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At Tuesday night’s San Diego Unified school board meeting, the board touched on a few key narratives that we plan to follow in the coming weeks.

We’re taking a look at each one in turn, examining what the issue is, where it stands now and what to watch for in 2013.

A New Approach to Funding Special Education at Charter Schools

The issue: San Diego Unified has been steadily losing charter schools from its special education program. Now, it’s trying to woo them back.

Special ed funding in California is funneled through organizations called SELPAs. San Diego Unified has its own SELPA, which collects state special ed funding it uses to provide services across the district. But because the district constantly overspends on special education, it’s constantly dipping into other programs to make up the difference.

To help pay that difference, the district charges charter schools that want to receive special ed services a per-student fee. This year, that fee climbed to $1,130.

To avoid the steep fee, local charters have paired with SELPAs in other parts of the state. Instead of taking each school’s special ed money and spending it, those SELPAs take an administration fee and pass the rest directly on to schools.

San Diego Unified now plans to replicate that system.

Where it stands: The district has been in talks for months with the California Charter Schools Association to brainstorm a new way to fund special education at charter schools. The board voted unanimously on Tuesday night to move forward with a three-year pilot program that will replicate what SELPAs elsewhere have been doing for years.

Schools that participate in the program will get 80 percent of their state special ed funding. The district will take the rest as an administration fee.

What to watch for: It will be interesting to see how many schools choose to take part in the pilot program, whether the program is self-sustaining and whether charter schools will be able to provide adequate special ed services with the 80 percent of their state funding they will receive under the pilot. We’ll also be curious to see how the state fares when it loses all of those per-student fees from charters.

Proposition S and Proposition Z Merging Fast

The issue: The district has an old bond program (Proposition S) and a new one (Proposition Z). In theory, the district still has about $1.7 billion left to spend under Proposition S. But the only way for the district to get its hands on any of that cash is by issuing long-term, expensive capital appreciation bonds.

Three school board members and the district’s financial adviser told me that there’s no point in issuing pricey CABs if the district has the option under its new bond to borrow money more cheaply.

Where it stands now: The board is still trying to figure all of this out. At Tuesday night’s meeting, the trustees voted unanimously to create a single independent citizens oversight committee to oversee Propositions S and Z spending. The committee will likely include some of the members of the current oversight committee for Proposition S.

What to watch for: The big question here is which projects get funded first. The district has two lists of projects waiting to be funded, one for each bond. But if the district’s not going to be selling Proposition S bonds, do Proposition Z projects jump to the front of the line?

The district could also sell capital appreciation bonds under Proposition S anyway. Board President John Lee Evans and Trustees Richard Barrera and Scott Barnett have all told me they don’t think the district should issue CABs if they don’t have to.

And Proposition Z could always end up with limited financing options, just like S. The district thinks it can raise $2.8 billion under Proposition Z, but that’s based on projections by the district’s financial advisers. Will the district get the tax revenue it needs to borrow that money using typical current-interest bonds Or will it find itself unable to borrow cheap money in a few years?

Raising the District’s Reserves

The issue: The district has spent the last few years running down its reserves. Now, it wants to take some of the new money it will get from Proposition 30, the new statewide tax measure that passed last November, and use that to shore up its reserves.

But there are problems: The district doesn’t yet know how much extra funding it will get next year; more than 50 percent of the new money will, in the short-term, be swallowed up paying for raises the board agreed to back in 2010 and the district has an ongoing deficit problem that may not be solved by the new money.

Where it stands now: The board voted unanimously (notice a trend here?) to move forward with a plan to shore up the district’s reserves. There wasn’t much detail in the discussion, since that will be filled in by staff later.

What to watch for: It’s still unclear whether the district can afford to do this. Right now, the district plans to not replace hundreds of teachers who quit or retire this year. That means higher class sizes. That doesn’t seem to jibe with putting money in reserves.

Also, remember all that talk late last year about reinvesting in education and restoring lost programs? How does that happen if the district prioritizes its reserves?

Stay tuned.

Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at will.carless@voiceofsandiego.org or 619.550.5670.

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Will Carless

Will Carless was formerly the head of investigations at Voice of San Diego.

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