‘Checking Under The Hood’: Orange County Cities’ and School Districts’ Finances

Sonora Elementary School in Costa Mesa, Calif., on Dec. 1, 2020. John Fredricks/The Epoch Times

Commentary

In his 1992 run for United States President, third-party candidate Ross Perot made famous the phrase “to look under the hood.” We’ve done just that by looking at the per capita rankings of Orange County’s cities and school districts by taking their unrestricted net positions and dividing them by the populations they serve, as of June 30, 2020, the most recent date where all of their audited financial statements were available.

If you are a homeowner in Orange County, you need to be concerned about the fiscal wellbeing of your city, your elementary, middle, and high school district(s) and your community college district. You have the responsibility of voting for your city council and school board trustees.

With the hood open, let’s see what these combined layers of government tell us from the data available.

Many cities have elementary school districts, as well as a separate district providing middle and high schools. Some cities have more than one school district. Some school districts serve more than one city. For instance, Capistrano Unified serves seven cities and unincorporated areas. This makes allocating the per capita numbers a little difficult. Although it will disadvantage the city of Anaheim, let’s use the available data from our previous two efforts.

The table below provides each city’s population and per capita. It provides the cumulative per capitas for the school districts and CCDs. Where there is more than one school district it is noted. The seven school districts within or overlapping the city of Anaheim are Savanna Elementary $(565), Centralia Elementary $(708), Anaheim Union High $(832), Orange Unified $(1,121), Magnolia Elementary $(1,262), Anaheim Elementary $(1,271), and Placentia-Yorba Linda Unified $(1,764).

Not all of Anaheim’s residents are in every one of the seven districts, so residents can factor out those that you are not in. If you are unsure, your real property tax bill from the Orange County Tax Collector will be of assistance. It also includes how much you pay each year in additional property taxes to retire your school districts’ building improvement bonds.

Here are some quick observations:

1. Laguna Beach tops the chart, as the city and school district are near the top of both charts.
2. Laguna Woods does not have any elementary, middle, or high schools, as the minimum age to live there is 55. Nineteen other cities belong to one “unified” school district that serves one or more cities, like Newport-Mesa.
3. Fourteen cities have more than one school district for their school age residents, those with only 2 most likely represents a separate elementary district and separate high school district.
4. Nine cities have more than two school districts either because of their size or because many districts cover portions of several cities.
5. Anaheim has seven different school districts serving their student population.
6. Eleven school districts serve students in three or more cities.
7. The eight bottom cities represent half (1,494,693) of the county’s residents.
8. This year’s top-rated city, Cypress, dropped to 13th place, the largest drop of the 34 cities, when school district finances for Cypress Elementary $(1,118), Savanna Elementary $(565) and Anaheim Union High $(832) are factored in.
9. Nine of the cities had ranking changes of 6 positions or more when combined with the schools, three positively and six negatively.
10. Brea moved up thirteen places in the overall rankings, the highest upward movement of the cities.

What we have not looked at is the county’s three community college districts (CCDs). Orange County’s 34 cities and unincorporated areas are within these three districts. The three cities of Garden Grove, Seal Beach and Stanton are in both the Coast and North Orange County CCD, as the boundaries split them in two.

Coast CCD has an unrestricted net deficit of $280,226,664 spread over a population of 1,023,299 for a per capita of $(274). Using the same two metrics, North Orange County CCD comes in at $(153) and South Orange County CCD, one of the best managed in California, is at $179.

I would venture to guess that the fiscal leadership from decades past, provided by the influential Tom Fuentes, a former Orange County Republican Party Chair and SOCCCD Trustee, would account for its positive per capita. It can and must be done and it is good to see that Orange County has models to follow.

This study is designed to cover the surface of the topic. Opening the hood is one thing. One can also drill down further by zip code or by tax rate areas for an even more detailed analysis. But the data can be a temperature gauge for residents to see if they need to spend more time in reviewing the resumes and policy positions of its city council and school board members.

After 132 years as a county, it may also be an opportunity to review the boundaries of the school districts to determine the best manner for serving various constituencies and holding school boards accountable.

The reason for opening the hood is to stimulate and encourage all cities and school districts to construct a ten-year strategic financial plan to assist and guide them in moving closer to a positive position when it is measured by the potential liability assigned to each resident. It is critical for all tax dependent municipalities to be addressing balance sheets that are upside down. And it is even more crucial for voters to check on occasion to see if the fluids are low, as they will be requested through a future sales or parcel tax to improve the levels.