State School Bond Funds Mostly Paid for Projects Finished Before the Bond Passed - Voice of San Diego

Education UNVEILING THE UNSEEN

State School Bond Funds Mostly Paid for Projects Finished Before the Bond Passed

Local allocations from Prop. 51, a state school bond passed in 2016, appear to confirm the fears of former Gov. Jerry Brown and those who have studied inequities in public school facility funding – that wealthy schools benefit the most under the current system.

The Design39 campus / Photo by Adriana Heldiz

In 2016, California voters were told a statewide $9 billion bond measure called Proposition 51 was needed to fix and improve dilapidated schools.

Voters agreed, and San Diego County schools have received nearly $206 million so far, state data shows. But a Voice of San Diego review found most of the money that ended up in the county – about 81 percent – has gone toward school construction projects completed months or even years before Prop. 51 was approved, and millions have gone toward building new schools in affluent neighborhoods.

In fact, state data shows five of the six largest Prop. 51 allocations in the region went toward the construction of new schools built before Prop. 51 passed in neighborhoods with less than 30 percent of students eligible for free or reduced priced meals, a program primarily available to lower income families, as well as homeless and foster children. Participation rates in reduced-price meals programs is often used as a proxy for poverty.

The local Prop. 51 allocations appear to confirm the fears of former Gov. Jerry Brown and those who have studied inequities in public school facility funding – that wealthy schools benefit the most under the current system.

Combined, the five newer San Diego County schools will receive $99 million, almost half of all Prop. 51 funds doled out to the county so far, with some payments still forthcoming in the form of reimbursements. Unless a district can demonstrate a financial hardship, new construction projects typically require a 50-50 cost split between the state and district. For modernization projects, it’s a 60-40 split.

In order of magnitude, those local schools were:

Double Peak School in San Marcos (San Marcos Unified) 

Will receive $31.3 million Prop. 51 dollars, more than any other school in the county. The new K-8 school opened in August 2016, months before ballots were cast for Prop. 51. Just 11.1 percent of Double Peak’s student population in 2017-18 qualified for free or reduced priced meals.

Design 39 Campus in San Diego (Poway Unified)

Received nearly $27.7 million Prop. 51 dollars. The K-8 school opened in late 2014, years before Prop. 51 was put before voters. Just 11.6 percent of students are eligible for subsidized meals.

Pacific Trails Middle School in San Diego (San Dieguito Union High School District)

Will receive more than $15.6 million Prop. 51 dollars. The school opened in February 2016. Just 10.3 percent of students are eligible for subsidized meals.

Camarena Elementary School in Chula Vista (Chula Vista Elementary School District)

Received nearly $13 million Prop. 51 dollars. The Otay Ranch campus opened in July 2013. About 28.8 percent of students are eligible for subsidized meals.

Solana Ranch Elementary School in San Diego (Solana Beach Elementary School District)

Received nearly $11.6 million Prop. 51 dollars. The school opened in 2014. Just 4.5 percent of students are eligible for subsidized meals.

California law permits Prop. 51 money to be spent for project reimbursement, and projects are funded “in the order they are received,” said Jennifer Iida, spokeswoman for the state Department of General Services, which oversees the Office of Public School Construction handling the Prop. 51 payouts.

“For modernization, school districts may receive reimbursement back to August 1998. For new construction, they may apply for reimbursement as long as an application for funding is received before occupancy of the new buildings,” Iida wrote in an email.

School officials locally say their funding applications have been in the state pipeline for years.

Even though California voters may have thought new bond money would pay for existing needs, rather than old ones, Amy Li, fiscal and policy analyst for the nonpartisan Legislative Analyst’s Office, said, “Due to a variety of factors, a significant portion of school facility projects have been funded on a reimbursement basis, with the state providing its share after the project has been completed.”

Li said the state’s large backlog of unfunded projects that existed prior to Prop. 51 has contributed to the phenomenon. So has the slow release of state funds and the ability of some local districts to proceed with projects while waiting for state funds to come in.

The first round of Prop. 51 money was released in June 2017, Iida said.

For local school district officials, late state money is better than no money. And lower poverty rates just don’t factor into the equation.

“The district’s free and reduced lunch percentage is not a factor OPSC (the state) uses to determine eligibility,” wrote Christine Paik, spokeswoman for Poway Unified. Paik said the Prop. 51 money for the Design 39 school that arrived in July this year was first sought in 2014, two years before the school opened.

