Of the Advocate
Despite the lack of a state budget, falling real estate values and other disturbing economic news, the Fort Bragg Unified School District started the year with smiles and a new superintendent.
The board heard a report from Lennard Cuenco, from the firm Caldwell, Flores, Winters, the district”s bond adviser, at its inaugural meeting of the 2008-2009 school year on Aug. 14.
Recent stock market turbulence is actually good news for the district”s new bond-buying effort. Investors are moving money out of the stock market and into bonds, resulting in lower interest rates for those needing to borrow money financed by bonds.
Even the steady decline in real estate values across the nation is much less a problem for Fort Bragg schools than for most districts with new bonds. The larger than normal local stock of long time residents who have never sold their homes promises long-term assessed valuation growth no matter what happens to sale prices locally.
Whatever the news from high finance, school started Aug. 18 in Fort Bragg.
New FBUSD Superintendent Donald Armstrong, now a Westport resident, escaped with an uncharacteristically short meeting by local standards — less than two hours. He promised staff members shorter board meetings, then got nervous laughter when he knocked on wood. Board meetings in the past have often gone four hours, even passing midnight on more than one occasion.
The Aug. 14 meeting covered everything from worries about ongoing pollution issues from diesel fuel following removal of underground storage tanks to some brand new outdoor basketball courts constructed in response to Mendocino County Grand Jury criticism.
Cuenco is working with the district on a $7.5 million bond sale that will provide money for finishing renovations at Dana Gray Elementary School and starting the first upgrade of Fort Bragg High School since the 1960s. That first sale will be followed in a few years by a second sale.
While the maximum of an additional $16 per $100,000 in assessed value was locked in by the vote, Cuenco described how lower rates can result in faster payback and a shorter time the tax will stay on the rolls. Property taxes will be increased by the $16 in the 2009 tax year.
This is the second bond sale of the new millennium. The first bond sale came just as the real estate market surged upward in sales volume and sales prices, bringing in money much faster than anyone had expected.
Unfortunately, renovation costs shot through the roof, due to severe dryrot in the middle school and skyrocketing costs of wood, concrete and steel. That helped lead to the need for the second bond, which local voters approved in November by just over 66 percent. Sixty percent was needed to pass.
In 2008, the real estate market locally and nationally is down dramatically. But thanks to the numbers of homes that have not been sold since the mid- and late 20th century, the district can count on steady increases to assessed value.
For example, a house that sold for $60,000 in 1980 will still be worth about five times that amount today, as opposed to six to seven times that amount two years ago.
Under Proposition 13, California home assessed values are based on the most recent sale, meaning that a home shows on the district”s books as worth the original amount plus inflation. When it does sell, it pushes up the district”s bottom line. Fort Bragg has far more such homes than most other communities in California, real estate records show.
With the bond sale coming at a time when interest rates will be low, Armstrong hoped to nail down the best rate possible with a personal visit last Friday to the offices of Standard and Poor”s in San Francisco. Cuenco advised that a personal visit by the superintendent can make a difference in the interest rates district property owners will pay.
“The conventional wisdom is to go and make a personal appearance. They are looking at how reliable the district is fiscally. Personality is a piece of that,” Armstrong said.
Former Superintendent Steve Lund, who Armstrong replaced in July, did the same before the last bond sale.
“Steve did it the last time, apparently quite favorably,” said Armstrong.
As well as the stability created by the many undervalued homes on assessment rolls, Armstrong planned to talk about how Fort Bragg has changed its economic engine to tourism, from its traditional logging and fishing base.
“One tact is to discuss the vibrancy of the changed economy here,” he said.
One economic downturn that threatens school district coffers, both in Fort Bragg and the rest of the state, is the decline in construction. Developer fees in the amount of $2.24 per square foot are now levied on residential construction and 36 cents per square foot on commercial building. These fees benefit the school district. Because construction activity has plummeted, so have fee collections.
Armstrong explained to the board that the State Allocation Board adjusted the maximum that the district can charge to $2.97 per square foot for residential and 47 cents per square foot on commercial.
The district has a justification study completed that authorizes an increase of up to the current maximum of $2.97.
“The local developer community has supported our bond issues. The board might want to consider not raising developer fees to this rate,” Armstrong said.
But trustees DeeLynn Carpenter and Jennifer Owen said more information is needed before a decision is made.
Carpenter said the levy is the only option for the district to get new moneys in an uncertain growth and budgetary environment.
“In the 2007-08 fiscal year, our developer fees collection is down approximately 55 percent, going from over $200,000 in 06-07 collected to just over $90,000 collected in 07-08,” Armstrong said.
Trustees will consider the issue of the fees at their Sept. 9 meeting.
Also to be considered at a future meeting is the state budget, which continues to be in limbo. Schools depend on the state moneys to pay bills. A frozen budget also means grants are often in limbo. Budget planning was discussed, but with the state stalemate continuing, locals can only wait to meet.
Another unresolved mater with the state is the status of cleanup of an underground diesel fuel storage tank at Fort Bragg Middle School. The district is monitoring soil pollution at the site. The fact that the State Water Quality Control Board has not released the site creates some budgetary uncertainty, Facilities Manager John Griffiths said.
A piece of good news is that new outdoor basketball courts were completed in time for the start of school for Fort Bragg”s three alternative schools, Noyo, Lighthouse and Shelter Cover.
The Mendocino County Grand Jury criticized the district for not completing the previously funded improvements, as part of a lengthy report, which came with seven recommendations, which the district mostly acquiesced to. The board packet included official responses to the recommendations in the report.
While basketball hoops will benefit students at risk, the board also heard about a new state-monitoring program for dropouts. Ten digit numbers are being used to track students, so they won”t be considered dropouts when they enroll somewhere else.
Armstrong reported the statewide dropout rate at 24.2 percent, with the county rate at 20.6 percent. Fort Bragg has a rate of 11.7 percent, better than Ukiah, Willits and Mendocino, he said. The highest rate belongs to the Round Valley School District, which has a 38 percent rate.
Armstrong said the alternative schools, Noyo and Lighthouse, had the highest percentage of dropouts. In response to a question from a board member, he said the Latino community fared well in the numbers, with Anglo students accounting for the high percentage of dropouts at alternative schools in the figures.
Armstrong, who sported a white suit and black polka-dotted tie, started off with a welcome from the board. As was sometimes the case last year, Rosalie Gjerde was the only member of the audience who wasn”t there for a specific agenda item.
But board meetings are broadcast live on MCTV, with some rebroadcasts.
“The district and all the people I have met have been welcoming. I have been a superintendent for 15 years but this is the first time I have been on TV as superintendent,” Armstrong said.
