By:JOSEPH KELLARD
Superintendent Dr. Herb Brown kicked off the first of three budget workshops the district will hold by highlighting areas of greatest increase. Salaries are up by $2.7 million, health insurance by $138,523, contributions to employee retirement by $35,694, and costs for special-education transportation, tuitions and utilities are also up several thousand dollars.
The proposed budget works out to an 8.6 percent -- or $7.9 million -- increase from last year's final figure.
Brown mainly discussed the costs of the $31 million bond issue passed last January that will fund a district-wide capital-improvement project, $2.5 million of which will be added to the budget this year.
"The money was borrowed last summer at a very favorable rate of under 4 percent," Brown explained, "locking in that favorable rate for 20 years for Oceanside taxpayers. And the money has to be paid back, principal and interest, beginning next year."
Prior to last year's vote on the bond, Oceanside included $1.6 to $2.1 million in its overall budgets for capital projects. The district would usually be reimbursed a year later, at the rate of 41 cents on the dollar in matching state funds, or approximately $820,000. In May 2002, however, the state passed a regulation requiring that the $820,000 be paid back over 20 years, the state's projected life-span of a capital project. The district argued that it was financially unsound to continue to budget the $1.6 to $2.1 million each year when it would receive the 41 percent reimbursement over 20 years.
Since interest rates on school-related bonds were then relatively low, between 3.5 and 4 percent, the district said that if the bond passed, the yearly increase for the average homeowner in Oceanside would be $79; if voted down, and if the district continued to do capital projects by paying as it went $1.6 to $2.1 million per year, the tax increase would be $99. The savings to taxpayers would be between $600,000 and $800,000 over 20 years, Brown estimated.
"When we put the $2.5 million in the budget -- and it will stay there over a number of years to pay back the bond -- we'll get back about 40 percent, which is about $1 million over $2.5 million," Brown said at last week's budget workshop. "This means it will cost the Oceanside taxpayer a difference of about $1.5 million a year, and they'll be getting $31 million of construction in the district completed over the next three years."
Brown reminded residents that if the district financed capital projects as it had prior to the bond vote, the next cost to the taxpayer would still be $2 million, but there would be no aid.
"So you can do the math as to how many years it would take to do $31 million of construction if you did it at $2 million a year," Brown said. "[With the bond] you get it done a lot sooner and you get it done for less money. But the downside is that you have put the money in the budget initially, and this is the year we have to do that."
School Board President Sue Graham cited the bond issue and the recently restructured teacher's salary contract, locked in at a yearly 4 percent increase over the next two years, as examples of the board's knowing definitely the figures for certain items in the budget.
"I think the biggest problem we as a board face is all the increases that we have no control over," Graham told the Herald. "The state does not provide our school district with ample aid to meet these increases. And then we have unfunded mandates that the state now places upon us to carry out. So if you add all that into the overall cost, there's no way we cannot have an increase."
Graham added that the board wants to reduce that 8.69 percent increase, "and we will do everything in our power to reduce it without jeopardizing our educational system."
The district will discuss the proposed budget at two more workshops. The second workshop will be held Feb. 23 at 7:30 p.m. in the Board Room at the Administration Building on Merle Avenue; the third will be held on March 1 at 7:30 p.m. at the same location.
