It all started with one mother. She wanted her son to play football at a bigger school than Coast Union High, where he was slated to head after finishing eighth grade in Cayucos.

So she petitioned for an inter-district transfer to Morro Bay High School, and other parents soon followed suit. But things were starting to change anyway.

At least that's how Vera Wallen remembers it, although she can't pinpoint the exact date when Cayucos parents started wanting their students to attend a different high school. She became the superintendent of Cayucos Elementary School District in 1988 and eventually ran Coast Union School District and Cambria Elementary School District as well, heading up all three until 1997.

"There were people who had a hissy fit because the superintendent of Cayucos became the superintendent of Coast and Cambria, because they were looking the other way," she said. "It was rumbling."

By "the other way," she means that some Cayucos parents wanted their kids to attend high school in Morro Bay, 3 miles away, rather than Coast Union, 13 miles away. But Cayucos kids have headed to Cambria for high school since the 1800s, according to Wallen, and Morro Bay is part of San Luis Coastal Unified School District—which doesn't benefit monetarily from accepting inter-district transfers from Cayucos students.

Cayucos, Coast, and San Luis Coastal are all considered to be "basic aid districts." The property values in each of the district's boundaries are high enough that revenue from property taxes more than meets what the state would allocate them per student. Therefore, when a student transfers from Coast to San Luis, money doesn't follow as it would in state-funded districts.

The rumbling only intensified in the ensuing years, resulting in several unsuccessful attempts to negotiate something satisfactory for all the parties involved. Recently, the Cayucos Elementary School District's board renewed the push for a solution to the issues dividing the community it serves.

Some parents want to send their kids to Coast while others prefer Morro Bay. Although transferring to the other district is something that happens now, it might not be something that can happen in the future due to the impending shutdown of Diablo Canyon Nuclear Power Plant, which will severely reduce San Luis Coastal's budget.

"This is a very complicated issue that has a lot to do with parents and what they want to do with their kids," Wallen said. "It's historical and psychological, and small town versus large town, and parents worried about their children."

After Wallen retired, there was a move to unify the three school districts she had previously governed, but Cayucos' school board opted out. Cambria Elementary and Coast Union became the Coast Unified School District, and Cayucos students continued to head to Coast for high school.

The money issue

James Brescia is the current superintendent of the San Luis Obispo County Office of Education and former Cayucos superintendent. He said that during his tenure at Cayucos, a group of parents gathered enough signatures together to petition the county to change the feeder high school district for Cayucos from Coast Unified to San Luis Coastal. The effort was unsuccessful, in part because not all of the state education code's criteria were met, according to a study prepared by The Smith Group in September 2012.

The report concluded that the territory transfer would severely impact Coast Unified's educational programs and potentially jeopardize its status as the highest achieving rural district in California, would result in increased property taxes for the district's taxpayers due to a bond measure passed in 1998, and would result in a loss of $1.2 million in property taxes for the district (16 percent of the district's revenue).

It was estimated that Coast Union would potentially need to close down Santa Lucia Middle School and lay off at least nine teachers and more than six staff members, should it lose those property taxes.

"The CUSD supports all students from Cayucos attending Coast Union, as has been the arrangement for over 80 years, but understands that circumstances arise that need to be addressed on an individual basis," then Coast Unified Superintendent Chris Adams stated in an Aug. 12, 2012, letter to the county.

In 2014, before Brescia left his post to run the county education office, Cayucos, Coast, and San Luis Coastal came together with the county to try and hash out a deal that would enable parents to have a choice between the two high schools and also allow money to follow the students.

A quick search through San Luis Coastal's board meeting minutes shows that negotiation fell apart between February and May of that year due to a disagreement over just how much money would follow each student from Coast Union to Morro Bay high schools.

The memorandum of understanding, which wasn't approved by either Coast or San Luis Coastal's boards, stated that Coast Unified would transfer an amount equal to 75 percent of the Local Control Funding Formula (the state's latest funding scheme) for each student and transfers would be limited to 20 students per year. In 2014, that amount was about $6,314 per student.

San Luis Coastal's board wanted more than that per student and withdrew support from the memorandum, "citing that fact that San Luis Coastal's cost to educate students far exceeds this amount," according to minutes from the April 24, 2014, meeting. The board said it would not make it back to the negotiating table unless Coast was willing to look at "full revenue limit funding," which the district valued at approximately $11,000.

