Report slams San Mateo school district board 

Deep fiscal mismanagement at the San Mateo Union High School District will affect its budget for decades, and the outgoing superintendent and the district board are to blame, according to a report that examined the district’s shaky finances.

The report, released Monday by a county civil grand jury, said the "district is in trouble" for deficit-spending four of the last five years and for not reacting quickly to dwindling revenue from local property taxes.

"Failing to maintain adequate reserves, reacting slowly to property tax declines and poor control of construction costs have led to the current crises for the [district]," the report said.

The district, which is made up of seven schools with about 8,500 students covering San Bruno down to San Mateo, is facing about $73 million of debt directly from loans it took out to pay for construction cost overruns from Measure D, a $137 million bond measure passed in 2000. The debt will cost the district at least $164 million and will require the district to dip into its general fund meant for classrooms through 2044, the report said.

Superintendent Sam Johnson has partly blamed fiscal problems on the sluggish post-9/11 economy. The district’s business superintendent Liz McManus, whowas hired last year, has indicated that property tax revenues will rebound 4.5 percent this year and that the district should be able to meet its mandatory 3 percent budgetary reserve.

In a statement released Monday, Johnson said the grand jury report omitted certain information in its conclusions.

"On initial review, it appears that the report does not fully communicate some of the information that was provided to the grand jury, which the district believes addressed" some of the grand jury’s concerns, he said. "The district looks forward to defining and clarifying for the public in the very near future any findings in the report with which the district takes exception."

Board trustee Diane Vranes agreed that the report overlooked some information provided by the district. She said revenue projections have been off base, and in 2005, revenue shortfall from property taxes was $1.6 million.

"That could make anyone reel," she said. "We also took a big hit in 2002 and 2003."

Last week, Johnson announced his retirement after three years as superintendent and the board has begun its search for a replacement. Also last week, some district board members said publicly they’d like to closely revisit the finances of Measure M — the $298 million construction bond passed last year — to search for any possible excessive charges.

The grand jury, which began its investigation last year, recommended the district acquire outside help for its fiscal issues, create a "realistic reserve policy" and incorporate two citizen oversight committees — one to monitor money from Measure M and another to monitor annual budgets.

Yearly shortfalls

Annual property tax revenue shortfall for SMUHSD

2000-01 $63,698

2001-02 $94,924

2002-03 $811,069

2003-04 $403,438

2004-05 $198,877

2005-06 $1,643,848

2006-07 $222,541

bfoley@examiner.com

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