RDA funds will ease schools’ deficit
While the continuing money from former redevelopment agency funds will help to reduce deficits in the next three years, the Sonoma Valley Unified School District will still have to make good on it “fair share” check to Sacramento.
Deputy Superintendent Justin Frese told the school board Tuesday night that the continuing – or residual funds – should reduce projected deficits dramatically in the next two years. But the money won’t eliminate the deficits.
Residual funds represent any funds that are left after obligations from the now dissolved redevelopment agencies. The school district covered two redevelopment areas – the City of Sonoma and the Springs.
Earlier this month, the district found out that it was getting more than $2.3 million from the agencies, with $1,307,960 coming from the City of Sonoma and $1,059,082 from the Springs redevelopment area. About half the money, $1.22 million, is one-time revenue, or asset distribution funds, while $1.14 million is comprised of residual funds and will probably become on-going funding, although the amount would probably change from year to year.
Frese told the board that, with the residual money, the $1.4 million deficit in 2013-14 could shrink to $244,000, while the $1.7 million deficit in 2014-15 could shrink to a projected $578,000.
He told the board that while the redevelopment agencies have been dissolved, the obligations – especially bond payments – will live for a while and in some cases another 25 years or so. “While they can’t take on any new debt, they have bonds to pay off,” he said.
Because of the redevelopment money, the board won’t have to make any cuts this year. And the district can buy back the five remaining furlough days that it instituted when it made $2.6 million in cuts early in 2012.
“If all the furlough days go away, we still have deficits – but they’re smaller,” Frese said.
And he told the board he’d have a list of priorities for spending some of the money as soon as next month.
But despite the infusion of redevelopment money and the passage of Proposition 30 back in November, the district will still have to come up with $2.8 million as its “fair share,” which makes the redevelopment money almost a wash.
The “fair share” is the money the district has to send back to the state because it is a “basic aid” district instead of a “revenue limit district.”
Basic aid districts get most of their revenue from local taxes, whereas the generally less-wealthy revenue limit districts have the state backfill the difference between local taxes and state limits.
Since the state can’t cut Sonoma’s money, it makes Sonoma and other basic aid district pay a kickback, or “fair share,” as the state prefers to call it. In the past three years, Sonoma has paid more than $5.2 million as its “fair share,” and it will cost the district another $8-plus-million over the next three years.