MUSD sees real estate revenue slip as budget cuts of $1.8 million loom

MARTINEZ, Calif. – The Martinez Unified School District (MUSD) has been aware of a looming financial shortfall for more than a year. Helen Rossi, assistant superintendent of administrative services said the district has already made significant spending cuts and agreed in March 2019 to further cuts totaling $1.8 million.

The problem is that the Contra Costa County Office of Education required MUSD and all of the districts in the county to approve and sign, a resolution that they will submit a list of specific items to be cut out of the budget by March 2020, in order to maintain a statewide requirement for three percent reserves.

Rossi said they have been struggling to curb costs and they have no control over increasing obligations related to special needs students. She mentioned recent district cuts to supplies, positions, and contracts.

This year the district made additional required ADA improvements that will not be an ongoing expense, but state lawmakers and agencies continue to add requirements that are not funded by the state. “We have no control over that,” Rossi said.

New MUSD Board President Jonathan Wright was particularly agitated by having to make a redundant commitment to the County, and also expressed his consternation at the recent City of Martinez approval of a cannabis store next to MUSD income property on Alhambra Avenue. He said it could be costing MUSD $96,000 a year in potential rental income.

MUSD owns the property at 3455 Alhambra Ave. (formerly Wendy’s) and is currently trying to lease it. Superintendent of Schools CJ Cammack explained the importance of that and a distinction between sources of money coming into the school district. If the district sells the undeveloped lot, those funds would be restricted for infrastructure uses, but income from leasing the restaurant is unrestricted and could go into the General Fund to cover operating expenses.

Wright, who also works for a union, said he would like to sell a lot near Briones, and look at all of the other real estate for opportunities to create income and while adding lower-cost family housing, primarily for MUSD employees.

His idea is to tear down the adult school and rebuild the whole property into a new multi-use development that would include a replacement school, income-producing units, and workforce housing, perhaps through a long-term lease agreement with a developer and help from government subsidies.

Former city councilmember AnaMarie Avila Farias was at the Dec. 9 meeting and said they should remember that the property is laced with all kinds of industrial pipelines, and the state will not allow a new school to be built over them. She also mentioned that government funds allocated for WorkForce Housing is in the form of a tax credit. How a tax credit could be used by the school district would have to be determined.

The Martinez Adult School is grandfathered in, but no new schools could be built in place of it, and a zoning change may also be required to put housing in that location.

New Board Vice President Kathi McLaughlin favors the idea of lower-income housing in that location because it is near services such as buses and the hospital, and increasing district income appeals to her, but she wants public input.

Outgoing Board president Diedre Siguenza mentioned the idea of partnering with a higher education institution to create a complimentary use and income. She also wants to look at all of the options and encourage public involvement in any decisions they may make. In January 2020, and when Trustee John Fuller will be there, the board will begin to examine what they can do with the properties to serve district goals as outlined in its mission statement, and to strengthen MUSD’s finances.

Some of the options that may be discussed are the possibility of developing workforce housing or a school on the so-called Briones lot, turning all of the Alhambra Ave. property into a development, continuing to rent the 3455 Alhambra Ave. restaurant, continuing to maintain the Adult School and improve one or two of the existing parking lots, simply sell the undeveloped lot, concentrate on economizing, or any combination of ideas.

Cammack said he and a board representative will be meeting with Martinez Adult School officials this week to get their perspective on potential changes that would affect their esteemed operation at the Alhambra Avenue site.

Although Wright is eager to get going on changes. He said, “I’m going to be pushing for this family housing.” However, the only compelling reason to do something is that the properties are obviously an underutilized, available resource at a time when MUSD needs to ramp up revenue.

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