When previous state bond money approved in 2006 ran out, districts were left in limbo, Paik said. “With the passage of Prop. 51 in 2018, most school districts — high on the list — are now receiving funding for projects that they locally funded in the past.”

With the schools already paid for, though, districts must decide what to do with the state funds when they do finally arrive. State law allows the reimbursement money to be spent on repaying old local bond money, other projects approved in local bond language or other high-priority capital projects.

Poway board members voted earlier this year to spend roughly $6 million of the Prop. 51 money on old bond debt, and use the rest on other yet-to-be-identified high-priority capital projects, district records show.

Mark Schiel, assistant superintendent of business services at San Marcos Unified, said the district hasn’t yet received the funds for Double Peak, and staff are working on proposals to bring to the board for how the money will be spent.

“In my experience, most projects operate on a reimbursement basis… Double Peak is a perfect example,” Schiel said, adding that the district “has been consistently growing for at least the last two decades. Due to this growth, it was necessary to construct a new school in order to accommodate the growth in our enrollment. We couldn’t wait for State funding in order to build the school.”

San Dieguito Superintendent Robert Haley said they too have yet to receive the funds for Pacific Trails, and when they do, “we will reimburse our Prop AA Bond Fund and use the dollars to fund projects at other school sites we hope to get underway.”

Anthony Millican, spokesman for Chula Vista Elementary School District, said the state money for Camarena Elementary arrived in June 2018 and helped replenish the district’s Mello-Roos account. It will be used to pay for the next new school, slated to open in Otay Ranch as soon as the 2021-22 school year.

“It would have been irresponsible not to have applied for that reimbursement,” Millican wrote in an email. “It took our District and others about two years to receive the funding. I don’t think that voters expected it would take so long to pay out.”

“During the recession years, the state construction funds were not available. All that school districts could do at the time was build new schools at their own expense, such as 100 percent through special local tax assessments (CFDs),” Millican said. With the return of state funding thanks to Prop. 51, new schools can “be built on a more timely basis.”

Solana Beach district officials did not answer questions about their Prop. 51 money.

The state’s existing school facility funding protocols – including a first-come, first-serve policy – have attracted criticism in the past, notably from Brown, who opposed Prop. 51 as California governor in 2016 arguing it favored wealthier and larger districts at the expense of poorer ones.

“It’s a blunderbuss effort that promotes sprawl and squanders money that would be far better spent in low-income communities,” Brown said at the time.

A 2018 study co-produced by Stanford University and the nonprofit PACE found the state’s funding program for new construction projects didn’t systematically favor wealthy districts, but “higher wealth districts are substantially more likely to receive funding” for modernization projects.

Researchers concluded the state’s school facility funding program “does little to dampen inequality except at the very bottom of the wealth distribution. As a result, California’s current system of school facility finance is relatively regressive.”

They noted: “Districts with higher income and districts with higher assessed value per-pupil have significantly higher facility revenues,” and, “districts with larger shares of disadvantaged or nonwhite students tend to have significantly lower revenue for school facility investments.”

State data shows some Prop. 51 money has gone toward improving older facilities in more impoverished neighborhoods, though, where 75 percent or more of students qualify for free or reduced-price meals.

But only seven such schools in San Diego County have seen any Prop. 51 funds so far, and their combined payments make up less than 6 percent of all county Prop. 51 funds to date.

Those are:

  • More than $3 million to the Elite Academy in El Cajon
  • More than $2.6 million to Crawford High in San Diego
  • More than $2.2 million to Hamilton Elementary in San Diego
  • $1.5 million to Kearny High in San Diego
  • About $941,000 to Vallecitos Elementary in Fallbrook
  • Nearly $859,000 to Mt. Miguel High in Spring Valley
  • $536,000 to Mission Middle School in Escondido

Here’s a map of all the Prop. 51 allocations thus far, according to data provided by the state Department of General Services.

It is too late to change Prop. 51, which still has billions to go, but a new statewide $15 billion school and college facility bond measure headed for the March 2020 ballot would prioritize funding based on factors like district financial hardship, a district’s tax base and students eligible for free or reduced-price meals.

Gov. Gavin Newsom’s staff negotiated some of those changes into the latest bond proposal. Newsom tweeted his support Oct. 7, saying, “Millions of students attend school in rundown, unsafe facilities that pose serious obstacles to learning. We’re going straight to the voters to help fix that…”

Like Prop. 51, though, nothing in the 2020 measure prohibits reimbursement of projects completed years ago. Only time will tell just how much money could end up paying for schools and projects already standing – leaving some school facilities in disrepair.

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