Capistrano Unified's Fiscal Solvency at Stake, Report Says

The school district won't have enough money to close out the year and may need to take out short-term loans until the state pays it back next fiscal year. Meanwhile, the budget outlook does not factor in potential mid-year cuts.

The financial outlook for continues to be dire, and that’s before the state possibly pulls the trigger on mid-year cuts.

The Board of Trustees approved a report 5-2 with trustees Ellen Addonizio and Sue Palazzo in dissent, indicating that the district may not be able to maintain fiscal solvency this year or in the next two years to come.

“We’re still in that same position of having quite a bit of ambiguity,” Ron Lebs, deputy superintendent of business services, told trustees. “It seems every report I’ve given since coming to Capo [three years ago] has involved ambiguity and uncertainty.”

Officials are scheduled to announce by Thursday whether the automatic cuts the Legislature built into the budget in June will kick in, now that the rosy projections on which the budget was based never materialized.

K-12 education is scheduled for a hard hit – as much as $1.1 billion – if tax revenues fall $2 billion short. The Sacramento Bee has reported that the state is already $3.7 billion behind.

For Capistrano Unified, mid-year cuts could mean the trustees would have to slash $14.1 million from this year’s budget, Lebs said. Without such drastic action, “we won’t make it through the year.”

However, the report did not factor in mid-year reductions into its bottom line. It did account for and instead put that money in county coffers.

The money grab, however, is more of a cash-flow problem than permanent red ink for the district because the state is supposed to make the district whole, Lebs said. The problem is, the state won’t send that money to Capo until July and August, after the district closes the books on 2011-12.

“We didn’t reduce revenues. It’s just a timing issue,” said David Carter, executive director of fiscal services.

Trustee Anna Bryson said she does not have confidence that the state will ensure the district gets its full share of property-tax dollars.

“We have no guarantee they’re going to backfill us this year. … The people in Sacramento, the majority does not care about the children of Orange County, which I find infuriating,” Bryson said.

If the county follows through with its plans, the district will be $21.3 million short by the end of the year, Lebs said. To address that, he is working on a plan to do a cross-fiscal-year loan, he said. The school district is already borrowing $75 million this year in bridge financing that must be repaid in full by April.

“That’s a significant challenge for us,” Lebs said.

Trustee Lynn Hatton said she’s ready to lead the charge up to state Capitol and give the politicians there a piece of her mind. “I feel we talk about it here, but that’s not getting up to Sacramento.”

Going beyond this year’s predicament, Lebs said the district is facing a $25 million shortfall in the 2012-13 school year and another $3.5 million the following year.

But it could get even worse, he said. There’s talk of making the possible mid-year cuts a permanent reduction to schools, not a one-time occurrence as currently written into the budget. If the state also eliminates the district’s cost-of-living adjustments built into the budgets each year, the consequences could be “pretty grim,” Lebs said.

OC Mom December 16, 2011 at 11:14 PM
This sounds like a wonderful idea. Get rid of the OC Department of Education too. We have too many redundant bureaucracies that we can no longer afford. Capo has done some good in approving some new choices in Education. They approved Community Roots Charter School, Oxford Prep Charter and it looks like the new Mandarin Emmersion program will start next year at Bergeson Elementary. Capo needs to run the rest of its schools with the same kind of creativity, parental involvement and fiscal responsibility that these newer schools bring.
OC Mom December 16, 2011 at 11:24 PM
Someday she'll wake up and realize that although parents may nod their heads like they are in agreement with her they really aren't. They just don't want their kids to be mistreated so they pretend to agree with what she says. There are a lot of parents in CUSD who are dissatisfied with the quality of education in our district. Those who can afford to have their children attend private schools or they homeschool them. Those who can't afford those choices are getting fed up with the mediocre education and applying for Charters. Education is changing and Jolly needs to see that it's never going to be the way it was again. California Prepatory Academy is opening next year in CUSD as a primarily online public High School. One more choice for parents and students in CUSD. Choice is good, competition raises the bar and hopefully will increase the quality at all of our CUSD schools who'll have to compete for students.
OC Mom December 16, 2011 at 11:28 PM
Exactly RSM dad. Somehow teachers think they are above living in the reality of the Average Joe citizen. If they actually had to keep their jobs based on performance like private sector workers they'd be totally stressed out and putting in a lot more hours. We'd see the best teachers rewarded with raises and those mediocre chair warmers standing in the unemployment line.
shelly December 17, 2011 at 02:43 AM
OC mom, I thought you were all about choice so why criticize others for appreciating the public schools they choose. My 4 children attend 3 public CUSD schools. My oldest is going to graduate with honors. He will graduate from CUSD taking 7 AP classes that will be accepted as college credits at varying levels. He and many, many of his peers are successful students and have bright futures ahead of them. I volunteer and am actually friends with my children's peers parents. I don't hear the complaints that you are voicing. I am open to everyone having a choice and for alternatives to education. Do I think my choice is better than yours. No. I am happy with my choice and many, many parents are or else you would see many, many people going to meetings and voicing their unhappiness. This is not occurring. People are not afraid to voice their opinions, suggestions or even complaints. Parents are protective of their children and if they feel they are not getting what they want we would hear it in droves if our schools were so bad. This is not occurring.
shelly December 17, 2011 at 03:03 AM
OC Mom, How do you think average Joe citizen would do in a class of 35 13 and 14 years olds? 35 kindergarteners? 35 1st graders? A class for special needs children? 30 plus children just learning the language? AP calculus? drama and arts teacher and coaches who are actually at the school for sometimes 10 to 12 hours a day and on weekends? How will average joe citizen manage the classroom, control the classroom and effectively teach these children what they need to learn. I have immense respect for teachers and what they do. They are responsible for teaching our future citizens. What job is more important? I know some people will say doctors or something else but these people did not become who they are without the influence of a teacher. I know that public school teachers made a difference in my life. Ask almost anyone about who were some of the most influential people in their lives and most of them will give you the name of at least one of their teachers. What teachers do is important and relavent. Teachers are not the people whining and sniveling here.


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