Education Matters: DMUSD’s tug-of-war

Although Del Mar Union School District Superintendent Holly McClurg announced at the May 23 school board meeting that a General Obligation bond is no longer being considered, apparently it’s not off the table yet.

Since then, she said she has received “significant input” from community members from all parts of the district asking the board to continue to pursue the Facilities Master Plan (FMP) and GO bond.

McClurg said she was asked repeatedly, “Is there any way a measure can still be placed on the ballot?”

There’s a real need for a new school in Pacific Highlands Ranch, but finding a way to pay for the land and construction is a thorny challenge.

Another obstacle concerns the two schools west of the I-5 freeway.

Many residents don’t want Del Mar Hills School demolished and the land sold off, and are also resistant to the idea of tearing down both schools on the west side and erecting one “mega-school” to accommodate all K-6 students living west of I-5.

McClurg said residents on the west side expressed concerns about the Hills property, asking what it will be if it’s not a school.

She said the district needed more time to revise the FMP – with “more definition about the Del Mar Hills property, specific to not having the intent to sell the property.”

She did advise the board in April not to proceed with the FMP as presented, but added, “It does not mean the ideas in there were not supported by the community.”

Since then, McClurg said trustees “gave direction to DMUSD staff to place the 2018 Facilities Master Plan on the June 27, 2018 governing board meeting agenda and include modifications that address usage of the property at the Del Mar Hills Academy location.”

What’s on the agenda for June 27 (after this column’s deadline) is the FMP “with modifications added that specify that the district address potential usage of the Del Mar Hills Academy property.”

“We continue to go through the processes of developing the master plan,” McClurg said. “If we don’t have a Facilities Master Plan that is approved, we cannot move forward” with a measure on the ballot.

She said the board “has never taken the bond off the table” and has until August 10 to make a final decision.

“I want to make sure that if the board places the measure on the ballot, we have all the pieces necessary to do that,” she said.

Options that community members are bringing forward will continue to be part of the conversation, McClurg said.

The district and board face a challenge if they decide to proceed with a GO bond on the ballot this November, given that a recently conducted survey showed limited enthusiasm in the district for passage of a bond.

“A district-wide measure at the current level of support has significant risk of not passing,” said the district’s consultant in February.

Reserve funds

Whether the bond is on or off, understanding the budget and the district’s reserve balance is useful.

To this end, DMUSD Assistant Superintendent of Business Services Cathy Birks presented budget information that was clear and informative, and is worth sharing.

The DMUSD has a budget for 2018-2019 of $57 million, with about 20 percent in reserves (about $11.4 million).

Although that seems like a lot, here’s how it breaks down:

The state requires 3 percent in reserves which is about $1.7 million. The district’s Board of Education requires 15 percent in reserves which is about $8.6 million.

Together, that 18 percent is about $10.3 million. With $11.4 million in reserves, that’s a difference of about $1.1 million.

Birks said she’s earmarked about $1 million for required contributions to California’s State Teachers Retirement System and Public Employees Retirement System (STRS and PERS). That accounts for the reserve balance.

Many Basic Aid school districts like Del Mar (those receiving the bulk of their revenue from local property taxes) are often criticized for having excessive unrestricted reserve funds, particularly when those districts try to pass ballot measures to tax local homeowners for more money on top of what taxpayers already pay.

But holding 15 percent of its budget in reserves is commonly advised for Basic Aid districts.

“Because DMUSD is a community-funded school district (Basic Aid), the 15 percent reserve is to protect the district during times of economic uncertainty and the fluctuations in property taxes,” Birks said in an email.

It is possible to spend money in reserves if necessary, but “the board would have to approve the reduction in the reserve balance,” she explained, adding that the reduction to the reserve “should be for a one-time expenditure.”

That means it’s not to be used for salary increases or any other purpose that is an on-going, irreversible expense.

New district office

Ten years ago, when the district was searching for a new district office, I wrote a column suggesting that Del Mar Hills would make a perfect district office that could also serve students in grades K-1 or K-2, with nearby Del Mar Heights School serving students in grades 2-6 or 3-6.

This would have united the community by placing all west-side students together for all seven grades, with plenty of room for a district office without having to purchase additional property.

Having two K-6 schools west of I-5 competing with one another for students never made much sense.

In my May 31 column last month, I related a bit of this history and concluded by saying, “Alas it was not to be. And now there is no going back.”

But perhaps that’s not quite true. Could it still be done?

If the district were to sell its Carmel Valley office property that it purchased in 2010 for $4.3 million, this could significantly pad the district’s available funding (once adjusted for current value). With some creative thinking and drive, perhaps that old idea might be revived.

Mello-Roos

Some residents have challenged the district’s claim that there’s not enough money collected from Mello-Roos property taxes to pay for a new school.

But Birks and McClurg say it’s true.

“None of our schools have been paid for through Mello-Roos money alone,” McClurg said.

Birks said Community Facilities District 99-1 (which includes the Pacific Highlands Ranch area) partially funded the land acquisition and construction of DMUSD’s Sycamore Ridge School.

CFD 99-1 is also accumulating taxes for the land acquisition and construction of the proposed elementary school in Pacific Highlands Ranch, she said.

But important to note, for homeowners who believe all their Mello-Roos taxes are set aside to pay for a new school, is that a portion of that money is allocated to pay principal and interest on the debt service.

“There is not a sufficient amount of funds in the CFD 99-1 to purchase the land and to construct an elementary school at the proposed school site in PHR,” Birks said.

Money raised through a GO bond, by the way, is not to be used for ongoing repairs or other general maintenance. Rather, a deferred maintenance fund serves this purpose.

“The district continues to allocate approximately $135,000 annually from the General Fund to the Deferred Maintenance Fund,” Birks said. The current balance is approximately $478,000.

Tug-of-war

There’s something about the culture in Del Mar that historically lends itself to an adversarial attitude – often with east and west at odds, but at times school vs. school.

It’s curious when compared to nearby Solana Beach where the school district encompasses many disparate communities – including Solana Beach west of I-5, Solana Beach east of I-5 off of Lomas Santa Fe Drive, Fairbanks Ranch, Hacienda Santa Fe in Rancho Santa Fe, Carmel Valley, and Pacific Highlands Ranch areas.

Yet the Solana Beach School District came together to pass a General Obligation bond in 2016 by a large majority. And that was with a substantial amount of money in its reserves.

The reason why Del Mar is different is elusive.

McClurg said she is receiving different messages from different communities, but stressed that the school district is one large community with common interests.

“The one way we can be whole is through a school district, because we are one school district,” she said.

It is inevitable that the district and school board will upset some residents, no matter what they decide to do.

But instead of playing tug-of-war with whichever faction happens to be pulling harder on the rope, DMUSD leadership needs to make some hard choices soon – and stand by them.

“These are not easy decisions,” McClurg said. “It does take a process, and it should take a process.”

“This is a very important time in our district. Some really important decisions need to be made, and everybody needs to be a part of it,” she said. “And we’ll get there.”

Opinion columnist and Sr. Education Writer Marsha Sutton can be reached at suttonmarsha@gmail.com.

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