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Students arrive to the new Richland Elementary School campus in San Marcos in January 2023. Richland is one of a few schools in the district not experiencing low capacity. Photo by Laura Place
Students arrive to the new Richland Elementary School campus in San Marcos in January 2023. Richland is one of a few schools in the district not experiencing low capacity. Photo by Laura Place
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San Marcos Unified continues grappling with low enrollment impacts

SAN MARCOS — Leaders in the San Marcos Unified School District are bracing for continued financial challenges in the coming years due to ongoing declining enrollment and will be relying on the current buildup of reserves to weather the storm. 

Like most districts in California, San Marcos Unified has seen a steady decline in students since the start of the COVID-19 pandemic, losing around 1,100 students in the 2020-21 school year and around 240 more in the past two years.

Because state funding is calculated based on average daily attendance, or ADA, using a three-year average, the loss of students year-over-year also results in a drastic loss of funding. 

Looking ahead, state funding for San Marcos Unified will be based on an ADA of around 18,300 students in 2024-25, which leaders say is a major drop from the figure of just over 19,000 students this year. Previously, the ADA was based on pre-pandemic numbers, which kept the average higher.  

“It costs more money to open our school doors next year even if we do everything exactly the same,” Erin Garcia, assistant superintendent of business services for San Marcos Unified, told the district board at their Dec. 14 meeting. “The main reason why this is happening is because our revenues are dropping and our expenditures continue to increase or stay steady as we move out.” 

Based on current trends, district leaders predict that San Marcos Unified will lose another 100 students in each of the next two school years. 

San Marcos Unified was previously considered at risk for financial insolvency due to structural deficit issues dating back to before the pandemic. However, with the help of grants and additional state funds during the COVID-19 pandemic, the district has received a positive budget certification in the past two years.

Despite this, a drop in state funding could still pose significant financial challenges. The governor’s office has yet to confirm whether districts across the state will experience a decreased cost-of-living adjustment, or COLA, in the upcoming two years.

While the state implemented a “healthy” COLA for this current year of around 8.2%, it is expected to be much lower in the next two years at 3.4% and 3.9%, although it could be closer to 1%.

Under the higher-COLA scenario, San Marcos Unified’s current unrestricted reserves of around 9% — or around $34 million as of the start of the year — would drop to 7% and then just above the required minimum of 3%, Garcia said. Under the 1% scenario, the district’s reserves would be in the red within three years. 

“The good news is, it’s not time to panic now. We have time to listen and understand how the state’s maybe going to address some of these things. Because we have reserves, we can play this out a little bit and have time to make good decisions,” said Garcia. 

As enrollment declines and brings down funding with it, district leaders have considered reductions in staffing as a way to cut costs in recent years.  

Employee salaries and benefits make up 81% of the district’s $323 million budget this year, with the remainder going toward services and operating costs, capital outlay, and books and supplies. 

Garcia explained last month that while the district is losing students throughout different schools and grade levels, staff cannot be reduced in the same way. “When you lose kids, you don’t lose them in nice packages of 25 kids in the same grade level. You kind of lose them everywhere, and you still need your full staff to support them, but you’re getting less funding to do it,” Garcia said.  

In the past, the district has taken the approach of issuing layoff notices early in the calendar year based on a conservative view of the state budget, only to rescind them once the actual budget is confirmed in June. 

In 2022, district leaders faced heavy criticism for issuing reduction-in-force notices to nearly 200 classified and certificated staff in an effort to “rightsize” due to declining enrollment. By the end of the year, only six layoffs actually ended up going through.

“School districts are required by the Education Code to issue March 15th layoff notices to any employee who may potentially be laid off. While many times districts are able to rescind the majority of these notices, they have to notice any potential staff of a possible layoff per the legal requirements of the March 15th layoff process,” said district spokesperson Amy Ventetuolo. “We are currently staffed at the appropriate levels for our district size and remain committed to the appropriate staffing levels for the number of students we are serving.”

Dale Pluciennik, president of the San Marcos Educators’ Association (SMEA), said while that process was very uncomfortable, the district has since made an effort to mend relationships with the teacher’s union. The union is going into its second year of a program called BRIDGE (Building Relationships, Increasing Dialogue, Growing Empathy), which involves regular conversations with district leaders. 

“I’m going to commend the district on that,” Pluciennik said. “I give us credit too… We were open to that, to try to regain labor peace.” 

Pluciennik said he believes that whenever possible, the district should rely on leaving positions vacant after retirement or other forms of attrition if they want to reduce staffing costs. 

Avoiding boundary changes, for now

Because declining enrollment has also led to uneven student populations at different schools, many sites are well below capacity while others, like Discovery Elementary and the recently-rebuilt Richland Elementary, are packed near full. 

In order to balance things out, San Marcos Unified leaders recently began the process of exploring school attendance boundary adjustments to take effect next school year with the help of a demographer. 

During this process, Garcia said they discovered that the district can avoid major boundary changes by instead moving Discovery Elementary’s special education LAB Program to San Elijo Elementary. 

This is anticipated to better serve students in the program and also alleviate immediate capacity concerns at Discovery by freeing up three classrooms, Garcia said. 

“We wanted to create a solution that had the least disruption to students and families,” she said. “We do not have to then move forward with a formal adjustment to our boundaries.”

The LAB (Language, Academic and Behavior) program is unique due to the level of specialized instruction and aid it offers for highly impacted students in the district, leaders said. There are currently 14 students enrolled, each with a one-on-one teaching aid.

Special Education Director Lori Cummins said San Elijo Elementary will offer a broader continuum of services for students than the program’s current home at Discovery. In addition, the location of classrooms will allow more opportunities for sensory breaks and easier access to the playground.

“It really is a huge benefit to the overall program to be able to move,” Cummins said. “I’m super excited about the opportunity, as have been the parents.”

While moving the program temporarily alleviates the need for attendance boundary changes, the district will have to take another look at larger-scale adjustments in 2025, Garcia said.

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