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State Advances Money to Cash-strapped CUSD

Without it, the district may not have been able to pay its bills this month.

Despite unprecedented borrowing, the would not have been able to pay its bills this month if not for a cash advance from the state.

At Monday’s Board of Trustees meeting, Clark Hampton, deputy superintendent of business services and support services, announced the district had received what he called a deferral waiver, an advance payment of money owed to CUSD by the state.

“It’s a small amount of $5.6 million that was due to be paid in July, but the district received a waiver and received it early,” Hampton said.

A CUSD spokesperson did not return Patch's request for further comment.

According to the state Department of Education, 19 school districts in California successfully applied for the advance.

Districts can qualify for the early payment if they can show “that the deferral of payments during February through June 2012 will result in the school district being unable to meet its expenditure obligations for June,” according to the state.

In its application to the state via the Orange County Department of Education, Clark wrote:

It is imperative that this deferral exemption waiver so that the Capistrano Unified School District can maintain a positive cash balance during June 2012.

Cash flow has become a significant problem for a number of school districts, Hampton said Monday night, because .

Arlene Matsuura, an administrator with the School Fiscal Services Division of the state Department of Education, said the state delayed $2.5 billion of June payments to July.

“In the old days before these cuts came, an ending fund balance was mostly cash. And now it’s mostly IOUs,” Hampton said.

He added that “any amount we can get reduces our borrowing costs.”

In recent months, the district has . CUSD took out a $75-million short-term loan last July, a practice it is has done for several years to help handle cash-flow needs.

But in January, the trustees . It was the district’s first-ever loan to cross fiscal years. Ultimately, however, the district borrowed just $12.5 million because .

Still, it wasn't enough to get Capo through the end of the school year, according to the district's application for relief.

"The district has exhausted all external and internal borrowing options and without the deferral exemption, may not be able to meet its operating obligations through June 2012," Hampton wrote in his letter of application.

Matsuura said the $5.635 million would cover the first payroll in July, as the normal July payment won't arrive until the end of month. This was the first time the school district has requested such an advance.

"These are payments they would've gotten in a normal year," Matsuura said.

Hampton said Monday that the district was already in the process of applying for more cash advances for next year.

Also at Monday's meeting, trustees voted on two other items that indicated financial duress. They approved:

  • Borrowing money from several district funds, such as the cafeteria fund and adult education, which typically are not used to pay for regular school expenses 
  • Giving themselves the ability to take money pegged for specific programs and "sweep" them to the general fund

Of the 19 school districts that successfully applied for cash advances, 11 – including CUSD – are in what the . Capo is by far the largest school district of the bunch. The only other Orange County school district to apply for and receive an advance payment was Anaheim City School District, which received $4.465 million.

