School Closure: What do we do now?

1. APRIL 3-6, 2013, LONG BEACH, CA School Closure: What do we do now? These materials have been prepared by the CASBO Accounting Professional Council. They have not been reviewed by State CASBO for approval, so therefore are not an official statement of CASBO.

2. Your Pit Crew Southern Section Accounting Professional Council • Megan Asselin, CPA – Vicenti, Lloyd & Stutzman, LLP • Laura Castillo – El Rancho USD • Shilo Gorospe, CPA – Vavrinek, Trine, Day, & Co, LLP • Rick Holash, CPA – Whittier Union HSD • Rick Jensen – Mountain View SD • Priscilla Osborne Flores, CPA – Vicenti, Lloyd & Stutzman, LLP

3. We Closed It…Now What??? • How did we get here? • Successful closures • Refer to “Closing a School Best Practices Guide” available from CDE website… • www.cde.ca.gov/ls/fa/sf/schoolclose.asp

4. Collect and Analyze the Data • Form an informal committee (Pre 7-11) to do initial research into possibility of closing a site • The decision to close a site is far-reaching, affecting students, parents, community, and staff • Factors to consider in closing a site: declining enrollment, declining revenues, facility up-keep cost/modernization, options for the closed facility (Revenue stream? Reduction in costs?)

5. Collect and Analyze the Data • Consider on-going maintenance • Open charter petitions • Initial committee discussions • Guidance from experts prior to decisions

6. First Decision: Close the Site • If the Pre 7-11 Committee determines that closing the site is advantageous, convene the more formal 7-11 committee

7. 7-11 Committee • EC 17387-17391: Forming a District Advisory Committee • 7 to 11 committee members • Follows Brown Act (GC 54952.3) • Considers both closing of the site and disposal of the site (cannot separate!)

8. 7-11 Committee (cont.) • Members include (EC 17389): • Demographic representation • Business community • Community residents/residential organizations • Teachers • Administrators • Parents of students • Experts

9. 7-11 Committee (cont.) • Not mandatory, but highly recommended • Key stakeholders in the decision • Experts in facilities, statutes, zoning, etc. • Process is transparent, credible, objective and non-political • Fact gathering • 7-11 Committee provide recommendations • Board may reject recommendations and approve another option • Board and Superintendent should not be on committee • A district administrator, consultant or a committee member should chair the committee

10. Gathering the Facts • Enrollment projections and impact on surplus space • Inventory of facilities and condition • Cost of operating each facility (per student) • Program offerings at each site • Evaluation of specific schools for closure • Environmental and safety concerns for each site

11. Gathering the Facts (cont.) • Possible cost-savings for each site to be closed • Identify housing/transportation options • Benefits of each property disposition/use option • Recommend transition strategies • Recommend schools to be closed to the Board • Impact of school closure on district’s insurance

12. Alternatives to Closure • Expand CSR to create a need for more rooms • Dispose of portables or leased facilities • Restructure grades to balance school enrollment • Reorganize school boundaries • Close surplus classrooms • Use surplus rooms/facilities • Joint-use agreements with city/other districts

13. Alternatives to Closure (cont.) • Convert to community day school • Convert to small high school • Lease to charter school (Proposition 39) • Shift to full-day Kindergarten • Start a universal pre-school program • Consult with National Trust for Historic Preservation (“vintage” sites)

14. Deciding Which School to Close • The most obvious criterion • School with declining enrollment… • Not necessarily the best… • Consider other factors…

15. Deciding Which School to Close (cont.) • Condition of a school facility • Operating cost of a school • Capacity of a school • Special program facilities • Environmental factors • Ethnic balance

16. Deciding Which School to Close (cont.) • Transportation • Neighborhoods • Education program • Aesthetics • Value • Stadium • School name • City Council

17. Making the Decision • Recommendation to the Board of Education • Conduct public hearings • Transparency and communication are key • Illustrate factors affecting decision • Discuss what is at stake • Describe benefits and provide solutions

18. Making the Decision (cont.) • Discuss proposed uses for closed school • Board to take action

19. District Transition Team: Composition Public Information Officer (Point Person) Pupil Services/Student Services Chief Business Official Human Resources Department Staff Consultant Facilities Staff

20. District Transition Team: Responsibilities Student and staff re-assignments Textbook and instructional material allocation Adequate facilities Move or store furniture or equipment Fielding calls from concerned parents Follow up if no receipt of communication is indicated

21. From Decision To Close -> To Closure Planning and logistics to service the displaced: Sufficient facilities and classrooms Textbooks/materials/furniture from old site Parking Reconfiguring parent drop-off and bus loading Transportation and routing Communication!!

