Mike Canada

Question:

What is your perspective on the current deficit spending pattern of CUSD?

Answer:

Remember those “F” grades and “needs improvement” comments that you’ve seen on your child’s report cards? Well, now’s the time to apply the same standards to those who are fiscally responsible for the mismanagement of our district’s funding! Given the fact that CUSD has proffered Village Elementary as collateral on a $12 million twenty-year bridge loan and, leased the Child Development Center to the Navy to pay the $780,000 annual debt payments on said loan, one can only hope that the district can get its fiscal house in order before it runs out of buildings.

CUSDs budget numbers are not encouraging. Eighty-three percent of the CUSD’s 2019-2020 budget was spent on salaries and benefits for its 350 employees; that’s roughly $32.5 million out of overall expenditures of $39 million (the exact 2019-2020 budget information can be found online at coronadousd.net under the “District Budget Information” section). In the same year, state funding through the Local Control Funding Formula (LCFF) only garnered CUSD $26 million, leaving over a $12 million shortfall. Additionally, only ten percent of our students are classified as “unduplicated” (i.e. students with specific needs that garner schools additional funding) compared to sixty-three percent of San Diego Unified School District’s student population. That puts CUSD at a distinct disadvantage when vying for additional state funding.

To make matters worse, CUSD can’t opt out of LCFF until the city and the district pay back its redevelopment debt, which will take another seven years according to current projections. However, if student enrollment continues to decline (CUSD is already down 15% compared to last year’s enrollment), how much further will our entrance into Basic Aid funding (the ability to utilize local property taxes for CUSD) be pushed to the right?

The fact of the matter is that for years the district has been spending more than it can afford. Furthermore, in its attempt to avoid cutting schools programs, CUSD has been dipping into its reserve budget to cover its budgetary shortfalls. The bridge loan plan was formulated to get CUSD to 2026-2027 when Basic Aid funding will bring much needed district funding relief. However, Covid-19, an aging infrastructure and a fifteen percent decline in student enrollment have exacerbated CUSD’s financial woes. Regrettably, it will get worse before it gets better.

Throughout this campaign, there have been those who have made utterances about finding “creative solutions” to solve CUSD’s financial woes. Since no specifics have yet been offered, one can only conclude that most of these remarks are just platitudes to harvest votes rather than getting to the crux of the matter. Quite simply, the district needs to learn to live within its means. No one likes to say we need to “cut costs” or “trim the fat,” however, that’s the harsh reality that CUSD faces to get back on track. It’s time to slim down and tighten the belt.

Creative solutions may sound great but my experience in M&A, auditing, transfer pricing as well as serving three years on a university budget committee tells me otherwise. There are no panaceas for financial situations that are this complicated. The best solutions start with scrutinizing budget line items, investigating spending habits and making cuts when needed. That’s how we begin to solve CUSD’s fiscal dilemmas. As your trustee, I will diligently work with board members, the superintendent and district staff to come up with sound fiscal solutions that put our finances in good order to ensure our children have the benefit of an exceptional education.

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