Carlsbad Unified's Seven-Year Itch - Voice of San Diego

Economy UNVEILING THE UNSEEN

Carlsbad Unified's Seven-Year Itch

After a period of unexpected financial turmoil, the Carlsbad Unified School District will open the doors to Sage Creek High, created with bond money passed in 2006.

When an inaugural class of 300 freshmen arrives at the $95.8 million, Proposition P-funded Sage Creek High School on Aug. 28, the Carlsbad Unified School District hopes to close the door on an unexpected chapter of fiscal uncertainty.

In the wake of the Great Recession, the school district has struggled with cuts to state funding, lower-than-anticipated revenues and a mountain of Prop. P debt on its books. Teachers were furloughed. Salaries and school days were scaled back. But now district officials see a return to stability on the horizon.

Schools districts must file interim financial reports with the state Department of Education and the state Controller’s Office twice a year, letting the agencies know whether the districts can meet their financial obligations. Districts rate their own statements in one of three ways – positive, qualified or negative – and the state can either agree with or amend the certification.

A positive certification means the district can fulfill its obligations for the current fiscal year and the next two fiscal years. A negative certification means the district can’t fulfill its obligations through the end of the current school year. A qualified certification lies in between, suggesting that the district could pay its outstanding bills over a three fiscal-year period if it raises revenues or cuts expenses.

In the last two school years, the state gave Carlsbad a “qualified” rating, casting doubt on the district’s ability to pay its bills.

But Rick Grove, the district’s assistant superintendent for personnel services, said he expects the district to get a positive certification based on its first interim report for fiscal year 2013. The state will not weigh in until after the Dec. 15 submission deadline.

A positive certification for Carlsbad Unified would dramatically shift the district’s fiscal outlook after a few deficit-burdened budgets.

Earlier this year, Delay Sage Creek, a coalition of “concerned parents, students and educators,” mounted a steady opposition campaign, arguing it would be financially irresponsible to open the new high school.

On their website and Facebook page, the coalition debunked the “myths” they said the school board was using to build support for the new high school.

“In normal circumstances, and with a steady source of revenue, Sage Creek would be seen as a fantastic high school of choice for the district,” the coalition wrote in a Feb. 12, 2013, Facebook post. “Unfortunately, these are perilous economic times.”

The coalition organized a letter-writing campaign and rallied supporters at school board meetings, painting a bleak portrait of the district’s financial future. They proclaimed that opening Sage Creek would “harm the students in the district and be a breach of public trust.”

But in early May, the website went dark, the Facebook posts stopped, the campaign deflated.

It’s not clear whether the coalition’s position on Sage Creek’s opening has changed. Sally Estep Micksch, the leader of the coalition and president of the Carlsbad Unified Teachers Association, could not be reached for comment.

Support for Sage Creek began to wane after the district projected bigger deficits in its budget report for the 2011 fiscal year. Without a major revenue boost by the 2013 fiscal year, the district would need to shave $13.2 million off its budget, a district analyst wrote, and it wasn’t clear when (or if) the state would restore funds that Gov. Jerry Brown had taken away from wealthy “basic aid” districts like Carlsbad Unified, whose revenues depend heavily on local property taxes.

In November 2006, Carlsbad passed Proposition P, a $198 million bond measure that would allow the district to upgrade elementary and middle school facilities, rehabilitate Carlsbad High School and build a second high school — Sage Creek — to ease overcrowding.

When Prop. P passed, Carlsbad High was pushing 50 years old and “bursting at the seams,” said Elisa Williamson, president of the Carlsbad Unified school board. “We surveyed the community and received the clear message that the best chance of passing a bond in Carlsbad was to include building a second high school,” Williamson said in an email.

The San Diego County Taxpayers Association threw its support behind Prop. P, noting in their September 2006 analysis that the Carlsbad school board had voted to impose higher fees on residential construction projects, which they expected to generate $5 million for district infrastructure renovations.

Two years later, the Great Recession pounded the California housing market and challenged the economic assumptions that so many municipalities had relied on to justify new construction.

The district tried to soften the blow of the recession by redirecting funds from nonessential programs and reserves, but by October 2011, then-Carlsbad Unified Superintendent John Roach was calling on district managers and teachers to make a financial sacrifice on the community’s behalf. The growing deficits had made the budget unsustainable.

“With no more one-time fixes available and no strong economic recovery on the horizon, we are asking all of our staff — including management — to take a substantial reduction in a salary and benefits,” Roach wrote in an open letter published by Carlsbad Patch. He argued that a 20 percent “across-the-board cut” was necessary to close the deficit gap. Lesser cuts would lead to “unpalatable yet necessary deep program cuts,” he wrote.

Among the cuts that most concerned the Delay Sage Creek coalition was the reduction in the number of days that teachers would spend in the classroom. In a Facebook post published Jan. 7, 2013, the group noted that the school district had eliminated three school days and two teacher preparation days for the 2012-2013 school year, saving approximately $215,000 per day.

“With a looming $6 million deficit next year, how many additional days will CUSD have to cut to close the gap?” the coalition wrote. “Students have already suffered from a loss of instructional hours; they cannot afford to lose anymore.”

The district has now “eliminated furlough days and instructional days have been restored,” Grove said.

Carlsbad Unified’s finances greatly improved after the district submitted its second qualified financial report for the 2012-2013 school year, Grove said. A “modest recovery” in property tax revenues, coupled with cost-saving measures the district negotiated with employee unions when the deficit loomed large, helped the district get back on stable ground, Grove said.

Grove said he was confident that the district would be able to fulfill all of its financial obligations over the next three school years.

Williamson, the Carlsbad Unified school board president, said Sage Creek represents an “opportunity for the board to deliver on its commitment to the community to provide a second high school.”

The Carlsbad school board solidified plans to open Sage Creek in March 2013, and it’s turning its attention to the concerns that spurred the bond measure in the first place.

Last year, approximately 3,200 Carlsbad High students attended classes in a building designed to hold 2,400. Williamson said she “regularly received complaints about traffic, parking, noise and trash” from Carlsbad residents who live near the high school, and she said that Sage Creek could help relieve that issue over time.

It may take a while before residents who live around Carlsbad High see a big difference. Sage Creek can hold 1,500 students, but it will take at least four years of adding 300-student freshman classes to reach an enrollment of 1,200.

District officials believe Sage Creek’s emphasis on science, technology, engineering and math will meet the educational needs of students in ways that Carlsbad High cannot. But because Carlsbad Unified is allowing students to choose which high school they want to attend, there is no guarantee Sage Creek will reach full enrollment.

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