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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.

justme December 14, 2011 at 05:10 PM
If teachers did ask what about the children then they would be standing up to their union, they would be for opening the union contracts and reassessing, they would never go on strike for trivial things and they wouldn't fight about getting furlough days or pay cuts or reduced benefits or an increase in their medical costs. If it doesn't get cut from the contract, the only other place is away from the kids hence stealing from the kids. The only people that can force the union to change are the members of the union. But the problem is, you just like to sit back and rake it all in with your double/triple dipping, going on strike, etc. Just like when the layoffs were happening, they suggested either furlough days or layoffs. You refused both. Sorry, you can't have your cake and eat it too. The budget is limited because of the economy. Union workers have to pay the price like the rest of us or California is going to crash harder than it already is. How about at voting time you support reduced spending in the state so the educational budgets could increase. How about when something comes up that you may have to take a cut on, you look at the kids around you who will suffer instead of just looking in the mirror whining about yourself. How about you stand up to your union and tell them enough is enough.
owen callahan December 14, 2011 at 07:05 PM
I would gladly support the teachers more if they would only recognize the failings of their own union.
shelly December 14, 2011 at 07:55 PM
Capo mom, You keep stating that the union took over the board. Can you please tell us who the union trustees are? Trustees Palazzo, Brick, Addonizio and Bryson were never supported by the union. Trustee Alpay did not accept campaign funds from the union while Trustees Prichard and Hatton did. Are you going to continue to dodge this question? How can anyone make decisions when we do not actually know what the budget will be? Are they supposed to just start cutting without actually knowing what is up? What exactly are you suggesting? And do you not think that we have some of the responsibillity to help if we would like to save programs and small class sizes if the money is not there. Why do you say Jollygirl is on the dole. Do you actually know her? Do you know how many years that she worked in the district and for how much? Do you know how many kids she taught or made a difference in their lives. I do not know her but I thank her for choosing a career that contributed to our society. We the public needed her service. Class warfare? You and others keep claiming that it is all the fault of the union and teachers that we are in this budget predicament. Teachers did not bring down our economy so why all the bashing? My suggestions is that since we all want the schools (but maybe you do not I do not know) and programs to survive this economic turmoil, we should all be willing to help and stop the bickering and squabbling.
shelly December 14, 2011 at 07:58 PM
Capo mom, When people blame others and make others a scapegoat for their woes then solutions are hard to come by and bickering and squabbling ensues. History shows that when people stand together and work together to try to find solutions and compromises then solutions arise. Naive? Maybe. But I do believe this.
shelly December 14, 2011 at 09:25 PM
Justme, I am a parent not a teacher or member of a union. I would suggest that you review the facts. The teachers agreed to a paycut and furlough days but the former board imposed a permanent pay cut without negotiating it. The teachers took a cut and are not asking for more right now. They are willing to negotiate for less if necessary. The teachers have not said a word here. If there is less the teachers will take less but it will be enough? What are you willing to do for the kids? Look your kids in the eye and tell them it is all the teachers responsibility and fault and you, as a parent , have no responsibility to help. Are you willing to do this. Pass the buck. These are our children who will suffer if we don't help. I have 4 kids in the district. I see teachers work hard with them everyday. I am tired of teachers getting blamed for other people's irresponsible and selfish actions. They did not destroy our economy. Can you please clarify your statement, "But the problem is, you just like to sit back and rake it all in with your double/triple dipping, going on strike, etc. Just like when the layoffs were happening, they suggested either furlough days or layoffs. You refused both." When did this happen? Who is double and triple dipping? Who are "they" who suggested either furlough days or layoffs? When did the teachers refuse. They agreed. Do you really think teachers are just sitting back raking in money? Really?
justme December 14, 2011 at 09:55 PM
I have reviewed the facts, many times unfortunately. The teachers FINALLY agreed to a paycut & furlough days. You left that part out. As far as the permanent pay cut, um yes as w/the rest of us. I'm sure there is a sentence/two in the contract mandating raises by a certain percentage every so often that will cover them for that. I'm not blaming the teachers for the economy. I'm blaming teachers for not standing up to their unions. I pulled my kids out of CUSD because they kept getting teachers that could give a crap about if they were learning or not. Never will they ever set foot back into any CUSD school. I DO help the situation, thanks for assuming I don't. I donate supplies (not money) all the time to my children's class and the school. I have also donated my time to the school as well. So again, I am trying to help. Double dipping - a state employee who retires from their position, collects their pension AND reapplies either for the same position or a different position collecting that salary AND their pension. There are even cases of triple dipping which are sickening. This happens all too often and is accountable for millions. If you retire, you need to stay retired. You should not be able to go back to another state paid job while collecting your pension, that salary AND start on a new pension. "they" were the school board trying to fix the budget w/out layoffs. It was either layoffs/furlough, teachers threatened to strike either way & you forgot FINALLY agreed
Capo mom December 14, 2011 at 10:07 PM
For every $1 paid in salaries, the district is paying $.32 in benefits. This means that when we say the average teacher in CUSD is paid $78,000, they receive benefits that cost the district that are worth about $25,000. It is more accurate to discuss teacher compensation. The average teacher in CUSD is compensated approximately $103,000 a year for less than 180 days work. And because health care costs will increase and more teachers will retire at higher salaries, the benefit number will only increase with time. Just for reference the median income in OC is about $62,000 for 250 days work. So teachers could certainly see a significant change in their compensation and still afford to live here. Without significant change, our fiscal problems will be ongoing.
