Del Mar school board discusses possibility of creating School Facilities Improvement District

The Del Mar Union School District board took a closer look at School Facilities Improvement Districts at its Oct. 28 meeting as they consider different ways to generate funds for the district’s unfunded needs.

The unfunded needs from the district’s facilities master plan totals $126 million while the district’s five-year priorities list is about $35 million in improvement projects. The biggest items on the prioritized list include creating modern learning studios at all sites, which would cost about $12 million and replacing 25-year-old portables with permanent classroom buildings at Carmel Del Mar, Del Mar Hills and Del Mar Heights which would cost about $13 million.

Robert Anslow, a bond counsel from Bowie, Arneson, Wiles and Giannone explained that in the simplest terms, SFIDs are a means of conducting a general obligation bond within a portion of school boundaries.

“Only voters within the SFID vote and only the people in the SFID are taxed to pay the bonds,” Anslow said.

The process to determine the boundaries is up to the school board. Once the boundaries are prepared they have to be approved by the county and the state. A resolution of intention must be prepared and a public hearing held before the board adopts the boundaries and forms the SFID to be filed with the registrar of voters for an election.

Anslow said it’s not atypical that a hearing and adoption can all be done in one meeting.

When drawing an SFID boundary, Anslow said the board has to consider how much money is needed and how much the area within the boundary can produce.

“The smaller you draw your SFID, the less area subject to the tax, so you have a smaller revenue base for bond issuance,” Anslow said.

The ballot language regarding what projects will funded by the SFID bond has to be very specific, Anslow said, and a two-thirds majority or 55 percent of the vote is required for it to pass.

The board is considering SFIDs over a district-wide general obligation bond to avoid the “double dip” within the community financing districts (CFDs). The school district has two CFDs in which special taxes are already placed on homeowner’s property tax bill to fund schools and improvements. The district’s CFD 95-1 includes the Torrey Hills and Ocean Air communities and CFD 99-1 covers Sycamore Ridge and the district’s future ninth school if needed.

If they do pursue the SFID route, board member Erica Halpern had concerns about the CFD schools’ needs beyond what the CFD can fund, as they would be excluded from the SFID funds.

Board member Darren Gretler also expressed a concern that they could be setting up a district of “haves and have nots.”

“That’s why community input is so important,” President Doug Rafner said.

Rafner said it would ultimately be up to the community how much of the facilities master plan they would like to see implemented, which would inform any decision about going after a SFID or GO bond. He said the district should consider beginning the outreach process.

Superintendent Holly McClurg noted that the district can and does assign general fund monies for projects that need to be done—in the case of the Carmel Del Mar modernization, they opted to dip into their reserves. She said the district just does not have access to the millions it would take to meet all of its unfunded needs.

The district’s last attempt at a GO bond, Prop CC in 2012, was for $76.8 million. It received 53.7 percent of the vote, short of the 55 percent approval rate required.