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They used the money to build 14 middle school classrooms, two elementary schools and complete modernization high school projects.
Now, that loan is coming due. The district hoped Prop. R would provide money to help pay off its debts, but without any new tax revenues, Ramona Unified faces annual repayments that grow to more than $3.4 million — about 8 percent of the district’s yearly budget. With interest, the $25 million loan will end up costing about $55 million.
The district doesn’t have a plan for how to pay its bills.
Without passing a bond, Ramona Unified may need to balance its books by slashing teacher compensation and cutting back on student programs and services. The decisions made in 2004 may well end up hurting the 5,865 students enrolled in the district today as class sizes swell, and programs are cut, said Donna Braye-Romero, president of the Ramona Teachers Association.
“It’s going to be devastating to the communities and the schools,” Braye-Romero said. “We have a problem that needs to be solved and it’s not a problem that can be solved by just making cuts.”
Ramona Unified School District Superintendent Robert Graeff knows he has a problem, he just doesn’t know how to deal with it.
The loan Ramona took out was similar to the
capital appreciation bonds that have proven so controversial in recent months. The district didn’t make a single payment on its loan until 2008 and interest piled up.
In the 2013-14 school year, Ramona will face a $600,000 payment on the loan. The following year, the payment will spike to $1.7 million and it will rise again to $1.8 million in 2015-16. The amount increases gradually each year thereafter until 2032.
“We don’t have the resources to pay for that,” Graeff said. “The plan was to pass Prop. R.”
The district, which operates nine schools and has an annual budget of approximately $42 million, has been losing students at the same time it’s been spending money fixing up its schools and expanding.
Enrollment at the district, which covers about 150 square miles, began declining in 2002. There were 7,247 students 10 years ago; now there are 5,865, a drop of 19 percent. The district expects that downward trend to continue.
District officials hoped to use fees from developers to repay the loan. That didn’t happen. New development in the district halted as the real estate bubble burst, and $1.5 million in annual developer fees in Ramona has dwindled to a mere $100,000 a year.
Graeff and members of the school board addressed residents’ concerns at a meeting hosted by a community group at the city library Wednesday.
Attendees suggested a number of options to repay the loan, from floating another school bond to closing and consolidating school sites or asking administrators to take salary cuts.
Graeff dismissed the idea of consolidating schools.
Closing schools in such a rural area would create hardships for students and families, Graeff said. He added that the district would need a transportation system, since there is no public bus system in town. The expense of buying buses, hiring drivers and paying fuel and maintenance costs would cancel out any cost savings from closing schools, he said.
Selling real estate might be a viable option for Ramona if there were interested buyers for district property. There aren’t. The district has actually been trying to sell three properties for more than a decade.
“Vacant buildings just become eyesores,” Graeff said.
Ramona Unified is San Diego County’s third highest-performing school district under California’s Department of Education’s Academic Performance Index. Ramona trails just Poway Unified and San Marcos Unified in statewide standardized test scores in the county.
Ramona students have exceeded the state’s goals for standardized testing three years in a row. Test scores have risen gradually since 2002.
But even before the current troubles, the district has suffered from years of cuts to state education funding. Braye-Romero, who teaches kindergarten and first grade at the Ramona Community School, said class sizes have jumped tremendously because many teaching positions have already been cut or reduced in the past year.
The union official said at Wednesday’s meeting that the district and teachers must rally together with residents to encourage the community to finally pass a bond.
Salary cuts or further cutbacks in the classroom wouldn’t be fair to the community’s children, Braye-Romero said.
“We can’t let the kids suffer for this,” Braye-Romero said.
Bob Stoody, current vice president of the Ramona Unified school board, is the only sitting trustee left from the board that issued the loan in 2004. He said the board has taken responsibility for its actions, and still believes taking out the loan was a good idea.
Luan Rivera, who served as a trustee for 16 years, echoed Stoody’s sentiments. One of the elementary schools that was replaced by the money the district borrowed was on the verge of becoming unsafe, she said, and was no longer serving the faculty and students.
“At the time we were making this decision, we really thought it was the best choice,” Rivera said.
Holly Pablo is an investigative intern at Voice of San Diego. You can reach her at firstname.lastname@example.org or 619.325.0525.
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