shelly December 14, 2011 at 10:36 PM
capo mom, Can you please reference your data. And does the $62,000 that you cite include benefits that these workers receive. I do not believe that benefits and retirement or stock options, 401k plans are factored into the median income data. For example my husband works for a corporations that pays medical and retirement and I do not think that would be included in a survey of incomes. What is the median income in south Orange County and the average mortgage? Does your report tell you whether $62,000 is enough to live and raise a family in South Orange county?
Capo mom December 14, 2011 at 11:05 PM
Just for you shelly, I'll amend my figures with something more current, census figures from 2009 http://quickfacts.census.gov/qfd/states/06/06059.html As you can see there is a lot of data there. You can dig through it and find what interests you. Relevant to our discussion median HOUSEHOLD (not per capita, which is what we are discussing for teachers) income in 2009 was $71,735. County wide per capita money income in past 12 months (2009 dollars) was $33,901 . As I am sure even you will admit, no other profession enjoys the kind of guaranteed benefits that teachers do. You can see that teachers are doing quite well relative to the rest of the county, especially there is more than one wage earner in their household. With step and column guaranteed increases, defined health benefits and a retirement fund that guarantees a 7.75% return on investment, these costs will continue to rise. The rest of your questions hardly matter. The math just can't work. That is why the union "invested" so much money in the last election. But don't worry about them, shelly. Between salary restorations and increase benefit contributions, they are getting it all back from CUSD.
shelly December 15, 2011 at 06:02 AM
Justme, Many of us have not had the same experience as you or your children. I have 4 and they attend 3 different CUSD schools. They have all had good teachers. Not perfect but caring hardworking teachers. And because of this they are doing well. I did not say you did not do anything. I said that in order to fix the issues we are facing we will all need to help. Just how many teachers in CUSD double and triple dip? Do you have data? And if you actually do your research you will find that during the last teachers negotiations they accepted the fact finder recommendations but the former board imposed permanent paycuts. Many donate time, money and supplies to schools because our schools need them and this is what you do when you are a member of a community. As members of a community we should all be willing to help and not expect only some, the teachers, to fix the budget crisis we are facing. Teachers are willing to help but people simply go straight to insults and accusations instead of reasoning and compromise. We should all be in this together instead of the insults and the bashing. People have bought into the rhetoric of todays talking heads. Don't reason just insult. My childrens schools are not "cr&p" and neither are their teachers. CUSD has good schools and great teachers. Teachers are not rich and did not bring down the economy or our districts budget so why all the anger.
shelly December 15, 2011 at 06:19 AM
Capo mom, Teachers make a living. They are not getting rich making this living. They are not well off but are middle income. They are able to support their families and possibly own a home in south Orange County if they have another wage earner in the home depending on how many children they have. Yes some people make less and some people make way more. We have agreed to pay teachers to do a job that we the public need them to do. We, the public decided that we would like our teachers to be educated and trained. We, the public, decided that we would pay them a living wage and benefits to attract and keep qualified teachers. The economy tanked. But instead of pulling together and trying to help one another and our children we look for someone to blame. Instead of working together and compromising and discussing what can be done we name call and become divided. You keep stating how the board is controlled by the union. I have asked you many times to clarify specifically who you are speaking of but you dodge the question. The board has 7 trustees. Four of the currrent trustees (Addonizio, Palazzo, Brick and Bryson) were on the former board and were never supported or endorsed by the union. Trustee Alpay did not accept union funds. Trustees Hatton and Prichard did accept some union funds?
