SR-301-001-01 (4)
Council Meeting: December 16, 2003 Santa Monica, CA
TO: Mayor and Council Members
FROM: City Staff
SUBJECT: Discussion of Options for Providing Greater Certainty to the School District
Regarding City Payments for Public Use of School Facilities
Introduction
This report responds to the interest of City Council members in discussing and providing
preliminary direction to staff regarding longer-term mechanisms by which the City might
pay the Santa Monica Unified School District for use of school facilities by the
community, thereby providing the District with greater certainty about revenue.
Background
At present, the District and City execute a master contract annually that provides for use
of school facilities by the public. Ongoing funding for that purpose in the amount of $3
million annually has been in place for several of years. Ongoing payments to the
District have never decreased, even during the economic downturn of the early 1990’s.
From time to time ongoing City payments have been augmented by the dedication of
one-time City funds at varying significant amounts. In addition, the City reimburses the
District for direct costs associated with specific public programs on school facilities such
as CREST and the Playground Partnership through sub-agreements to the master
contract.
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Members of the school community have approached City Council members to
encourage a longer-term approach. While it might be preferable to consider the issue in
conjunction with other community priorities during the annual public hearing scheduled
this year for January 27, 2004, several Council members have contacted the City
Manager about it in recent weeks and it is consequently appropriate to agendize the
matter for public discussion.
Discussion
Responsibility for funding public education in California rests with the State. The courts
have found that the State has an obligation to provide funding so that public school
students statewide receive equivalent educational opportunities. The State system of
funding education is largely based on per-pupil formulas, a system that tends to benefit
Districts with growing, high enrollment. State funding is fragmented, replete with
categorical programs that limit the ability of Districts to direct funds to current needs and
is widely considered by Districts statewide to be inadequate even during periods of
healthy economic activity.
The Santa Monica-Malibu District is generally regarded as better funded than many
Districts. While enrollment fluctuates from year to year, with differences from school to
school and from jurisdiction to jurisdiction covered by the District, it is a District with
limited growth potential. Local school administrators and advocates view State funding
as inadequate to meet their aspirations on behalf of students in the District. The District
has consequently approached the voters several times over the years and received
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support for local parcel taxes that augment State funding. Notwithstanding that
additional revenue stream, advocates consider the District’s revenue to be below
desirable levels and the City Council is approached on an annual basis to increase City
payments to the District.
Few California communities attempt the type of mutually beneficial partnership that the
City and SMMUSD have pioneered. Joint use of facilities is not uncommon, but
substantial lease payments by municipalities to Districts are rare. In Santa Monica’s
case, District boundaries are not contiguous with the City’s and the other units of
government which the District serves provide it with modest or no revenue.
Individual Council members have inquired whether a longer-term master contract at
higher ongoing funding levels might be possible, perhaps financed by new revenue
streams that the City and District might cooperatively pursue. There may also be
interest in exploring whether the City might employ one-time funds to purchase District
property to benefit open-space and other community objectives. To evaluate the
viability of those and other options, considerable staff work will be involved and action
by the full Council to provide appropriate direction is warranted.
In holding this discussion, it may be useful to consider the fiscal context in which the
City is operating. Staff is finalizing the five-year forecast of revenues and expenditures
that begins the budget process. Greater than normal uncertainty surrounds the
forecasting process this year as the State’s structural imbalance is not resolved and an
extraordinary number of State, regional and local ballot measures that could affect local
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government finance are contemplated for presentation to the voters during spring and
fall elections in 2004.
At this time, staff anticipates that it will be necessary to implement budget parameters
similar to those outlined in the plan for 2004/05 that was presented to Council in
conjunction with the current budget. That plan responded to the continued need to
restrain projected ongoing expenditure growth to bring it in line with projected revenue
growth. More specific information will be provided to Council and the community during
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the mid-year report and community priorities hearing on January 27.
Budget/Financial Impact
No budget impacts are anticipated to identify and analyze funding options. Any
incidental direct costs can be absorbed in departmental budgets.
Recommendation
It is recommended that the City Council deliberate and provide preliminary direction to
staff regarding possibilities for longer-term mechanisms of support to the Unified School
District in exchange for public access to school facilities.
Prepared by: Susan E. McCarthy, City Manager
Steve Stark, Director of Finance
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