The McCurdy School Board March 18 raised tuition and eliminated some student discounts for next school year amid continuing uncertainty about how to overcome a growing budget shortfall.

    The Board has also approved putting up for sale an estimated $1 million worth of property on the western edge of campus, which Board member Ricardo Cordova said could make the school solvent for at least two more school years.

    But figures from school officials, and a still-recovering real estate market, cast doubt on how effective any of those measures will be in saving the 98-year-old Methodist school from financial collapse.

    At the beginning of this month, the school had cash reserves of $765,000 and planned to receive two $24,000 payments from the United Methodist Church by the end of the current fiscal year, Superintendent Deborah Anderson said. The school spends a “bare-bones” $225,000 a month on operating expenses, Business Manager John Lamenzo said.

    Extrapolating those figures through the rest of the school’s fiscal year 2010, which ends July 31, leaves a $312,000 shortfall, Anderson said. She said the school brought in $2.1 million this fiscal year compared with $3.1 million in expenses, leaving what would have been a $1 million deficit if the school had not maxed-out its lines of credit with Valley National Bank and the United Methodist Church.    

    Anderson said if those profit-loss figures stay the same, the school will face another $1 million deficit next fiscal year, this time without the possibility of closing the gap with any more loans from the church or the bank.

    To help make up that deficit, Board member Manuel Valdez proposed a tuition increase for next school year — $500 across the board, except for preschool which was reset to match the kindergarten tuition of $3,750. That increase should bring in an additional $150,000 to $180,000 next fiscal year, Anderson said. The Board also eliminated multiple-student discounts and discounts given for volunteer service work at the school, which could save up to $40,000 next school year, Anderson said.

    Combined those two changes will increase revenue by $190,000 to $220,000, just a fraction of the $1 million it would need to break even next school year.

    Among the several questions parents and teachers raised at the March 18 meeting was how a tuition increase would affect enrollment.

    Former superintendent Daniel Garcia implemented a $1,000-per-student tuition decrease at the end of last school year without Board approval, Valdez said. The Board eventually decided to go along with Garcia’s decrease hoping it would help grow enrollment in a poor economy, he said.

    McCurdy lost 42 students despite the decrease (see box).

    “I think we need to find out how many kids are coming back next year before the tuition hike goes into effect,” eighth-grade teacher Becky Smith said. “I’ve already heard kids say they are definitely not coming back next year.”

    Anderson and the Board are relying on a similarly unpredictable proposition to make up the rest of the deficit. Anderson hired Sultemeier Properties last month to sell off 10 school-owned properties just west of the main campus. Most of the properties contain homes that are currently rented out, including one to McCurdy Elementary and Middle School Principal Pam Miller.

    “That property is worth significantly more than $1 million,” Valdez said. “We don’t want to have a fire sale, but there will be some willing buyers. We have some deadlines to hit, so we’ll have some flexible pricing.”

    While Valdez and Anderson are confident they’ll sell enough property to make up the current fiscal year’s deficit and open McCurdy for the 2010-11 school year, Yucca Realty owner Don Milligan said the real estate market has yet to fully recover from a meltdown that coincided with the recession.

    “I think the prices are starting to hold and seem to be a little more stable than they’ve been during the last year, and we keep hearing about sales picking up,” Milligan said. “But I think it’s pretty modest whatever increase is occurring, so I don’t suppose we're through the economic turmoil as of yet.”

    Milligan said though several of McCurdy’s properties are “attractive,” liquidating them in time to start paying for school in August could prove difficult.

    Yet, even if the school sells all of the property and sustains its enrollment with the higher tuition, Cordova said those measures are only short-term fixes to the school’s perennial problem of operating in the red.

    “At that point, the clock starts ticking,” Cordova said. “That will buy us about two more years.”

    Anderson said it would be nearly impossible to trim much from the school’s $3.1 million operating budget, leaving the brunt of the burden on increasing its $2.1 million annual revenue.

    To achieve that end, Anderson pointed to Development Director Brian Bone, who has been traveling to Methodist churches around the country to drum up donations. And Lamenzo has started a campaign aimed at raising $1 million in new donations this calendar year. So far, about a quarter of the way through 2010, he has raised $120,000, or about 12 percent, of that $1 million goal.

    Without increasing revenue by $1 million a year, or finding a way to trim its expenses, the school could sell all of its excess property and eventually end up in the red again, a concern parent Chris Valdez shared at the meeting.

    “My vision is for McCurdy to be self-sustainable and not rely on donations to stay open,” Valdez said.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.