SL Coastal school closures, cuts loom with possible loss of $36.8 million in Diablo deal

San Luis Coastal Unified School District Superintendent Eric Prater described Wednesday as a “terrible, horrible, no good, very bad day.”

Unlike the titular character in the well-known children’s book, Prater’s bad day wasn’t because the store didn’t have his shoe size or he got gum in his hair.

Prater had just found out the school district is close to losing an important source of funding in the form of an $85 million settlement from PG&E to mitigate economic impacts to San Luis Obispo County once Diablo Canyon nuclear power plant closes in 2025.

“It’s really a punch in the stomach,” he said.

Administrative law judge Peter Allen ruled Wednesday that PG&E ratepayers should not be expected to pay for the proposed settlement package, worrying many local officials whose agencies had depended on the money to help support them through the plant’s closure.

Chief among those is the San Luis Coastal school district, which serves approximately 8,000 children in San Luis Obispo, Morro Bay, Avila, Edna Valley and Los Osos.

The district gets roughly $9.5 million in property taxes for the Avila Beach power plant, accounting for about 11 percent of its annual revenue. Under the settlement, the district expected to get about $36.8 million over the next nine years until the plant closes in 2025. It planned to put $2 million a year for the first five years into an endowment fund to help offset revenue losses after the plant closes.

Prater said he organized a special committee last year to examine the district’s options if it could not find an alternate source of money to replace Diablo Canyon’s property tax revenue. That committee is expected to release the results of its study at a board of trustees meeting Dec. 12.

Though he is not yet aware of the final results of the report, Prater said he expects it will include suggestions for how to cut costs or increase revenue, such as increasing class sizes, eliminating programs or even closing schools.

The district already eliminated $2 million in expenditures at the district office last year, he said, though more are likely on the way in light of Wednesday’s news.

“We’re going to have to sharpen our pencils again,” he said.

Prater said he hopes the community will come together going forward to offer feedback and find solutions to any budgetary restrictions so that students can continue to receive the best education possible.

“Even though it looks like we are not getting the money, we certainly have reserves, and this is an opportunity to roll up our sleeves and dig in,” he said. “The unfortunate thing is this is one of those things public schools have to endure, when funding dries up. We just have to come together and rally.”

This story was originally published November 9, 2017 at 9:44 AM with the headline "SL Coastal school closures, cuts loom with possible loss of $36.8 million in Diablo deal."