Feb 16 2013

Superintendent Corrects Statements by Measure A Proponent

Memorandum Issued by Piedmont School Superintendent Constance Hubbard -

February 14, 2013

It has come to my attention that erroneous information and conclusions about the use of funds from the sale of surplus property in San Marino Unified School District are being discussed. We are often compared with San Marino in terms of size of student population and achievement levels, community socio‐ economics and expectations.There have been comparisons cited and conclusions drawn by some Piedmont residents as to the San Marino District’s use and need for funds for their ongoing operations.

It is not appropriate for individuals not part of the continuing/historical discussions that have taken place in the San Marino community to make public declarations about their budgeting process. Piedmont and San Marino School Districts have made choices appropriate for their communities and budgets.

I have confirmed with Superintendent Loren Kleinrock that the District sold to the City of San Marino an elementary site that has not been used for years and had most recently been leased to the City for use for student recreation programs. The lease and sale were structured to allow the proceeds to be available to the San Marino District in their General Fund reserves during this unique opportunity for flexibility by the State of California regarding rules governing the sale of surplus property.

Superintendent Kleinrock also clarified that the sale of the property was not related/required due to the increase in requests for senior exemptions from the school parcel tax assessments from 183 ten years ago to 1200 so far this year.

Please be mindful of how small our world is when comparing school districts.  Decisions about class size and support services such as counseling and librarians are ones that must be made at the local level for each District, and taken into consideration in the comparison of any districts.

Superintendent Constance Hubbard

Editors’ Note: The memo by Superintendent Hubbard clarifies comments made at the League of Women Voters of Piedmont Election Forum on February 7.  Measure A Precinct Manager and panel member, Jonathan Davis, speaking on behalf of  Measure A made the following argument:

I’ll quickly address San Marino as a comparable community. San Marino, they have a senior exemption and in the last four years have seen an 800% increase in participation in the senior exemption. As a result the school district in San Marino has had to sell a school that they previously leased and were earning millions of dollars of rents on. They had to sell the school for $6 million and now they’re burning through the money.”

As noted above in the Piedmont Superintendent’s memo the sale of the San Marino school property was unrelated to senior exemptions, and the senior exemptions did not increase 800% in the last four years.

The 1929 San Marino school had not been used by the San Marino School District since 1984 and discussions about its sale had been reported in the local press since that time.  The school was sold in 2012 to the City for $1 million, rather than $6 million.  Prior to 2009, rental fees were deposited in the District’s Deferred Maintenance Account.

To watch and hear firsthand a video of the entire LWV Measure A forum,  click here  or log onto the City’s website at www.ci.piedmont.ca.us: on the right hand side of the homepage under the “City Council” heading, click on the “Online Video” link, then search the archive for “LWV Election Forum”, click on the “Argument for Measure A” and/or “Argument Against  Measure “click on the “Video” link and watch.

5 Responses to “Superintendent Corrects Statements by Measure A Proponent”

  1. The problem is that this erroneous statement went out over KCOM and was undoubtedly seen by quite a few voters. But the correction …. how will IT be disseminated?

  2. While the sale of the San Marino school property was not driven 100% immediately by the increase requests for senior exemptions from San Marino’s parcel tax, it is clear that those additonal exemptions had an effect on San Marino School District’s revenues (obviously). It is not erroneous to conclude (in fact, it’s patently obvious) that SMUSD would have had to make cuts to its budget (cuts which may have resulted in a lower District API score– even if that were an appropriate yard stick with which to evaluate the educational worth of several thousand students). It is also clear that the money ($6.0MM TOTAL– this figure is NOT erroneous either– the sum of a $5.0MM initial 99-year lease agreement, plus an incremental $1.0MM to extend the long-term lease to outright ownership of the school site) is being utilized right now, as we speak, by the San Marino School District to fund its annual District operations.

    It is a statement of fact that, if this money were NOT available, the San Marino District would need to a) cut its annual budget by an equivalent amount or b) raise the funds elsewhere (more ‘expected donations’ from parents, perhaps?), or c) borrow the money and incur incremental debt-servicing expenses. This is pretty simple math and these are facts that have been reported by the San Marino School District’s Budget Director.

    Whether or not the increases in senior exemptions were the absolute primary reason for the sale of the property or whether there were good reasons for the sale otherwise, is sort-of irrelevant (unless you’re just arguing for argument’s sake). Nobody is blaming seniors here, there are simple economic facts, money in, money out, if those amounts are not equal, something has to be done.

    The fact is that the sale was conveniently timed (as Ms. Hubbard said, the State of CA, in response to the economic crisis, allowed increased flexibility and discretion by Districts to dispose of underutilized properties in recognition of the fact that the State was imposing SEVERE, YEAR-OVER-YEAR budget cuts to public education– amountin, in fact, to 20% of the education budget) and the funds from the San Marino school site sale have allowed San Marino to fill a budget deficit.

    Any questions?

  3. There’s not much news that needs to be disseminated, in fact. Ms. Hubbard’s corrections to Mr. Davis’s statement are technically correct, but overlook the bigger picture of San Marino School District’s budget deficit and how it has actually been filled for the past several years (utilizing funds from the sale of the underutilized school property).

    While the sale of the San Marino school property was not driven 100% urgently by the increased requests for senior exemptions from San Marino’s school parcel tax (as was implied in Mr. Davis’s statement) it is clear that those additonal exemptions had an undeniable effect on San Marino School District’s revenues. It is not erroneous to conclude (in fact, it’s patently obvious) that SMUSD would have had to make cuts to its budget (cuts which may have resulted in a lower District API score– as IF that were even an appropriate yard stick with which to evaluate the educational worth of several thousand students in the first place, but I digress…). It is also clear that the money ($6.0MM TOTAL– this figure is NOT erroneous either– the sum of a $5.0MM initial 99-year lease agreement, plus an incremental $1.0MM to extend the long-term lease to outright ownership of the school site) is being utilized right now, as we speak, by the San Marino School District to fund its annual District operations (to fund its expenditures in excess of its current revenues).

