DJUSD Answers Critical Questions about Out-of-District Transfers and Finances

Photo by MChe Lee on Unsplash

By David M. Greenwald
Executive Editor

Davis, CA – One of the big misconceptions is the role of Interdistrict (or out-of-district) Transfers.  The school district this week put out an FAQ on the parcel tax and extensively addressed some of the concerns and questions raised by folks in the community.

As DJUSD points out, “DJUSD is required to accept Interdistrict Transfers for students who meet the Resident by Employment standard in Ed. Code 48204, if space is available in the requested grade, school, or program.”

Further, “This code states that students whose parents work in Davis for at least 10 hours per week are considered residents by employment and therefore may be accepted into the school district, if space is available.”

Under this Education Code, “they can only be denied admittance into the district under certain circumstances, including if we are at capacity at the requested school site, grade level or program.”

In addition, “once a student is accepted as a resident by employment, the IDT cannot be revoked in future years, even if overcrowding does occur.”

Of our current interdistrict transfer requests, 63% are by reason of employment.

The District explains, “Of the IDTs without an employment connection, 79% are students who have already been in the district—i.e. a continuing non-resident student in this category or a student who recently moved out of the school district boundary. Usually it is the case where a student started their education by living in Davis and then for a variety of reasons, their families moved outside the district.  Since the student is our current student, we honor their ability to remain in the district from year to year.”

The following questions and answers come directly from the FAQ…

While numbers may change throughout the year because of enrollment, here is how they break down:

  • Of the total 1046 non-resident students, about 92% were either: 1)  a “resident by employment transfer” —i.e., legally required by California Ed Code to be accepted by DJUSD, if space is available;  2) an IDT not connected to employment but who is a continuing DJUSD student from the previous year; or 3) a student who was a Davis resident, but who recently moved out of boundary and is a new IDT, not connected by employment.
  • 172 students this year (16% of total non-resident students) were brand new students to DJUSD and were approved as IDTs (both by employment and without employment connection); these numbers are spread out over 13 grades at 15 school sites.

Are the number of Non-Resident Students Increasing in Davis?

The number of non-resident students or Interdistrict Transfer students (IDTs) for DJUSD has increased over time. This is largely due to the number of current students with families who have chosen to purchase homes in neighboring communities, but who want their children to remain part of our school community.  DJUSD is fortunate to have a wait list with IDT applicants who can fill open seats in our schools.

In 2023, the number of non-resident students in DJUSD is 1,046 with only 172 brand new IDTs, of which 90 of those (52%) are by reason of employment and legally required to be accepted if space is available.

Enrolling non-resident students is more than a legal obligation. Non-resident students help our district finances. A useful analogy is that we are running classes just like an airline is running a flight. The cost of a class is set and the best way to be cost efficient is to fill seats.

If the student population is declining, why doesn’t DJUSD close schools?

When thinking about our District’s funding model, it is first important to note that we receive most of our revenue under the equity-based Local Control Funding Formula (LCFF) that exists for California public schools. DJUSD, like all districts, receives its allocation based on two factors: Enrollment and Attendance. When compared to districts in the region and across the state, DJUSD generally performs above average in attendance, but it has lower numbers of unduplicated students, defined as English Learners, Low Income students, Homeless Students or Foster Youth. As a result, DJUSD is one of the lowest-funded school Districts in the state.
Below are two graphs that show the LCFF funding percentage of the state average and the actual per pupil allocation for unified school districts in our region, of comparable size for the 2021-22 school year.

You will note that DJUSD is funded at 80% of the state average unified district (not 80% of the highest funded district, but 80% of the average funded district in the state).  Currently, there are only 37 unified districts in California (out of more than 1,000) funded less than DJUSD through the LCFF.

Chart of regional schools

Chart of regional schools

In 2015-16, just two years into the LCFF implementation, the DJUSD total funding per pupil from all revenue sources (including parcel taxes) was 95% of the state average for unified districts. This percentage has continued to decrease in proportion to the state average and was 93% in 2021-22 for all funding sources.

DJUSD operates with economies of scale. Each open seat in a classroom is already supported by a teacher, principal and various support staff.  If we are able to provide a seat to a qualified inter-district transfer student, we will receive $10,000 more dollars in the General Fund. This phenomenon is like filling the seats on a plane which is already set to depart. If you divide the total non-resident students by 14 grades (TK-12), there are approximately 71 students in any grade (give or take), which means at an elementary school there are three students in any given classroom. If you remove 9-10 students from a grade level, the class will still run, just less efficiently.

