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"Casa Del Maestro"
3380 Lochinvar Ave, Santa Clara, California image available at http://tinyurl.com/htm8n2z |
On Monday, the Press Democrat’s editorial board described a
“brewing fiscal crisis” for Santa Rosa's schools, who must, as of their first
interim report for 2016-17, implement a ~2.2% budget cut going forward. SRCS is confronting flat enrollment coupled
with declining rates of return on pension funds, that will increase budget pressure over the next
four years. At least one board member’s suggesting a parcel tax in
response.
The editorial describes a problem familiar to Sonoma Valley Unified. SVUSD will implement a ~5% budget cut in a similar fashion to SRCS. While Santa Rosa must deal with a 1.6% reserve reduction due to an
accounting error, and Sonoma Valley's audits have consistently been clean, it is the
medium-term funding squeeze, with costs rising substantially faster than
revenues, and an increasing inability to make up the difference via one-time funds, that’s driving concerns. SRCS' potential pursuit of a parcel tax is one solution that certainly appears to be on the table, but it could cause voter confusion, if not outright fatigue, given Santa Rosa's successful $229 million bond in 2014. As Jenni Klose, president of the SRCS board noted in a letter to the editor today, "[SRCS], as with all California districts, is simply wrestling with how best to meet its increased pension obligation while continuing to fairly compensate staff[.]"
Sonoma Valley, grappling with the same situation, should investigate creating structural, long-term advantages to ensure our teachers and staff aren’t crushed between stagnant funding and our ever-rising cost of living. Housing remains the single largest expense for many teachers and staff, whether laterals or new graduates. Meanwhile, those further up the step-column need salaries that can pay for mid-life expenses, such as children starting college. Addressing one issue means more’s available to deal with the other. Much as our schools confronted rising power prices by getting on the supply side of the equation with solar panels, so too should our district pursue construction of high quality, reasonably priced teacher and staff housing, an advantage in recruiting and retention independent of state funding.
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2.83 acre Sonoma Valley Health Care District Property
432 W MacArthur, Sonoma, California
image available at http://tinyurl.com/joonh66 |
Serendipitously, Sonoma Valley’s health care district must make a decision regarding 2.83 acres on West MacArthur in the next 18 months. The land is four houses from Sassarini Elementary, and down the street from the SVHS/Adele/Prestwood campus. Due to some (very) recent changes in the law, SVUSD has
an opportunity to pursue a teacher housing project there, before the main front
of the financial storm hits our budget.
The model for such housing is Santa Clara Unified’s Casa Del Maestro. Commenced in 2002 on a previously closed middle school, the project utilized certificates of participation to fund construction of 70 units, subsequently
rented out to teachers and staff via a functionally integrated public charity. Construction
was done at market rates. No subsidy was involved. One bedroom apartments rent
for ~$900, and a large two bedroom for ~$1,450 (typically $2,390 for one in Santa Clara, $2,930 for two).
The cost advantage has four parts.
First, the District owns the land, and thus land costs are not included in the
cost of ownership or operations. Second, the capital structure allows for tax-exempt finance. Third, the land and construction are both property tax-exempt.
Finally, there is no profit -- rents are set at a level sufficient to pay back
costs of construction, financing, maintenance and operations, and to fund a
long-term reserve.
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Former Cal. State Sen. Mark Leno
image available at http://tinyurl.com/zbw9tum |
Despite such success, few K-12
housing projects have gone forward since, due to an aura of legal uncertainty. Is
restricting residency to teachers and staff consistent with California’s Unruh Civil Rights Act? Can land held in educational trust be used for teacher and
staff housing? Can Certificates of Participation be used to fund construction?
Can schools cooperate with other agencies on projects? Are there legislative
findings that the housing crisis is hitting teachers and staff?
We got our answer January 1. Mark
Leno’s SB 1413, known as the “Teacher Housing Act of 2016,” codified at Health & Safety Code § 53570 et seq., provides
the express authority to proceed. The law’s factual findings and statutory
language gives the same type of guidance for K-12 districts long available at
the junior college, CSU, and UC levels. Doubts regarding limiting the rentals to teachers and staff, about the use of lands held in educational trust, and
the availability of innovative financing and intergovernmental cooperation were
all addressed.
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| 2.83 acre Sonoma Valley Health Care District Property 432 W MacArthur, Sonoma, California image available at http://tinyurl.com/gtmavhq |
And this brings us back to the
2.83 acre parcel. Ideally located, the site is nearly identical in size to the Casa Del Maestro. It’s within walking distance of supermarkets and the Sonoma Square.
The neighborhood already has several master planned facilities (Village Green, Sonoma Hills, Pueblo Serena,
Moon Valley). Further, the school district has broad powers available to support the project, given the financial flexibility of the authority granted by Health & Safety Code § 53573.
What of the hospital, the current
owner? Hospital sites must be “multi-decade,” allowing new buildings to be
constructed as others pass from use, like a wave traversing the property over
decades. For now, the MacArthur parcel is surplus to requirements. But the two
districts could allow for a future exchange of land with fair compensation. The
Andrieux site could become housing and MacArthur a hospital, when contemporary structures reach their end of life.
There are any number of problems
that could interfere with teacher housing at this site (or another), but the rough contours are clear. Making sure teachers and staff can afford to
live in our community was the first item I discussed when walking Sonoma door
to door this past fall. There are few more effective proofs of the power of
small-town cooperation, especially in the face of discord we now
witness washing over our small valley.
Let’s get our government agencies talking about working together, and let's set an example, by having our health
care and school districts discuss how they might make this land continue to
serve the public interest for decades to come.