The Ocean View School District, rocked by an asbestos cleanup that has closed schools and displaced students, now faces a budget shortfall of an estimated $7.8 million.
"You went from being a stable district to a district that's facing insolvency," Wendy Benkert, assistant superintendent for business services at the Orange County Department of Education, told district trustees at their meeting Tuesday night.
Benkert said the district has run through $2.9 million of $4.3 million in general fund emergency reserves and faces an additional $9.2 million in costs related to asbestos removal and a modernization project at 11 schools.
Benkert sketched out worst-case scenarios should the district fail to close the $7.8 million shortfall. The district might need emergency funding from the state or wind up with the state taking over the district.
"But I believe with prudent decisions you can turn this around," she said.
Asbestos was detected in some classrooms during the modernization project that began in July. The cleanup has closed three schools and left many parents furious as they have watched their children — more than 1,600 in all — be temporarily bused to classes at eight schools in four districts.
As the crisis has unfolded, district officials have remained in close contact with the Orange County Department of Education, which has oversight responsibility.
On Tuesday, Benkert laid out options for the board, such as scaling down or delaying some construction work or selling an unused school site. Such a sale, however, probably wouldn't happen quickly enough to shore up the district's deficit, she said. Also, legal requirements would force the district to offer any open space on an unused site to the city first for a below-market rate.
"We have to start rethinking some of this stuff," Trustee Debbie Cotton said. "We need to be strategic about how we delay or cancel construction."
Kris Meyer, the district's construction management contractor, told the board that construction is "like an aircraft carrier. You can't just turn on a dime and just stop."
Meyer, a principal with Ledesma & Meyer Construction Co., which is handling the asbestos removal as well as the modernization, provided a construction update for Hope View, Lake View and Oak View elementary — the schools closed for asbestos removal.
He estimated that the cleanup at Hope View would be completed Dec. 29 and that construction might be done by mid-February. At Lake View, cleanup is expected to be completed by Jan. 23 and construction by mid-March. At Oak View, cleanup could begin Jan. 5, with construction finished by the end of March.
All those dates, he said, are best-case scenarios.
Last month, trustees approved about $9.2 million for asbestos cleanup and construction at the three schools. The spending was projected to put the district in the red by about $2.8 million, according to a staff presentation. The cost included modernization work such as new air conditioning, lights, flooring and ceilings, in addition to asbestos cleanup.
The spending comes on top of the nearly $3 million the district had already spent as of Dec. 9, according to Bekert. On Tuesday, she estimated the total shortfall of $7.8 million.
Between Oct. 28 and Nov. 26, the district paid purchase orders totaling nearly $1.2 million to Ledesma & Meyer, according to a report available at Tuesday's meeting. The architect working on Hope View, Lake View and Oak View received a purchase order of $343,320 in the same period.
A special board meeting to discuss options to close the shortfall is scheduled for 5 p.m. Thursday at the district headquarters, 17200 Pinehurst Lane, Huntington Beach.
When Hope View, Oak View and Lake View were built decades ago, asbestos was used as fireproofing on metal beams above the ceilings. Over time, asbestos dust began to fall from the beams and settle on classroom ceiling tiles, district records show.
Parents became concerned in October that their children might have been exposed to asbestos dust in their classrooms while the district worked on the modernization project.
In response, the district closed the three schools and began testing for airborne asbestos at all the campuses involved in the construction project.
While asbestos that hasn't been disturbed isn't harmful to people, it can become a hazard when the dust becomes airborne. Inhaling high levels of asbestos over a long period can cause cancer and other lung disease, experts say.
According to district documents, test results at Lake View showed airborne asbestos in two classrooms higher than levels set in the federal Asbestos Hazard Emergency Response Act, which regulates how much asbestos can be present in public buildings like schools.
At Hope View, a sample taken in one classroom contained a single asbestos fiber.
No air samples taken at Oak View were above the legal threshold, district documents show.
Tests at eight other schools showed no significant level of asbestos in the air, the district said.