how Sacramento City Unified pays for retiree health benefits.
"This agreement is an opportunity for us to protect the gains we've made for students in our district while taking significant steps to help the district avoid insolvency," SCTA President Nikki Davis Milevsky said in a statement.
Under the agreement, Sacramento City Unified could tap a special reserve fund with more than $160 million to help cover retiree health costs, which run about $21 million to $23 million a year. SCTA says that change could save the district about $67 million in general fund spending over three years without jeopardizing future retiree benefits.
Another roughly $30 million in relief could come from vacant positions, other general fund savings, Medi-Cal revenue and potential health plan changes.
The deal comes as Sacramento City Unified has spent months trying to close a massive budget gap.
In May, the Fiscal Crisis and Management Assistance Team warned that the district was approaching a "cash cliff" and could run out of money without further action. At the time, FCMAT estimated Sacramento City Unified could ultimately need between $100 million and $130 million in emergency state assistance.
State assistance could come with significant consequences for local control. FCMAT told the district that a state-appointed administrator could assume powers normally held by the superintendent and elected school board.
Sacramento City Unified trustees are scheduled to hold a special workshop meeting Thursday evening at the Serna Center.
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