Capo mom December 15, 2011 at 02:08 PM
shelly here are the facts; Teachers in CUSD are compensated at a rate that is 3 times the median wage of the county. Their salaries will continue to increase. They can't be fired. This is true for the good, the bad and the ugly. Teachers can and do live better than most in the county. And their union is a powerful special interest group. It bought the last election in CUSD. And as soon as their board was installed, they went into closed session and demonstrated their priorities. That is how interested they are in "working together" to find a solution.
shelly December 15, 2011 at 03:21 PM
Capo mom, Still haven't answered the question. But that's okay I don't expect you to. Who are the union trustees that you keep blaming for everything. There are 7 trustees. Which of the 7? Teachers are middle income workers. They are not well off or even better off then most of the people in South Orange county. They are middle income. They are able to make a living. We pay them a living wage so that we are able to attract and keep good teachers. They pay taxes and contribute to our economy. Are you saying that we should pay them minimum wage or what? Are you saying that teachers should be struggling? Many teachers are. They are middle income workers and everybody knows it. Do you really believe that people actually believe that teachers are well off and rich compared to others in South Orange County (ladera, talega, dana point, Laguna Niguel, Rancho Santa Margarita, Coto, San Clemente, San Juan Capistrano) really? The economy tanked some people lost their jobs. We still need our children educated. We still need the schools to be open. We still want teachers to work for us. They did not tank the economy. They took a paycut. They are still contributing to our economy and doing their job. So why go after them. Do your children go to public school. Do you believe your children's teachers are selfish and overpaid? When administrators do their jobs teachers can be fired.
shelly December 15, 2011 at 03:44 PM
Capo mom, Why attack teachers? Why not work with teachers who work for us and our children? Why not take a civil approach instead of an accusatory and name calling one? Why not work with the teachers instead of automatically assuming the worst. Our economy tanked and we are slowly recovering. Yes, we will all need to make sacrifices. But to find the best solution we should all be trying to work it out together instead of going for each others throats. But unfortunately this is not the trend of the day. It just seems to be, "get angry, accuse others, get what's "yours" or what you think is yours, you've done enough so don't help." 4 years ago when our house of cards economy was still standing high people considered teachers to be heroes. Now the rhetoric is that they are money grubbing and lazy. They are still the same people educating our kids and in CUSD they are a doing a great job (not perfect but great). The news media outlets are not owned or paid for by the middle income workers. The people who do own them and are partially responsible for our economy's break down changed the focus off of the real culprits and put the blame onto middle income workers. The classwar did not come from the middle income worker. It came from faux news and whoever is paying the talking heads. But we are all responsible for our economy's failure. We should all be willing to help if only to be a good example for our children.
justme December 15, 2011 at 06:02 PM
ok shelly, we just need to agree to disagree here because all I'm doing is repeating what I originally put. The double/triple/however many dipping that is occurring is not limited to just CUSD, it is statewide. And sorry, they do not have a list of dopes that are doing it. The fault that the teachers have in all of this is simple. They don't stand up to their union. They sit back and rake it all in. The only people that can make a difference in how the union operates are the union workers. It is their responsibility to do whatever is in their power to make sure the kids are not being tossed to the side. They don't. It is their responsibility to make sure the focus is on the kids. They don't. If they did, we wouldn't be having this conversation.
shelly December 15, 2011 at 06:19 PM
justme, No, we would not be having this conversation if the economy was still doing well. Teachers would still be everyone's heroes and not the pariahs that everyone would like to make them out to be. After 9/11 firefighters and police officers were heroes also but now we are starting to hear the grumblings about them too simply because they are government employees and part of a union. Not because they have stopped protecting and saving us but because our economy tanked and we need someone to blame. They are still doing a job we, the public need them to do. The talking heads have done their jobs and directed the attention away from the people who brought the economy down and rested the blame onto the shoulders of the middle class workers. The whole purpose of a union is to get the best benefits and working conditions for its members. The job of a teacher is to do the best job he or she can do in the classroom which most CUSD teachers do. We have good schools! Right now we are speaking of the CUSD teachers and you say there are many double and triple dipping. I do not believe this is the case. Please show me the proof of this accusation. If you make an accusation than you should have the data to prove it because otherwise you are just repeating what you have heard or read. It may not actually be true especially for CUSD. Please research further your statements. If it is true this data is public since these are public employees,
PC December 15, 2011 at 06:23 PM
The botton line is that their is a budget that is out of control and the Tax payer is not the problem and should not have anymore burden otherwise there will be even less taxpayers
shelly December 15, 2011 at 06:25 PM
Teachers pay taxes too!
