The Reckoning: Board President During California's Largest School Bailout
In mid-September 2002, Kerry Hamill Katz — then President of the Oakland Unified School District Board of Education — received Oakland Superintendent Dennis Chaconas at her office under circumstances that no board president wants to face. Chaconas and his chief financial officer had discovered a $27 million hole in the district's 2001–02 budget. Then came the second blow: the district had failed to set aside money to repay a $40 million short-term loan, apparently diverting the funds to cover payroll. The total liability would grow to an estimated $82 million — the largest school district fiscal crisis in California history.
The irony was devastating. Chaconas had delivered genuine results. Oakland had become the first urban district in California to pilot the "small schools" model. Test scores were rising. A 24 percent teacher salary increase had finally ended the district's brutal teacher shortage. Thousands of parents, principals, and community members rallied to defend the superintendent they credited with transforming their schools. Into the middle of all this came the financial collapse — not from the program spending, but from years of faulty budgeting, unreliable accounting systems, and mismanaged cash flow that predated Chaconas's tenure.
As board president, Hamill's role was not to investigate or prosecute — it was to govern: to ensure the crisis became public, to work with state officials as Alameda County schools chief Sheila Jordan declared the district headed for bankruptcy, and to support the process that led Governor Gray Davis to approve a $100 million emergency state loan in June 2003 — the largest school bailout in California history. The state simultaneously appointed an administrator, effectively making the board advisory. Hamill stayed on the board through the transition, protecting the community relationships and academic programs that had been built during the Chaconas years.
She did not flinch from accountability. When the New York Times covered the story in June 2003, Hamill was among the board members identified as having confronted the crisis directly. Her comment, recorded in multiple accounts, reflects the instinct of a former journalist who has spent her career insisting that the public deserves to know what is actually happening: the crisis needed to be aired, not hidden, so it could be fixed.
Impact & Legacy
The 2002–2003 OUSD fiscal crisis reshaped how California monitors school district finances, and the community's fight to preserve the academic gains made under Chaconas — small schools, the teacher raise, improved test scores — largely succeeded. Kerry Hamill's leadership during the crisis demonstrated that transparent governance, even in the worst circumstances, is both possible and necessary. Sources: SF Gate, Feb 2003 · NYT, June 2003.