It is true that the number of non-resident students has grown over the past two decades as Davis (along with districts across the state) has experienced declining enrollment. According to a 2020 California Schools Services analysis (image below), as Declining Enrollment reduces a school district’s revenue, only 36% of the costs associated with that revenue can be reduced and still meet our mandates. This reality increases pressure on the budget and likely leads to cuts in programs for the remaining students to balance the budget.

Impact of declining enrollment

To illustrate this in another way,  here is a simplified explanation:
Currently, DJUSD has approximately 1,000 non-resident students enrolled, many who have been with the district for years. For the sake of round numbers, let’s assume that 1,000 students receive $10,000 each through state funding. (Remember, the state and federal government do not differentiate whether a student lives within district boundaries.)

If they were to be disenrolled at this time, DJUSD would lose $10 million in state funding.  Using a 25:1 student to teacher ratio, 1,000 students would require about 40 teachers; if those teachers (average cost $80,000/FTE) were eliminated, that would be a savings of $3.2 million. If you could close one elementary school and eliminate the cost of one school principal and support staff, that would equate to close to $500,000. If you closed two elementary schools—that is one million dollars, which means you are still $5.8 million short of the $10 million you need to recuperate.  That $5 million+/- would need to be taken from the General Fund that would be (in this scenario) exclusively supporting resident students’ schools and programs. In addition, we would spend millions of dollars updating our remaining schools to house more students.

In sum, DJUSD enrollment has declined by nearly 300 students since 2017-18 (as outlined in the chart below), and we have continued to make related reductions in expenditures, of more than $3 million over the course of that period. If our overall enrollment continues to decline we will, like many districts throughout the state, make the requisite reductions over time.

District Enrollment Trend

Final misconception…

Why can’t we make non-resident student families pay the Davis parcel tax?
Levying a fee on non-resident students is not legally permissible under the California Constitution.

All students have a right to take part in educational activities at school without paying a fee, deposit or other charge. To learn more about the restrictions on school districts charging fees for public educational activities, visit the California Department of Education Fiscal Management Advisory at https://www.cde.ca.gov/re/lr/fm/fma2001.asp, which cites sections of Education Code, court cases and other legal references that govern this issue.

To Summarize

These are the key points of dispute:

1. The district MUST accept students from parents who work in the school district boundaries—i.e. DJUSD or UC Davis

2. Once a student is in the school district, they cannot be removed

3. Closing a school won’t solve the problems of declining enrollment

4. The school district cannot charge out-of-district students a fee for the parcel tax

Final point of note: many of the out-of-district transfers are actually students whose families have moved out of town and, therefore, the lack of housing in Davis is in part contributing to the problem as well as the fact that many families are living outside of town but working in town and sending their kids to DJUSD schools.

Another point that doesn’t seem to register—DJUSD BENEFITS from this.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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10 Comments

  1. Keith Y Echols

    I’m going to try to replicate the last school based comment I made a week or so ago that got no response.

    The school district and your posting is essentially like a store in a mall that is selling a product that doesn’t cover it’s expenses and then institutes an entrance fee at the doors of the mall itself…..so you pay regardless of weather or not you actually go into store and buy something.  Their other solution (to continue he mall store analogy) is to bring in more products to sell in which they lose even more money on?  I have kids in the school district so I’ll pay my $1000+ parcel taxes.  But if I didn’t have kids in the schools system, I’d be pretty annoyed.  The school district is like having an adult kid that dedicates their life to social or environmental causes but has to keep coming back to you and ask you for rent money.  You’re happy to help out but at some point your kid has to pay his own way.  As far as I know the school district hasn’t presented a plan for any way to right itself fiscally; I mean not even a partial plan.

    It’s pretty basic fiscal responsibility; find away to make enough to pay for your expenses.  You can do that be either increasing revenue or reducing expenses.  Since the district can’t change the LCCF, the district has to find more sources of revenue.  

    I’ve been advocating for years how there needs to be more community public housing. My belief is if developers/builders can make money off of real estate; why can’t the community?   Housing built by the city, housing built by the school district…etc…    Last I read the district was trying to figure out what to do with a 2 acre property in Central Davis not too far from the downtown.  They’ll probably just sell it and try to find a place where their distance learning students (I think) can sometimes meet.  What I would suggest is a mixed use property that has bottom floor commercial space for the school to use while having 32 units (16 per acre).  20 market rate units to generate revenue.  8 workforce housing (for 80%-120% median household income) reserved for teachers and district employees and 4 very low income affordable units.