Capo mom December 15, 2011 at 08:40 PM
shelly here are the facts; Teachers in CUSD are compensated at a rate that is 3 times the median wage of the county. Their salaries will continue to increase. They can't be fired. This is true for the good, the bad and the ugly. Teachers can and do live better than most in the county. And their union is a powerful special interest group. It bought the last election in CUSD. And as soon as their board was installed, they went into closed session and demonstrated their priorities. That is how interested they are in "working together" to find a solution.
shelly December 16, 2011 at 12:22 AM
capo mom, There are people who make more and people who make less. Teachers are middle income workers. Are you saying that $33,000 is enough to live and raise a family on in South Orange County? yes, teachers make more than fast food workers, store clerks, dishwashers, some service people, office clerks, pizza delivery people. a few others, and there are more of these people in these jobs. Teachers also have degrees. Do all the median workers have college and advanced degrees or years of experience at their jobs? Do you really think people believe that teachers are rich. Their salaries are not rising and have been cut. They can be fired if administrators do their jobs. Their union is made up of teachers and the intent of a union is to get the best benefits and conditions for the members. Union is not a bad word. Please define "their board". The board has 7 trustees. Trustees Addonizio, Palazzo, Bryson and Brick were on the former board and were never endorsed or supported by the union. Trustee Alpay did not receive campaign donations from the union. Trustees Prichard and Hatton did. You keep claiming that the board is a union board but you do not state how this is? Who are the union trustees. Back up what you say with proof. If you can't tell us who the union trustees are then why do you keep saying it? When you approach people with accusations and name calling then people tend to get defensive. Is this your tactic to encourage people to work together.
shelly December 16, 2011 at 12:54 AM
Lawyers, engineers, doctors, business owners, car saies people, stockbrockers, bankers, sales people, construction workers, electricians, plumbers, contractors, mechanics to name a few make more than teachers. Some of these people have degrees and some do not. Some people make more and some people make less. You are including teenagers in this census. You are including babysitters in this census. What is the median income of workers with college degrees. And yes some can raise a family on 33,000 but it is not easy and it takes barely scrapping by with gas at $3.50 and rents at $1200 and higher. Mortgages we will not even mention because on $33,000 in south orange county that would be impossible.
Capo mom December 16, 2011 at 01:16 AM
shelly, all I have done is present the data. I haven't called anyone names. You are one making the interpretations. Let me put it to you another way. The average CUSD teacher are paid significantly more per capita than the median household in OC. When benefits are considered, the average teacher compensation in over $100k a year. Considering their benefits, their tenure and the fact that they work about 180 days per year, CUSD teachers are very well paid. Our teachers union has required that hundreds of less senior teachers be laid off every so that these salaries can be maintained. This has a direct impact on students. Their union spent hundreds of thousands of dollars in the last election to install their board. At the very first meeting of the new board, the union's board members voted to pay the union back, then sought to hide that they had done so. That is their idea of working with the community.
shelly December 16, 2011 at 06:07 AM
Capo mom, Are you saying that everyone should make the same and that no one should make more than others? Regardless of education or experience we should all make the median per capita income? Yes, teachers make more than some people and they make considerably less than others. They are middle income. They are not rich. They went to school. Got an education. And became teachers. We hired them. We decided what to pay them and how to compensate them. We need their services. CUSD teachers make a living. They stay with the district and keep our investment in training and experience in the district. They also attain higher degrees on their own dime and bring that knowledge to our district. Teachers took a pay cut. And there were lay offs. Just like in most companies the less senior people are laid off first. Why wouldn't you want to keep experienced workers over beginners especially when you are going to ask them to do more for less. The board had 7 trustees. Trustees Addonizio, Brick, Palazzo, Bryson were never endorsed or supported by the union Trustee Alpay did not accept campaign funds from the union. Trustees Prichard and Hatton did. The first thing they did was to decide whether or not to honor the contract the former board had signed. This is what was voted on. Who are the union trustees who control the board. There are 7 votes. Which 7 are you saying are union. Please be specific.
Capo mom December 16, 2011 at 02:59 PM
shelly, I'll say it for you again; The average CUSD teacher are paid significantly more per capita than the median household in OC. When benefits are considered, the average teacher compensation in over $100k a year. That means as individuals they are compensated about 3 times the median household income in OC. This is true regardless of their performance. Considering their benefits, their tenure and the fact that they work about 180 days per year, CUSD teachers are very well paid. Our teachers union has required that hundreds of less senior teachers be laid off every so that these salaries can be maintained. This has a direct impact on students. Their union went on strike and spent hundreds of thousands of dollars in the last election to install their board. At the very first meeting of the new board, the union's board members voted to pay the union back, then sought to hide that they had done so. That is their idea of working with the community.
shelly December 16, 2011 at 10:14 PM
Capo mom, I guess I am not understanding your point. I did not state that teachers did not make enough money. I believe teachers deserve the compensation that they receive. You keep making the point that teachers make more than fast food workers and store clerks (33,000). Well, shouldn't they? Teachers have degrees, advanced degrees and most in CUSD have experience. What is your point? We should all make the same? The current board has four former board members Trustees Addonizion, brick, Bryson and Palazzo. Can you please explain to me how all of a sudden these Trustees who ran against union endorsed candidates suddenly became union Trustees? Please explain. The current board voted to honor the contract the former board had signed. If you have a problem with the restoration than you should blame the former board because they are the ones who signed it into the contract. Maybe that is why some of them were voted out.
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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