Frieda Wales June 14, 2012 at 03:25 PM
Capo Unified is beyond saving.
Frieda Wales June 14, 2012 at 03:26 PM
I know. This is ridiculous! What are people thinking? Horrible place to educate children.
Frieda Wales June 14, 2012 at 03:26 PM
It is pathetic. Time to move.
Frieda Wales June 14, 2012 at 03:27 PM
Whatever! The infighting and poor planning for over a decade makes this district almost unsavable. Don't live here if you have kids - bad decision.
Frieda Wales June 14, 2012 at 03:28 PM
It's me me me first around here! No one cares about education. Terrible place to raise kids. The school district cannot be saved!
Capo Parent Too June 14, 2012 at 03:32 PM
Yeparoo - But this argument has been about how much furlough days are going to hurt parents. See you are actually acknowledging that less teaching days is a budget cut, which others refuse to see. My point was less days are LESS DAYs, not instructional time but days where parents need to find child care, etc. It is also a pay cut to teachers (but in OPA's case these days are actually used for teacher's to enhance their teacher abilities). The situation sucks for CUSD, but with what their handed, we still have an outstanding district. With the money they have per child, we still have great teachers and school. It's still the highest performing large school district in the State. But if I were to google and read all these Patch articles, I would certainly rethink MOVING my kids to these schools. There are actually GOOD things happening in CUSD.
Frieda Wales June 14, 2012 at 03:35 PM
So clueless! I can't believe I have to face putting my kids in these schools until I can find an escape to somewhere better. There are only a handful of parents that really care and the current board is made of clueless, greedy, union-hugging idiots!
LeAna Bui June 14, 2012 at 03:39 PM
Can't argue with that.....
Penny Arévalo (Editor) June 14, 2012 at 03:41 PM
Patch articles: http://sanjuancapistrano.patch.com/articles/san-juan-hills-class-of-2012-honored http://sanjuancapistrano.patch.com/articles/frozen-yogurt-tops-off-reading-program#photo-10293057 http://sanjuancapistrano.patch.com/articles/saddleback-church-playing-a-role-in-anti-gang-program http://sanjuancapistrano.patch.com/articles/san-juan-elementary-students-capture-their-teachers-in-art#photo-9898479 http://sanjuancapistrano.patch.com/articles/rop-awards-ceremony-recognizes-outstanding-students-who-are-nominated-by-their-instructors http://sanjuancapistrano.patch.com/articles/cinco-de-mayo-en-san-juan-elementary http://sanjuancapistrano.patch.com/articles/photos-scenes-from-a-carnival#photo-9805792 These are just since May and just in SJC Patch. I know there have been many other stories about CUSD in the other Capo Patches.
Frieda Wales June 14, 2012 at 03:47 PM
I know. Can't believe I moved here. Can't wait to leave this damaged district.
Frieda Wales June 14, 2012 at 03:52 PM
Most pathetic board ever, unless you count the one before that and the one before that...
Frieda Wales June 14, 2012 at 03:55 PM
I have turned the corner from Hopeful to Hopeless. I was wrong to think that common sense, good neighbors, good teachers could make a difference. I see now that I was blinded by at least 2 boards, the unions and everyone. It is now beyond repair and it can only get worse.
Capo mom June 14, 2012 at 04:10 PM
We aren't dealing with what we were handed. We are dealing with a situation the union and their board created. The previous board, CUEA and many others saw this coming. The history is well known. Rather than participate in a solution that would prevent this from happening, CUEA went on strike and dumped hundreds of thousands of dollars in to the 2010 election to gain control of the board. To add insult to injury, the very first act of their board was to kick millions back to their generous campaign donor and they tried to hide that this was what they did. At every opportunity, this board majority has favored CUEA's interests over our kids needs. And here we are today.
Frieda Wales June 14, 2012 at 04:17 PM
All the good cannot make up for what Capo Parent wrote: The previous board, CUEA and many others saw this coming. The history is well known. Rather than participate in a solution that would prevent this from happening, CUEA went on strike and dumped hundreds of thousands of dollars in to the 2010 election to gain control of the board. To add insult to injury, the very first act of their board was to kick millions back to their generous campaign donor and they tried to hide that this was what they did. At every opportunity, this board majority has favored CUEA's interests over our kids needs. I have also heard that the board before this incompetent greedy board was almost as bad, and the one before that built a Taj Mahal and didn't think about the kids. There is no end to this infighting. It's terrible.
Penny Arévalo (Editor) June 14, 2012 at 05:10 PM
At the first meeting of the new board (Dec. 7, 2010), the trustees heard their first interim financial report for the year. It predicted a $22 million shortfall for the 2012-13 year in its multi-year projections. See: http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/8135741240246312599.pdf (page 508)
Penny Arévalo (Editor) June 14, 2012 at 05:32 PM
http://missionviejo.patch.com/articles/carlhankey#photo-10288381 http://missionviejo.patch.com/articles/outstanding-students-win-elks-scholarships http://missionviejo.patch.com/articles/high-school-video-roundup-in-mission-viejo http://lagunaniguel.patch.com/articles/dragsters-are-coming-to-town-on-saturday http://lagunaniguel.patch.com/articles/new-principal-named-at-l-n-elementary-school http://lagunaniguel.patch.com/articles/city-council-pays-tribute-to-long-time-principal http://lagunaniguel.patch.com/articles/anhs-girls-soccer-team-named-national-champions-earn-kudos-from-espn#photo-10141372 http://alisoviejo.patch.com/articles/aliso-niguel-high-school-seniors-say-goodbye#photo-10285238 http://alisoviejo.patch.com/articles/canyon-vista-musical-theater-students-bring-message-of-acceptance#photo-10213585 http://alisoviejo.patch.com/articles/graduates-awarded-1-000s-in-scholarships
OC Mom June 14, 2012 at 06:16 PM
