The Coronado Unified School District board of trustees approved a multimillion-dollar loan expected to help the district comply with a San Diego County Office of Education directive to maintain a positive fund balance that meets the state’s 3% reserve requirement through 2027.
During the first week of school in August, the board unanimously approved a lease-purchase financing agreement capped at $3.4 million.
Deputy Superintendent Donnie Salamanca said the lease-purchase financing is a mechanism for school districts to take out a loan. This loan will help CUSD close its budget deficit to ensure fiscal solvency until it reaches Basic Aid, while maintaining programs for students and reducing the need for painful staffing reductions, he said.
“The staffing reductions that we anticipate in the next several years would be in alignment with enrollment and not in response to the need for budget reductions,” added Salamanca.
This decision comes as CUSD works toward becoming a Basic Aid school district, to become funded through property taxes, and follows a letter from the county office specifying the need to identify budget solutions for upcoming years.
In June, the district had $300,000 of approximately $1.7 million needed in the 2026-27 reserves. That month, the board approved a resolution committing to reduce expenditures or add financing sources to cover the shortfall in order to maintain a 3% reserve required by the county.
“Subsequent to that we’re providing this as a potential viable option,” Salamanca told the board on Aug. 21. “We’re borrowing money in order to make ends meet and reduce the need to identify further reductions.”
According to Salamanca, the options keep the district solvent until Basic Aid, scheduled for 2027-28.
The loan amount totals approximately $3 million in financing options — a taxable $1.01 million loan and tax-exempt $2.10 million loan.
Salamanca presented the board with payment options for the financing as early as September of 2027 and recommended paying off the loans at the earliest possible date to avoid incurring unnecessary interest costs.
“The financing has a 15-year term and can be prepaid earlier at the District’s option,” says the report submitted to the board. “It is expected to generate General Fund savings of over $700,000 in Fiscal Year 2025-26 and Fiscal Year 2026-27 combined.”
Salamanca said the 2025-26 First Interim Report in December will present the district’s budget solutions, including these financing options, as requested in the county’s letter.
“By taking out the $2 million we’re providing a little bit of an additional buffer that would have otherwise impacted the general fund which would have had a negative impact on programs,” said Salamanca about the greater loan.
Low enrollment
Amid a budget shortfall, CUSD continues to struggle with declining student enrollment.
The district had 2,778 students enrolled on the first day of school last year.
As of Aug. 18, the first day of the 2025-26 school year, CUSD had 2,691 students enrolled.
This shows a decrease of 87 students enrolled from the last year, Salamanca told the board, which he said impacts the student-teacher ratio across classroom averages in elementary classrooms.
Duties reassigned
The district’s Director of Special Programs and Director of Adult Education resigned in July.
Earlier this year Superintendent Karl Mueller said the district is focused on reducing the number of employees and is not looking to fill positions following staff resigning or retiring from CUSD.
“After much reflection, CUSD staff made the difficult decision not to hire replacements for these integral members of the district’s management and support team,” says a report Salamanca presented to the board. “Instead, the duties have been redistributed to other team members…”
The report shows 21 director duties were reassigned to seven district departments and staff.
In other matters
- Mueller reported on safety initiatives undertaken over the summer including a new gate installed at Coronado Middle School and the purchase of two-way radio equipment expected to arrive in September. Salamanca said the gate and radios were funded by a grant, U.S. Department of Justice’s School Violence Prevention Program, awarded in 2024.
- The board welcomed Coronado High senior Haissam Kouli, the new student board member.
The next regular board meeting is set for 4 p.m. on Thursday, Sept. 11 at the district office.