In May 2015, Coast Unified offered another solution. Its school board passed a memorandum of understanding—San Luis Coastal said it hadn't looked at or agreed to the memorandum and asked Coast Unified's district board not to approve it—as a show of good faith that it was willing to enter into negotiations once again, according to Coast Unified Superintendent Vicki Schumacher. Coast Unified was unable to produce a copy of the memorandum for New Times.

"Up until this time, we haven't entered into negotiations with Cayucos and San Luis Coastal, but we continue to be open to doing so," Schumacher said. "We understand that students have a choice for high school, and we understand in revenue-limit districts there's a certain amount of money that follows the students, but because we are in a unique situation with three basic aid school districts, that isn't automatic."

Independence, choice

Cayucos Superintendent Scott Smith is a proponent of parent choice for where students will go after graduating from eighth grade. According to Brescia, about 25 students graduate each year from Cayucos, so roughly 100 high school students from Cayucos in any given year are attending either Coast or Morro Bay.

"Both schools are great, parents have been pretty fortunate and have had the opportunity to say do I want a smaller school [Coast Union] or do I want a little bit bigger comprehensive high school in Morro Bay," Smith said.

Parents' anxiety about the Cayucos high school quandary rose to the surface again in 2016, when PG&E announced that it would decommission Diablo Canyon. San Luis Coastal announced that it would have to cut certain programs and services from its budget due to the closing of Diablo—an $8 million a year funding source for that district.

"The closing of Diablo Canyon and the reduction of revenues for San Luis Coastal has parents speculating that they may not be well received," Smith said.

And for good reason, too. According to San Luis Coastal Assistant Superintendent Ryan Pinkerton, one area the district will examine for potential cuts is its transfers program. Transfer students from Cayucos accounted for 64 percent of the district's high school transfers in 2016-17. While 43 Cayucos students enrolled at Morro Bay High School last year, they don't bring any revenue to the district and received an education priced at $9,700 per student (in local taxes).

According to the state's School Accountability Report Card from the 2015-16 school year, Coast Union High School was giving an education priced at $10,751 per student per year. Schumacher said she couldn't say how many students from Cayucos would be attending school this year until after school starts on Aug. 22.

San Luis Coastal's transfer dilemma stretches beyond Cayucos and Morro Bay High School. Last school year, the district accepted 167 transfer students across all grades and schools.

"We're going to be raising our class sizes, most likely, to deal with some of our budgetary issues. So why would we add extra kids and raise our class sizes even more?" Pinkerton said.

He noted that Cayucos students currently enrolled in district schools shouldn't worry about losing their transfer status if the district decides to block transfers going forward.

Prior to just a few years ago, blocking Cayucos transfers was the district's policy. But the district realized that many Cayucos parents would forge their addresses just so their kids could attend Morro Bay High School.

Following some of the recent failed negotiations, San Luis Coastal's board of trustees decided to lift the transfer ban policy for the short-term.

"Our board has said [to Cayucos and Coast Union School District], 'We know you guys are working on it. We know you're trying to figure something out. So we're going to be good to the kids and allow them to come,'" Pinkerton said.

But Diablo Canyon's looming closure and the budgetary consequences have changed the landscape of the discussion. Pinkerton said San Luis Coastal is open to scenarios that allow Cayucos students to attend Morro Bay High—as long as they bring funding.

"We've kind of stepped out of this and said, 'You figure this out,'" he said. "'Figure out a way for the money to follow the kids.'"

Unfortunately, the elementary school district can't force San Luis Coastal to take its students and it can't force Coast Unified to send money with its transfers. According to Cayucos school board President Terry Throop, the board doesn't really have a huge say in what happens to Cayucos high school students, other than to give its opinion. But because parents approached the board with their concerns, the district recently looked at what three reorganization options might look like.

The proposals include: keeping things as they are and sending students to Coast Union High School, creating a high school of its own and becoming a K-12 district, or disbanding altogether and unifying with San Luis Coastal Unified School District. The board hasn't yet made a decision to advocate for any of the options.

At the Aug. 9 board meeting (after New Times went to press), the board was scheduled to vote on whether to work with a Sacramento-based law firm. The move is intended to help clarify and identify realistic goals for the Cayucos community and school district moving forward, according to Throop.

"We could be advocates for whatever role people choose to pursue," Throop said. "Two of the three proposals that exist now would radically change the nature of the Cayucos Elementary School District, so we have to stay informed of how the options will affect the district itself." Δ

Staff writers Karen Garcia and Peter Johnson and Editor Camillia Lanham contributed to this story. Reach them through the editor at [email protected].