CP2, Your attempt to disparage OPA is way out of line. There is no comparison. OPA has a longer school day starting at 8:05am and going till 3:15pm each day except Friday when they get out at 11:35am after spending the day being tested on that weeks learning. The instructional minutes at OPA are significantly greater. Also, we cut our instructional days by 3 this year to accomodate Barcelona Hills closing. We did not choose that school site and after all of the tension involved our administration thought that it was a sign of goodwill to give them that time alone on campus. According to my copy of the school calendar we were to have 170 student days and with the 3 days cut that brought us down to 167 days. I personally wasn't happy with lopping off those days, but the BOT chose that shared campus situation and this was the consequence. In addition to regular instruction time our kids are able to come to before or afterschool tutoring, band and sports. The kids at OPA received a lot more instruction time including above average amounts of homework to reinforce learning. I can't wait till August to see what our STAR Test scores are so that all of the naysayers and slanderers of our school will be silenced. The results of the hardwork should speak for themselves. This is not about breaking a Union or teacher bashing. This is about living within a budget and mitigating the effect of cuts to education on students.
Denise Krane June 14, 2012 at 08:23 PM
I hate to say I told you so ..... But I told you so.
Frieda Wales June 14, 2012 at 08:58 PM
I know a good Real Estate Agent if anyone wants to sell. Time to move on to greener pastures.
Capo mom June 14, 2012 at 09:24 PM
PCM, this my community. I am not happy. I won't pay unions (more) to destroy it but I will work to pay it better.
Frieda Wales June 14, 2012 at 09:32 PM
I wouldn't be happy either. Who can blame you?
Capo Parent Too June 15, 2012 at 04:49 AM
My point had to do with days and not minutes, so we're talking about furlough days and days only.
Capo Parent Too June 15, 2012 at 04:50 AM
My apologies Penny, those pieces do not show up on my local Patch. I stand corrected.
Capo Parent Too June 15, 2012 at 04:54 AM
OC Mom- I am not attempting to disparage OPA, I am pointing out that they have less instructional days and that people here are hand wringing over the furlough days and nothing else. OPA is being put forth as the gold standard of schools. From what I can tell from the schedule you put forth, OPA has only 2.5 more instructional hours a week than CAPO schools. Significantly greater? That's a half hour a day.
OC Mom June 15, 2012 at 06:40 AM
Capo Parent too, Perhaps my language was too strong. Sorry. At a regular CUSD elementary I remember the schedule being 7:45am to 2:15pm vs. 8:05am to 3:15pm. That's almost an hour extra a day, 55 minutes according to my math. Also, there is no lunch scheduled on the early out Friday 11:35 am dismissal days. I don't know if OPA is trying to be the Gold standard, but I know that they are trying to be efficient and the added tutoring for those who need it is also a plus. The different learning style instruction comes into play also. My kids have learned things that have gone to long term memory vs. knowing it for the test and forgetting it after in years past. I'm all for going to a 4 day school week if that will save the district money. Salaries should be cut 1/5th though to reflect the additional day off. I'm sure we could balance our budget with utility savings, administration savings and reduced salaries due to the shortened week. In order to make up for the loss of a day they could add a half hour to hour to each school day. Why are most folks in the private sector working 8 to 12 hour days year round?
Sharon Y. June 15, 2012 at 12:34 PM
A lot of the blame falls on Vicki, the CUEA president. In 2010 she spent most of the year lying about the reform board, telling the public she was willing to take a cut but reform board was mean and unreasonable,and lying about and attacking anyone who supported reform. The truth, in black in white came out in the fact finders report, the union offered nothing. Even after that more union lies, strike, recall, and now bankruptcy.......... The losers in all of this, the students and the teachers, no money left for student programs, teachers have lost pay and the respect of community, if I were them I would dump Vicki and get a honest, reasonable, fair-minded president willing to conduct union duties part time and spend the other teaching. I also as a sign of good faith have my salary be paid by my union not the general fund, that could save another teaching job!
Craig Alexander June 15, 2012 at 09:19 PM
The long term solution is the stop the massive flow of money into the union's political action committees which allow them to spend hundreds of thousands of dollars on campaigns (I refer to the almost $400,000 spent by the unions in CUSD for the 2010 elections). On the November ballot will be an initiative called the Stop Special Interest Money Now Act. If it passes, unions and corporations will not be able to take money from their members/employees via involuntary payroll deductions and spend it on political contributions. It will not solve CUSD's immediate fiscal Waterloo but it will help level the playing field so that Trustees will not be owned by the unions in the future. To find out more go to: http://www.stopspecialinterestmoney.org/
CUSD Parents Are Selfish @55h0|35 June 20, 2012 at 08:56 PM
@Pacific Coast Mama The people of this district (except for you and me, of course) are so self-focused and sure that someone, everyone is getting a free ride at their expense. The incredible shame is that these are the freeloaders. They point fingers and shout slogans rather than step up and do the right thing.
CUSD Parents Are Selfish @55h0|35 June 20, 2012 at 09:08 PM
Okay, that was kinda fun for a while, but now I think we'd all agree, at some point you gotta go. You've said you're leaving about 1500 times. Any progress? CUSD has no end of issues, but currently, at least, my kids get a good education. It's time. Go. Hey I know, let's have a Pacific Coast Mama going away party. Oh, it'll be fun. We can all reminisce about your fantastic "I hate this place", "I love Irvine" , "I'm moving" and then, at the end, you'll go. Deal?
Frieda Wales June 20, 2012 at 09:41 PM
CUSD PASelfish. Deal. I will go and throw a party. So many good choices to choose from - Irvine, Singapore and Arizona.

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