Despite recent hot temperatures, we know Fall is right around the corner. And with the change in seasons, many of us may be thinking of doing some Fall cleaning — those neglected chores such as washing windows, dusting blinds, or vacuuming those unseen spots under the couch and bed.
Ultimately, it’s about getting things in order so that you and your household can function at its best.
Likewise, when I became superintendent of the Poway Unified School District over five years ago, one of the goals set for me by the Board of Trustees was to get our financial house in order. The district was reeling from a barrage of negative reports about its finances, with accusations of mismanagement and questions around the District’s transparency.
An independent audit determined the district needed to drastically improve its business practices. The budget was in a structural deficit, the district’s credit rating was moderate at best, and taxpayers were saddled with a billion-dollar capital appreciation bond. In short, my new leadership team and I inherited many challenges.
Just like you don’t normally your Fall cleaning endeavors or complete it in a single attempt, over the last five years, we have been quietly and diligently chipping away at these financial challenges. We have reshaped the way we conduct business step by step, ensuring we are transparent in our work, and building trust and credibility along the way.
Despite all our hard work and efforts, we still face ongoing criticism that the district is making “bad financial decisions,” which is misleading and inaccurate. To continue to dwell on the past prevents us from moving toward a better future.
Back in 2017, the Board of Education and I realized we had a lot of work ahead of us to earn back our community’s trust, and it needed to start with our leadership. Our first order of business was to hire an experienced, ethical, and fiscally responsible Chief Business Officer. Associate Superintendent Ron Little is well respected in his field and has over two decades of experience in both K-12 and Higher Education.
Together, we have made incredible progress toward creating a new era of sound fiscal management and business practices at PUSD. Some of our accomplishments over the past five years have included:
•We refinanced general obligation and special tax bonds, saving district taxpayers nearly $25 million thus far
•We implemented the Special Tax Reduction Plan for our Community Facilities Districts (CFDs), which is estimated to save Mello Roos taxpayers nearly $1.2 billion over the life of the bonds
•Our district credit ratings were upgraded 10 times by Moody’s and Standard & Poor’s based on strong fiscal management practices and sound fiscal controls
•We resolved 53 audit deficiencies, by enhancing internal controls and fiscal transparency
(For example: implementing a position control and employee time ing program, requiring s to take their vacation time so as not to accrue excessive payouts, and establishing strict parameters around who can use District purchasing cards)
•We established and funded an Irrevocable Trust to fund retiree benefits, thereby decreasing the district’s associated liability and reducing impacts on the general fund
•We are leading the state in the ratio of alternative fuel vehicles in our busing fleet, reducing the reliance on gas-powered engines (nearly 30% of our current bus fleet)
•We entered into Power Purchasing Agreements with SDGE to construct solar arrays at 14 school sites to date, eventually reducing our electric bills and our reliance of the local electrical grid
Poway Unified is in its best financial position in decades. Our general fund reserves are back at the state-allowed maximum and our revenues finally exceed our expenditures. We’ve addressed the district’s structural deficit while still allowing us to provide wage increases for our hardworking employees so salaries can remain competitive.
We have also been able to prioritize innovative and award-winning programs for our students such as expanded global language and career technical education as well as social/emotional and mental health s with added counselors, psychologists and social workers.
However, one persistent challenge remains: we have often stated publicly that the district receives no funding for school facilities upgrades and modernization needs. This is a true statement, no matter what you hear. School districts are required by the state to dedicate 3% of our annual operating fund expenditures, our General Fund, to “routine” maintenance activities.
These are tasks required just to keep our doors open and our schools safe, often preventative in nature, such as replacing failing doors and windows or replacing the filters in our numerous ventilation units. Unfortunately, large ticket items such as replacing failing HVAC systems, or replacing failing sewer lines, fall under deferred maintenance or capital projects, categories for which we receive no state funding.
As our schools age, the facilities needs across 41 campuses and the associated costs to address them have grown to over a billion dollars. This far exceeds the capacity of the limited and targeted resources of our General Fund.
If you would like to understand more about school finances, we hold regular budget updates at our monthly Board Meetings as well as informational meetings which are open to the public. In fact, our next school funding community forum will be held on Tuesday, October 25 at 5:30 p.m. at the PUSD District Office. It will also be recorded for those who cannot attend.
One of our district goals is to continue to build strong partnerships with our community, and we pride ourselves on being fiscally responsible and transparent. Before making blanket statements and assumptions about our financial management, we ask that you please seek to understand and ask questions first. All district financial reports are available on our website, as well as the information of people you can reach out to for additional information.
As a community, we all want the same thing: to have top quality schools and educators and thriving children who grow up to be leaders and positive citizens in our community. A financially sound school district allows us to achieve that.
Phelps has been the Poway Unified School District superintendent since April 2017.