22. From Decision To Close -> To Closure (cont.) Communication Be as positive as possible Should include Reason for site closure Important time lines Identified new school for students Transportation arrangements Teacher reassignments

23. From Decision To Close -> To Closure (cont.) Communication (cont.) Simultaneous to teachers/staff and parents. Direct mail to parents Tracking purposes Ensure information is received

24. What to do after you have closed a school facility? (Disposing of Property) • Vacant schools = district liability • Maintenance • Security • Insurance Coverage • Consider • Re-use • Lease • Sell

25. Consider… • How long will site be closed? • Length of time will determine which option is most advantageous • Short-term (1 to 5 years) • Long-term (6 to 60 years)

26. What is my facility zoned for? • Check with your City Planner • Rezoning can be costly and political • Consult a Land Use Lawyer • Separating – Green Space/Buildings • Open space (Ed Code) • First to City and Parks and Rec. for actual cost of property

27. Repurpose your Facility • Use it for something you need! • Training or conference center • SELPA Office • Create Central Kitchen • Be Creative

28. Considerations when Renting out your Facility • Surrounding neighborhood • Responsibility for maintaining facility and grounds

29. Renting out your Facility • Consider all the selling points… • ADA compliant • Front office • Restrooms • Parking lot • Outside eating area • Playground

30. Who would want to rent my site? • Other educational institutions • Local organizations • Medical clinic/facility • Partner with your city

31. What makes your site attractive? • Auditorium • Pool • Gymnasium • Theatre • Location, Location, Location

32. Selling your Facility • Declared surplus • 7-11 committee mandatory • Assess current market conditions • Facility built with bond funds • Property cannot be sold • 7 year holding period

33. Disposing of School Property • Ed Code 17462 • Sale or Lease with option to purchase • Revenue received must be used to for capital outlay • Revenue deposited into General Fund Restrictions • State Allocation Board must determine the district has “no anticipated need for additional sites or building construction for the next ten years.” • Some exceptions Ed Code 17463 and 17643.6

34. Disposing of School Property (cont.) • Ed Code 17463.7 • Allows one-time flexibility • Ed Code 17464 • First - Offer to Charter School (Ed Code 17457.5) • Second - Offer for park or recreational purposes (Ed Code 17459) • Third - Offer for sale or lease with an option to purchase at fair market value

35. Disposing of School Property (cont.) • Types of Zone Options • Legal Rezoning a Property • Conditional Use Permit • “as a matter of right” • Specified conditions • Variance

36. Disposing of School Property (cont.) • Like-kind exchange option (IRC 1031) • Place proceeds in an escrow account for future purchase of property • Purchase an income generating property

37. Applicable Legal Provisions • Education Code 17387 – Legislative intent for community involvement before decisions are made about school closure or the use of surplus space • Education Code 17388 – appointment of a District Advisory Committee (DAC) or 7/11 Committee to advise Governing Board on use of surplus property

38. Applicable Legal Provisions • Education Code 17389 – defines the required composition of a DAC • Government Code 65560 – land zoned as “open space” must be reserved for park and recreation purposes thus limiting market value • California Code of Regulations, Title 5, sections 90-101 – defines district responsibility regarding racial segregation among its schools

39. Applicable Legal Provisions • California Environmental Quality Act (CEQA) – statute that requires state and local agencies to identify significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible. • Increase in enrollment of more than 25% or the addition of 10 more classrooms, a more in depth CEQA review may be conducted • This review is specialized, thus consult with an attorney to determine applicability

40. GASB Statement No. 42 • Determining applicability • Value on books • Recently modernized/built site • Old or no value • Not applicable • Future building/site use • Don’t obsolete

41. District Examples • Leases a closed elementary school to the High School District for its Community day school • Long Lease to Commercial Business • Relocating the District Office to a school site to be able to lease/rent DO site

42. Discussion • What has your District done with its closed facilities?

43. Questions?