By Andreas Chialtas, Partner
and Lindsay Thorson, Senior Associate
Cerritos Office
Mounting financial pressure experienced by most K-12 school districts and community college districts throughout California necessitates more efficient use of district real property. Improved efficiency requires more than just knowing the law. The beneficial use and disposition of district property can take many forms such as selling property, generating lease income, decreasing the cost of operations and maintenance through shared use with other public agencies, or any combination of these. Given the myriad of options, it is clear that there is no “one-size-fits-all” approach. With this reality in mind, we recommend that district board members and trustees first get back to basics before undertaking the formal steps in any transaction, and follow some best practice approaches related to planning and community involvement. This will result in an outcome that can withstand public scrutiny while simultaneously providing financial relief.
So where to begin? First, districts should slow down…and plan. Tasked with momentous goals of educating students and improving student performance in these tough economic times, it is understandable that district decision-makers want to act quickly. Nevertheless, district board members and trustees should not rush to take action in this current market without sound planning. For example, in order to prevent sale or lease of properties at "fire sale" prices and to help districts maximize their options, we encourage good asset management and planning, an appropriate level of community outreach, and communication of districts’ desired goals.
It is essential to have some consensus and clear direction before embarking on the chosen course of action. This may seem simple, but it should not be underestimated or ignored. Moving forward without fully vetting options and gaining consensus often results in missed opportunities and unnecessary conflict. Districts should first take a global look at the need for its real estate over the long term and, based on policy goals, demographic analysis, and economic analysis, determine which properties can generate revenues, and how all other district properties may best be utilized. With its inventory in mind, districts may then engage in planning for use or disposition of these properties and analyze the pros and cons of each approach with confidence.
In some circumstances, community advisory committees are statutorily mandated; however, community involvement and education is advisable even when not required. We recommend districts reach out to the community to ensure constituents are aware of the who, what, when, where and why of the district’s plan for its properties. Additionally the community should be given a chance to provide input to the district. Giving the community a sense of ownership in the decision-making process can make a world of difference.
In short, while K-12 school districts and community college districts have innumerable options available regarding the use and disposition of their assets, planning and articulating such actions and goals can lead to better results and eliminate unintended consequences. Answering core questions at the outset of a transaction, and following formalized information gathering, planning and outreach steps will help ensure our districts can maximize revenues and savings in these difficult financial times, and that our district board members and trustees are seen as good stewards of the public dollar.
