As long as the local school district can keep its budget reserve up, possibly by stemming the decrease in student enrollment, a consultant hired by the district
says a 5 percent raise
is possible.
By Jonathan Friedman / Assistant Editor
The Santa Monica-Malibu Unified School District can afford to give its teachers the controversial 5 percent raise tentatively agreed on last fall by the administration and the union, says a consultant hired by the district. However, the consultant warned that if district enrollment continues to decline, this could lead to a different financial picture.
Meanwhile, some Santa Monica City Council members said at a recent meeting that they are concerned about the district’s desire to share its financial state with the city, possibly harming the cozy relationship the two entities have had since forming a 2004 agreement that has Santa Monica paying large chunks of money annually to the district.
A 13-page report written by Anthony L. Bridges of the firm Fiscal Crisis & Management Assistance team says the district can afford the three-year contract that calls for a 5 percent raise, without forcing the district to sink below the state-mandated 3 percent budget reserve. This assumes the district shuffles around various monies from its different accounts, as recommended by the firm.
But the largest income source for the district is from the state, which distributes money based on daily attendance. And district enrollment has decreased by nearly 800 students since the 2001-02 school year, and is projected to further decrease nearly another 600 students by the 2008-09 school year.
“The board, administration and community will need to begin identifying potential revenue increases or [decrease spending] should funding continue to decline because of declining enrollment,” Bridges wrote. “Otherwise, the district may need outside financial assistance and may face the loss of local governance and decision-making authority.”
Bridges recommended that district officials look into the possibility of allowing more children living outside of the boundary to attend district schools as a way to increase enrollment.
School Board President Kathy Wisnicki hailed the report as proof that the district can afford the teachers’ raise, which still must be approved by the board.
“I think the report should alleviate concerns and demonstrates that we are in good financial standing,” Wisnicki said in an interview on Tuesday.
Teachers union President Harry Keiley made similar comments this week, saying that he looked forward to the board approving the contract to make it official.
“Then we can move on and stop talking about the adults in the district, and focus on the children,” Keiley said.
Paul Silvern, the head of the district’s Financial Oversight Committee and a critic of the proposed contract, said on Tuesday that he had read the report, but still had some questions. He said he planned to meet with the district’s interim chief financial officer to go over the report sometime before Thursday night’s school board meeting.
“It is an interesting document that raises some interesting issues,” said Silvern, who declined to discuss specifics until he had met with the administrator.
The school district had been forced to hire its consultant after it sent a document to the Los Angeles County Office of Education last fall detailing the proposed contract and the rest of its proposed budget. The LACOE officials said their projections had the district’s budget dipping below the 3 percent reserve by the third year of the contract. They said the district needed to come up with a plan to make up for that shortfall.
Deputy Superintendent Tim Walker said this week that the board would review Bridges’ report at its meeting on Thursday. It could approve a new proposal for LACOE and the teachers contract at the March 1 meeting, or possibly the March 15 meeting.
Meanwhile, at last week’s Santa Monica City Council meeting, some members expressed concern about a resignation deal between the district and its former CFO, Winston Braham, which recently became public. The agreement stated that Braham, who resigned in November shortly after publicly rejecting the proposed teachers contract, could not comment on the district’s financial situation to a third party without approval from the superintendent or the school board. When Braham refused to endorse the proposed contract, he did so in opposition to Superintendent Dianne Talarico. Braham was given approximately $190,000 in the resignation deal.
“I am personally troubled,” said Councilmember Robert Holbrook. “There is a lack of transparency. And during the fall, we learned that there was a disagreement between the superintendent and CFO of the district. Then the CFO decided to quit. And then later we learned, recently, he’d been paid $190,000 not to discuss the financial condition of the district with anybody.”
Holbrook said this especially bothered him because part of the deal when the city agreed to increase its annual contribution to the district (which could be as much as $7.5 million next fiscal year), the district said it would have total financial transparency.
Councilmember Bobby Shriver made similar comments at the meeting, and later told the Santa Monica news Web site, The Lookout, “If the [School District] doesn’t do things in a transparent way, then [the agreement] won’t grow.”
Shriver did not respond to a request for an interview this week.
Shriver and Holbrook said at the council meeting that they would like Braham to come to a future meeting to give his opinion. School Board Vice President Oscar de la Torre, who attended last week’s meeting, said he would be open to allowing that. But this week, Wisnicki and Walker strongly voiced opposition to that idea.
“Mr. Braham is no longer an employee of the school district,” Walker said. “We would have no reason to ask him to do that, nor do we have the desire for him to do that.”
Wisnicki pointed to the fact that the Santa Monica City Council members’ comments were made prior to the issuance of the consultant’s report. She said she believed their sentiments might have changed since then.