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The San Diego Unified School District is currently considering placing a new bond measure on the November ballot. If 55 percent of voters approve it, the measure would allow the district to borrow as much as $2.8 billion, money that would be paid back by a levy on local property taxes.
Supporters say the measure could save the district tens of millions of dollars a year out of its day-to-day operating budget.
But state law specifically bars schools from spending bond money on everyday operating expenses. So how would borrowing this money help San Diego Unified’s stressed budget?
To find out, I spent some time examining the plan being pushed by supporters of the bond and called a few attorneys and experts in school bond financing.
I soon realized a couple of things:
First, the bond’s boosters have defined savings rather loosely. The district has two big programs in its budget that are funded from sources that are going to run out soon.
The bond’s backers say that without the new bond measure, the only way to fund those programs would be out of the district’s day-to-day budget. Hence a future “saving.”
If passed, the bond will do little to reduce costs currently being incurred by the district. It will simply provide a stream of revenue to keep programs going.
Second, supporters aren’t yet sure exactly how much money the bond can save. Their estimates are vague, and they say they’re still figuring out the details.
But there are three basic ways the district hopes to save money by spending money.
Method One: Save on Utilities Costs by Renovating Buildings
This is probably the simplest of the three cost-saving methods. Basically, the plan is to invest about $200 million in upgrades to schools and other buildings that will result in savings on the district’s water and power bills.
The initial investment would pay for solar power and alternative energy investments, and would also be used to re-plumb buildings to divert so-called “gray water” — wastewater produced from showers and sinks — to irrigate fields and landscaping. And the district would pay to better insulate existing buildings.
The district estimates these improvements can save at least $3 million to $7 million a year. At that rate, it won’t pay off its investment for at least 28 years, but bond boosters say the district will enjoy the additional benefit of “going green” at the same time it’s reducing its reliance on utilities.
Method Two: Savings on Technology
Right now, the district spends about $20 million a year on technology improvements at schools as part of a program that provides interactive whiteboards, laptops and wireless connectivity.
That program is currently funded through the district’s last bond, Proposition S. But that money is going to run out in the next couple of years.
The district will, however, still have an ongoing cost of $11 million a year to keep the technology in its classrooms updated and maintained. Once the money from Prop. S runs out, the district has two choices: End the program, or find money to pay for it from somewhere else.
The new bond’s supporters say without a new injection of bond money, the district would have to dip into its everyday spending for that $11 million. They want to borrow about $110 million to fund the program for an additional 10 years.
Method Three: Major Maintenance and Repairs Savings
The district currently spends between $30 million and $40 million a year on major maintenance and repairs. This covers maintenance like fixing leaky roofs or replacing burst pipes, but doesn’t include basic day-to-day stuff like waxing floors or changing light bulbs.
About $18 million of it comes from a fund made up of left-over state bond money. (Basically money that the state got from selling bonds, but never used.)
Like the technology fund, that money is going to run out soon. Unlike the technology program, however, the district doesn’t have the option of just shutting down that program. It still needs to repair leaky pipes before they flood classrooms.
So it would have to find the money elsewhere.
Without it, San Diego Unified would have to dig into its day-to-day budget, said Lee Dulgeroff, the district official who oversees its bond spending.
The district estimated a new bond would contain about $180 million over 10 years for major maintenance and repairs.
In total, the district estimates the initiative could save about $31 million to $36 million a year out of its operating budget.
But here’s one important thing to remember: The district is actually already spending only $3 million to $7 million of that.
The rest of the savings come from using the new bond money to continue the existing technology and maintenance programs.
The district is essentially is anticipating coming financial pressure and trying to plan for it.
And that’s important. The district’s current financial mess is focused on its staffing costs, which make up about 92 percent of its day-to-day budget. It doesn’t have enough money next year to pay for all its current employees. That’s why the district has issued more than 1,600 layoff notices.
For now, however, paying for laptops, interactive whiteboards or burst pipes isn’t a problem, because the district has existing bond money to cover it.
What the backers of this measure (including most of the school board) are saying is that without a new bond, the district will face the additional pressure of spending tens of millions of dollars to keep those programs going.
The crisis will no longer just be about teachers, it will be about equipping and repairing classrooms, too.
Will Carless is an investigative reporter at voiceofsandiego.org currently focused on local education. You can reach him at email@example.com or 619.550.5670.
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