San Diego

State Denies SUHSD's Appeal to Budget Revisions Requested by County Office of Education

The state has weighed in on an ongoing budget feud brewing between the county and a school district in the south bay.

The California Department of Education sided with the San Diego County Office of Education (COE) in a letter sent Monday, saying the Sweetwater Union High School District (SUHSD) must make revisions to its budget as requested by the county.

The SUHSD appealed the revision request to the state earlier this month after the COE determined the district would not meet its financial obligations for the 2019-2020 fiscal year without making budget cuts upwards of $7 million. 

The state said the county's requests didn't meet the appeal criteria, and said the SUHSD must implement the budget revisions set forth by the COE.

Among those revisions are two to-be-negotiated furlough days that would save $3.8 million and revisions to salaries and benefits that would save the district around $3 million. The COE also wants the district to come up with a Fiscal Recovery Plan for the 2020-21 and 2021-22 fiscal years.

A letter sent to the district on last week detailed the SUHSD's debt problems. For example, the letter said the district is:

  • counting on savings from negotiations with unions that have yet to be agreed upon
  • on track to exceed what it had budgeted for salaries and benefits
  • needs additional money to pay back borrowed Mello-Roos funds.

But the district disagreed with the county's assessment of their budget woes and voted 4-1 to file an appeal to the California State Superintendent of Public Instruction challenging it. 

Changes the district has made resulted in an approved 2019-20 budget by the county, a fact the district pointed to in their appeal as a reason budget changes are not necessary. 

But the COE said it only approved the budget so it could continue to work with the district to restore its financial stability.

The clash between the county and the South Bay school district has been ongoing since a $30 million budget shortfall came to light in September 2018. 

At the time, the COE said Sweetwater's budget overstated how much money it would actually receive and understated how much money it was budgeted to spend, specifically on salaries and benefits.

Since, the SUHSD has been reworking its finances -- making budget cuts, offering early retirement and cutting programs -- to make up for the deficit. 

In August, the SUHSD refused to accept a no-risk loan from the COE to help it payback the $12 million borrowed from the Mello-Roos fund. The district said it is in position to repay its debt to the Mello-Roos, with interest, by 2020.

The district has been criticized for using the Mello-Roos funds -- which comes from taxes on homeowners and is supposed to be used for construction, renovation and modernization of schools in the district -- to meet day-to-day operating expenses.

Because the district didn't pay back the funds by June 30, the district is out of compliance with the rules governing Mello-Roos borrowing.

The COE oversees all districts to make sure they can meet their financial obligations.

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