MOORLACH UPDATE — Riverside County School Districts — October 31, 2018

Happy Halloween!

Allow me to provide you with more scary data. This year I’ve already given you the following frightening financial details for Orange County:

* MOORLACH UPDATE — Facing Fiscal Realities — October 30, 2018

* MOORLACH UPDATE — Trick or Treat? — October 26, 2018

* MOORLACH UPDATE — Get Mad, Get Motivated — October 19, 2018

* MOORLACH UPDATE — LAUSD vs. OC School Districts — September 18, 2018

* MOORLACH UPDATE — Measure It, Improve It — March 14, 2018

* MOORLACH UPDATE — City CAFR Rankings, Vol. 10 — February 27, 2018

Now I’m providing the results of our Unrestricted Net Positions (UNP) research just for the 23 school districts in the county of Riverside. My submission is provided below in the Inland Valley Daily Bulletin and the Redlands Daily Facts.

OPINION

Riverside County school districts are deep in red

By JOHN MOORLACH

https://www.redlandsdailyfacts.com/2018/10/30/riverside-county-school-districts-are-deep-in-red/

https://www.dailybulletin.com/2018/10/30/riverside-county-school-districts-are-deep-in-red/

Of Riverside County’s 23 public school districts, just one, tiny Desert Center Unified, boasts a positive balance sheet. Unfortunately, the other school districts have balance sheets that have dipped into the red.

The scoring comes as part of my new report, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities.” It reviews the financial soundness of all 944 California public school districts. I performed a similar review of California’s 482 cities back in March.

The rankings derive from each district’s latest Comprehensive Annual Financial Report, which you can find on their respective websites. In each CAFR, look for the “Basic Financial Statements,” starting with the page titled “Statement of Net Position.” Look at the top row for “Government Activities.” Then look down the column to where it says, first “Net Position,” then “Unrestricted.” That’s the number you want: the Unrestricted Net Position, or UNP.

The number will either be positive or, with parentheses around it, negative.

I also divide the UNP by the district’s population to get a per-capita UNP. If negative, that’s the amount each person in the district is in hock for, whether or not your children attend school. Citizens should be concerned about the trajectory of these negative balances, which are commonly attributed to unfunded pension liabilities. As school board members are auditioning for their jobs, they need to be held accountable for dealing with these liabilities.

If the negative number runs too high too long, it will mean cuts in teachers, equipment, band and sports, and ultimately calls for tax increases. In the worst cases, takeover by the state, even bankruptcy, is not out of the question.

Desert Center Unified’s positive number clocks at $3,055 per capita. For comparison, it ranks 38th of California’s 944 school districts, an exemplary performance. Yet I must point out it teaches just 23 students with a staff of two.

It’s all negative after that around here, with the second and third “best” being Perris Union High at ($528) and Perris Elementary at ($556). At least they were in the top half of California districts, although that’s not saying much.

The worst are Coachella Valley Unified at ($1,946) and Romoland Elementary at ($1,864), ranking 904th and 903rd of the state’s 944 districts. They languish in the bottom tenth of districts.

Among the largest districts by population, Corona-Norco Unified ranks 820th at ($1,359), Riverside Unified 727th at ($1,089) and Moreno Valley Unified 745th at ($1,118). In terms of the raw totals of how much these districts are underwater, the numbers are: ($380 million) for Corona-Norco, ($291 million) for Riverside and ($204 million) for Moreno Valley. That’s a combined deficit of almost $1 billion for just three districts.

Overall, just five Riverside County districts ranked in the top half of California’s districts, but 18 ranked in the bottom half, a truly alarming performance.

Here are the per capita UNPs for all of Riverside County’s school districts:

  1. Desert Center Unified                      $3,055
  2. Perris Union High                             ($528)
  3. Perris Union Elementary                ($556)
  4. Beaumont Unified                            ($590)
  5. Menifee Union Elementary            ($695)
  6. Palm Springs Unified                       ($760)
  7. Palo Verde Unified                           ($773)
  8. Temecula Valley Unified                 ($857)
  9. Banning Unified                               ($916)
  10. Hemet Unified                                   ($922)
  11. Desert Sands Unified                       ($947)
  12. Lake Elsinore Unified                   ($1,103)
  13. Riverside Unified                           ($1,089)
  14. Moreno Valley Unified                  ($1,118)
  15. San Jacinto Unified                        ($1,150)
  16. Val Verde Unified                           ($1,205)
  17. Nuview Union                                 ($1,265)
  18. Corona-Norco Unified                   ($1,359)
  19. Murrieta Valley Unified                ($1,380)
  20. Jurupa Unified                                ($1,631)
  21. Alvord Unified                                ($1,642)
  22. Romoland Elementary                  ($1,864)
  23. Coachella Valley Unified               ($1,946)

The tallies are part of my effort to track the per capita UNPs of California’s various government balance sheets. In addition to the city balance sheets mentioned earlier, I have tracked counties, community colleges, California State University and the University of California as well as all 50 U.S. states.

You can follow all these analyses on my legislative website. The reports will be regularly updated.

Next year is going to be especially revealing — and distressing — as the Governmental Accounting Standards Board for the first time will require balance sheets to include unfunded retiree medical liabilities, which will show even more city and school districts in critical condition.

And when the next economic recession hits, for even those modestly distressed, it’s going to be one big financial train wreck.

Let’s hope our elected school board members and their administrative staffs get in front of this serious cash management squeeze on their horizon. It’s time to be proactive, as taxpayers are not very forgiving with those who are reactive. Especially with supposed leaders who only have one solution: raise taxes.

John M.W. Moorlach, R-Costa Mesa, represents the 37th District in the California Senate

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