    It is a statement of plain economic fact (we all know about budget realities) that, if this money were NOT available, the San Marino District would need to a) cut its annual budget by an amount equivalent to that which it is spending annually in excess of its revenues or b) raise the funds elsewhere (more ‘expected donations’ from parents, perhaps?), or c) borrow the money and incur incremental debt-servicing expenses. This is pretty elementary math and these are facts that have been reported by the San Marino School District’s Budget Director.

    Whether or not the increases in senior exemptions were the absolute, primary, immediate reason for the sale of the school property or whether there were good reasons for the sale otherwise, is sort-of irrelevant to the conversation of whether Piedmont should allow a senior exemption from our school parcel tax (unless you’re just arguing for argument’s sake). Nobody is blaming seniors here, these are simple economic facts– money in, money out, if those amounts are not equal, something has to be done.

    Certainly, the sale was conveniently timed. As Ms. Hubbard admitted, the State of CA, in response to the economic crisis, allowed increased flexibility and discretion by Districts to dispose of underutilized properties in recognition of the fact that the State was imposing SEVERE, YEAR-OVER-YEAR budget cuts to public education– amounting, in fact, to 20% of the State’s education budget. This relaxation of the property disposal rule was allowed to prevent more School Districts from taking on overburdensome debts which have driven many CA School Districts into insolvency. It is not a stretch to say that the funds from the San Marino school site sale have allowed San Marino to fill its annual budget deficit to avert debt during the crisis. It is also not clear how San Marino intends to fill this budget deficit once this money runs out– the choices are limited…

    So, to the case of Piedmont and our parcel tax’s structure and its relevance to this debate:

    Since Piedmont does not have a school site to sell like San Marino, and if we were to offer a senior exemption from our parcel tax, how would we equitably and legally (remember, Prop 13 puts a LOT of restrictions on raising revenues) fill our budget deficit? That is the question that Measure A opponents have not answered. They concede that, overall, Piedmont needs $9.5MM in local funds to adequately provide public education to our children, calculated to be $2,406/parcel. If we exempt 30% of our parcels (the approx percentage owned by seniors– this includes seniors under Prop 13’s tax shelter who are renting at full market rates to families with children in the schools), well, let’s do the math, shall we? Hmmm, we would need to raise the parcel tax on the other 70% of parcels to $3,591 to make up the difference– parcels which, incidentally, are already paying between 2 and 20x the assessed value of many equivalent senior-owned parcels in property taxes to support the schools. Is this equitable? Is there a correlation bet/ seniors, or, specifically, low-income seniors and small parcels? No one has given me this information– it would be interesting to examine.

    I’d be happy to consider other options to solving this problem together as a community. I am dismayed that the legal boundaries appear to be so restrictive for a more variable funding solution– I certainly wish we had been allowed to continue our tiered parcel tax system. I (perhaps history will prove my trust to be naive) trust that our School Board officials believe they are asking for the best long-term solution for local school funding that they can legally ask for at present. I can certainly understand why, in the face of ongoing recrimination of reckless liabilities taken on by our City for other public/private projects, why the School Board would steer a more legally conservative course. Hind-sight is a cruel and forgetful judge.

  4. You are assuming that all seniors would request the voluntary exemption. That is a worst case scenario and not based on any fact. You are presuming that Piedmont seniors, many of whom are financially well fixed, would not value the schools to which their children went and possibly their grandchildren are attending. What makes you think that once people reach the age of 65 they lose all sense of civic responsibility?

    There is nothing under the Borikas decision that prevents Piedmont from adopting a UNIFORM parcel tax based on X cents per square foot. That would be equitable where the current proposal, or any proposal of $X,XXX per parcel, is inherently inequitable by design.

  5. I don’t assume that once citizens become seniors, they lose all sense of civic responsibility. In fact, just the opposite. I stated earlier that I was fairly certain that a good proportion of the homeowners (seniors included) whose school parcel taxes will be reduced under Measure A would, in fact, donate their savings to the Piedmont Education Fund to support excellence in Piedmont’s schools (recognizing that the tax is regressive, not to the preferences of ANYONE in Piedmont) and recognizing that this tax is structured the way it is simply to avoid future potential legal and administrative entanglements.

    The fact that seniors in Piedmont have consistently demonstrated a commitment to civic responsibility is the very reason that our school parcel tax has passed 6 times (even with the undemocratic, super-majority requirement imposed by Prop 13) over the last 27 years and which is why it will pass again on Tuesday with the blessings of the majority of Piedmont seniors. Thank you for your votes to extend the legacy of high-quality public education in Piedmont while buttressing the significantly higher property values of each and every parcel.

    To the point about the tax being structured as an amount per sq ft of parcel size, I believe Mr. Schiller stated (citing a specific government law: AB number yadda-yadda, paragraph this, article that) that that structure is only currently legal for Community Colleges and would require state legislative intervention to alter it.

    To that end, as soon as Mr. Schiller mentioned this point, I *immediately* called Nancy Skinner, our State Assembly representative and talked to her Education staff person about this issue and asked how I could advocate for this change. I took the additional step of hiring a sitter to look after my young children during our family dinner hour and went *in person* to Nancy Skinner’s Oakland office’s Open House in January to ask about expanding this option for K-12 schools. I spoke directly with her Chief of Staff and have communicated with 2 of her staff members about this issue since then.

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