The Sacramento City Unified School District has arrived at a threshold that other urban, slow-growth districts have crossed recently: closing schools, consolidating campuses and renting out district property.

The budget crisis, built-out neighborhoods and stagnant enrollment have pushed the district to explore how to cut costs and get more out of hundreds of millions of dollars' worth of property.

Sacramento City Unified trustees and administrators say the district faces a budget shortfall of at least $7 million in the 2009-2010 school year.

"We are down to the bone, folks," trustee Jerry Houseman said at the Thursday school board meeting.

Other area districts have wrestled with the problem.

In the past six years, San Juan Unified School District's declining enrollment has led it to close nine schools.

Don Myers, San Juan's director of facilities and planning, said the suburban district is now discussing additional closures. Enrollment dropped another 1,000 students this year and Myers said the decline hasn't hit bottom. Meanwhile, district property and acreage combined is worth at least $2 billion, he said.

And earlier this year, Davis Joint Unified School District trustees, facing a $4 million budget shortfall, proposed closing under-enrolled Emerson Junior High to save nearly $600,000 a year.

The proposal followed a controversial decision in June to shutter Valley Oak Elementary because of declining enrollment. Angry parents opposed the Emerson plan and trustees decided to study other options.

In Sacramento, City Unified officials said they could save money – and enhance learning environments for students – by consolidating campuses. The district could also earn some income renting out unused property.

The district said its 1,178 acres and 5 million square feet worth of facilities have been appraised at between $450 million and $750 million.

Compared with neighboring districts, Sacramento City Unified has a surplus of sites in proportion to enrollment: 45,000 students and 86 school sites.

Elk Grove Unified, the largest district in the Sacramento area, has 62,000 students and 58 school sites; San Juan Unified has 40,000 students and 61 school sites; and Stockton Unified has 39,000 students and 44 school sites.

Sacramento City Unified won't decide on closures or leasing before March. Also, the community will have until at least February to provide ideas and input, officials said.

Tom Barentson, the district's chief financial officer, said the district's ideal elementary school has 400 to 600 students; middle schools, 700 to 900; and high schools, 1,800 to 2,000.

And yet, Sacramento City has 24 K-12 sites with 350 or fewer students, he said.

Some of these elementary schools have split-grade classrooms, such as a fourth-fifth grade combined. The district also has 50 K-12 sites with "considerable excess capacity."

Consolidating 24 under-enrolled sites could reduce expenses by $12 million, he said.

"We want to continue to support neighborhood schools whenever possible," he said. "But the fact of the matter is that you have to have enough students in the school to offer the best possible programs."

In evaluating whether schools should close or remain open, Barentson said a number of factors come into play: community input, school enrollment and capacity, on-site pre- and after-school programs, traffic patterns, test scores, the number of children on free and reduced-price lunch, proximity to another site, and school-age population in the neighborhood.

Barentson said the district is also talking with the city, UC Davis and California State University, Sacramento, about leasing parts of the Serna Center, the Marian Anderson Special Education Center, the Old Marshall Adult Education Center, the Fremont School for Adults and the Florin Technology Center. No properties will be sold.

Myers, of San Juan Unified, said the district hasn't sold former schools, opting instead to lease property to charter schools or use them for administrative purposes.

"If the population ever rebounds, getting back the land is almost impossible," Myers said. Also, he asked, "Where would you find a 14-acre site for an elementary school or 40 to 50 acres for a high school?"

Selling school sites in the current real estate market would be foolish, Myers said.

Bay Area education consultants Jeanne Gobalet and Shelley Lapkoff co-authored a research report on school closures in 2004. They urge districts to resist selling sites, to keep them in reserve in case enrollment grows.

In the long run, they said, California's population will continue to grow, increasing real estate value and the number of children public schools will need to serve.

Even in a built-out district like Sacramento City Unified, potential factors such as urban redevelopment, fuel price hikes and state government hiring could increase the need for schools, Gobalet said.

"Who's to say that sometime in the future there won't be enrollment growth?" she said.

Call The Bee's Melissa Nix, (916) 321-1090.