Coronado Unified School District Places Proposition E on June Ballot

CUSD Voters to Decide Fate of Measure to Protect Local Quality of Education March 13, 2014 For IMMEDIATE RELEASE Contact: Jeffrey P. Felix, Superintendent Phone: 619-522-8900 x1025

The Coronado Unified School District (CUSD) Board of Trustees recently voted to place a $29 million dollar school bond proposal on the local June 3, 2014 ballot. That measure was filed with the San Diego County Registrar of Voters and has officially been named Proposition E. The measure requires a 55% vote to pass. This is about protecting one of Coronados greatest assets the quality of our neighborhood schools, said Dr. Jeff Felix, Superintendent, adding, The state has changed its funding formula and CUSD is a casualty of that process. Without approval of Proposition E, our award-winning neighborhood schools will be decimated. According to School Board President Dawn Ovrom, We cannot cut our way out of this without decimating the quality of our education. This crisis is real and I believe we have found a creative solution that is consistent with Coronados conservative values. This measure includes innovative taxpayer protections that make it arguably the most prudent of its kind anywhere in California. All funds generated will stay here in Coronado to protect local quality education. The State cant take these funds away or use them for other purposes. The CUSD school bond proposal is unique by virtually any standard. If approved by voters it will raise the performance bar for pay-as-you-go public financing of local schools. Bonds will be subject to several new and more stringent taxpayer protections to ensure that Coronados schools will survive the serious threat posed by the States new K-12 funding formula and stay among the best in the state. New State Funding Formula Extends Recession for Coronado Schools Historically, CUSDs high quality educational standards were based on funding in the 2007-08 budget levels. Those levels enabled both an excellent education for local children and fiscal conservatism in line with Coronado community values. But in recent years, the Great Recession cut base funding for local schools by 10 to 15 percent (while unavoidable costs like health care and energy increased by another 10 to 15 percent). To maintain a balanced budget during the past five years, CUSD relied on a combination of budget cuts, larger class sizes, one-time Federal grants intended to alleviate the impact of the Great Recession, and a planned spend-down of fiscal reserves prudently built up during better times.

With the recession subsiding and state revenues growing again, we had expected rapid relief to restore us to the former funding levels. Instead, we got hit with a new state funding formula for schools (commonly called LCFF) that in essence extends the Great Recession for Coronado and about 5% of Californias school districts, said Superintendent Felix. Money that would have gone to restore our funding to previous levels has been diverted to focus on English Language Learners, foster children and children from poor families. We understand the needs of these children, but we lament that the State has chosen to fund their needs on the backs of Coronados deserving kids, Dr. Felix added. Californias new Local Control Funding Formula will mean that it will take at least eight years to restore CUSDs funding to its 2007-08 level. And in 2007-08 California schools were ranked only 46th in the country in per student spending. Another way to view the current challenge is to note that the San Diego Unified School District this year will get over $1,000 more per pupil (about 16%) in state funding, and that gap will grow year after year. With extra funds, San Diego and other neighboring districts plan to increase compensation and/or cut class sizes in 2014-15. Coronado schools cannot support superior education with inferior funding, nor can they attract and retain superior teaching talent with inferior resources. Importance of High Quality Local Schools Greater than Ever: What Proposition E will Fund Under the innovative ballot measure proposal, proceeds of the bonds will be used only on capital items such as facilities, equipment, and technology. This will permit Coronados facilities to stay current, to promote secondary science, technology, career technical educational classrooms, and instructional technology, to continue advanced programs in math, science, and the arts, and to meet university admission and industrystandard job-training specifications. Bonds would also be used to fund renovation of existing classrooms, libraries, labs, and school facilities, and to relieve the CUSD General Fund by paying or prepaying lease-purchase obligations. All of these needs are legitimate uses for school bond funding as defined in State Proposition 39 approved by California voters in the year 2000. Coronados History of Fiscal Prudence Tim Carty of Piper Jaffray, one of Californias leading school public finance firms, conducted a review of school bond tax rates throughout San Diego County. It is very rare that a school district funds its capital needs facilities, equipment and technology almost entirely out of General Fund revenues that can be used to support education in the classroom. Nearly every school district uses bond funding for some significant capital needs. We identified 36 K-12 educational jurisdictions in San Diego County each one being a Unified School District or a combination of a high school and elementary district. In only about ten percent of those areas 4 jurisdictions was there no bond funding.

In contrast, Coronado Unified has been funding virtually all of its facilities, equipment and technology needs from General Fund or local sources. If CUSD can cover its capital needs from bond proceeds, then General Fund dollars can be used instead for smaller class sizes, expanded programs and other educational purposes. As Board President Ovrom notes, If we pass Proposition E, it will mean we can cover capital costs with bond proceeds, thereby freeing our General Fund to continue advanced CUSD programs in math, science and technology among others. I do not see another viable path to protect manageable class sizes, keep outstanding teachers on staff, and continue to provide the quality of education for which Coronado schools are renowned. Unique Taxpayer Protections Embedded in Proposition E Beyond current Prop 39 mandated taxpayer protections, the Coronado School Board has insisted upon including features in the bond measure, which will make it particularly fiscally prudent. The proposed measure includes the following UNPRECEDENTED package of taxpayer protections: Short-Term Bonds Only: Individual bonds must have terms less than 5 years, keeping interest rates down and reducing costs. Cap on Outstanding Debt: The bonds outstanding at no time may exceed $13.2 million. No Long-Term Debt: All bonds must be paid by 9/30/2024. These bonds thus will not burden future generations. Prudent Maximum Bond Authorization: The total value of all bonds issued cannot exceed $29 million, which is right-sized to cover the anticipated funding problem over the next 10 years, and not beyond. Cap on Annual Debt Service: New bonds cannot be issued if they will cause total annual payments (on all bonds) to exceed $3.3 million, thereby effectively protecting residents from creeping future assessments on account of the bonds.

In particular, Dr. Felix noted, this measure will cost no more than $40 per $100,000 of assessed value. Remember, assessed values are much less than fair market values. For example, the average home in Coronado has an AV less than $700,000, even though the average market values are much, much higher. Keep in mind that those higher market values come in large part from the quality reputation of the local schools. President Ovrom added, If we lose the programs that make us who we are, we risk long term damage to the community. Upon hearing about the proposed measure, longtime local resident and property owner Jim Beatty said, Ive lived here in Coronado nearly 40 years. My kids are grown and gone. But that doesnt mean seniors like me shouldnt pay attention to this measure and learn what they can to make an informed decision. I certainly see the connection between good schools and property values, and with the outstanding performance of Coronado schools in recent years, my home has appreciated based on that connection. This measure will help us maintain the value of our investments. It will protect our homes and our community. It makes sense to support it. Ill be voting yes on Proposition E.
3