    Davis schools (and many CA schools in general) are single story buildings that spread out onto a big land foot print.  Schools reduce their land footprint by replacing their structures with multi-storied buildings (which is the norm in much of the east and midwest).  With some of the left over land some district housing could be built for teachers and low income individuals.

    Knock down a school if overhead cost is a problem.  A school sits on about 10 acres?  So you could get about 80 units (8 units to the acre).  50 market rate units.  20 work force housing units (primarily for teachers) and 10 very low income affordable units.

    For immediate income; how about more aggressively marketing and renting out school faculties?  Just the other day I read on a local Davis online community posting that a parent was looking for a place to hold an indoor birthday party for about 70 people and all of the usual places in the city were already reserved.  The first thing I thought of were the new Multi Purpose Rooms (MPR) at Birch Lane, North Davis, Chavez (and maybe other schools).  I have to think there are some UCD graduation parties that might find those venues useful.   Or how about the occasional inexpensive wedding reception venue?  I know that Birch Lane’s MPR is rented out for one night a month by the 4-H club so it’s not out of the question.

    Bottom line, the district (and the city) needs to find supplemental sources of income.

      1. Keith Y Echols

        Why don’t they have the option for more sources of income?  You just say it like it’s edged on a stone tablet and placed in the Public Schools Ark of the Covenant.

        1. Keith Y Echols

          So if I read this correctly, basically my idea would have to be adjusted so that for the 2 acre property with 32 units.  the 20 market rate units would have to first be offered to district employees, then adjacent district employees and then city employees.  that’s all fine if they pay market rate for those units.  those units still generate revenue for the district.  the rest would be workforce housing reserved for teachers (and have to be offered to district employees, adjacent district employees…etc…) and low income affordable housing (also first offered to district employees).

        2. Keith Y Echols

          Also, facilities rentals are definitely okay for the district.  Lots of districts rent out facilities and as I said, I know 4-H rents out an MPR once a month.

        3. Keith Y Echols

          I’m no expert on school budgets.  But doesn’t the money to service and maintain the buildings come from the school’s general fund unless their are other sources available?  So if facilities rentals generates revenue to pay for the school facilities that would leave more money in the general fund for education.

          From best I can tell;

          Civic Center Act◦CA Education Code section 38130

          ◦Spirit of the law is to ensure that school facilities and fields are available to the public for acceptable use pursuant to LEA board policies and procedures.

          ◦Allows for school districts to reclaim reasonable costs associated with public use of school facilities.

          KEY FACTS-WHATSB1404 amends section 38134 of the Civic Center Act, expanding direct costs to include:

          ◦“the share of the costs for maintenance, repair, restoration, and refurbishment, proportional to the use of the school facilities or grounds”

          Previously only “Fair Rental” users could be charged these costs.

          Applies to non-classroom space and school grounds (athletic grounds and school facilities)

          Requires a special fund to be designated for funds collected for maintenance, repair, restoration, and refurbishment under the revised direct-cost fee structure.

          State Superintendent and Board of Education to develop regulations for determining direct costs.

          I think the interesting question is if “direct costs” can now also be applied to paying off the bonds the school district presumably used to build those Multi Purpose Rooms.  Or in the very least pay off the interest on those bonds.

          As for school district housing construction for teachers, I think you may find this info interesting.

        4. Richard McCann

          Keith

          You’re right that the schools can earn more from facility rentals et al, but the staffing costs for those rentals each up much of any extra revenue. (We speak from experience.) There’s lots of activities already using those facilities but I don’t think most people are ready to pay the full set of those fees.

          The school might be able to build teacher housing on site (south side of Harper is a potential example),  but the revenues gained won’t go a long ways towards the deficit. Further, if the District sells the property, that revenue can ONLY go towards paying down facility capital costs–none of it can go towards operating costs under state law. That teacher housing solution could help with recruiting teachers but it isn’t a real solution to the fiscal situation.

          That said, an analogy with a private store is not applicable at all. Schools educate students to the benefit of all other citizens, not just parents or those particular kids. Everyone who is retired is relying 100% on the communal productivity of the American economy to fund their investments and Social Security–that money is not parked away somewhere in Fort Knox. Further, Davis will never get its costs per student down to its ADA allocation for in-district students simply because the economies of scale won’t allow that (unless Davis is ready to reduce its education quality to that of the Dixon district where they considered cutting out 12th grade about a decade ago.)  The combination transfers and homeowners paying out a larger share of their house value created by the quality of the district (I’ve posted several studies several times showing that the value premium is at least $100,000) are the solution to the fiscal situation.

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