Beverly Hills Suspends Funds for Schools, Cites Legal Issue

The Beverly Hills City Council has suspended its financial support of the Beverly Hills Unified School District, pending a ruling from the state attorney general on the legality of the funding.

An opinion is expected by Aug. 26.

Beverly Hills is one of the few cities in the state that regularly contributes to its school district under a joint-powers agreement.

According to the agreement, the city gives the schools $1.2 million a year in the form of lease payments for the rental of school facilities. The city also provides after-school supervision and crossing guards at an additional $200,000.

The city, which made its last payment in June, 1984, declined to continue the contributions when questions arose over the legality of the agreement.

The decision became public in July when the school board denounced the city’s action.

But Mayor Edward I. Brown said Tuesday night, “There is no intention whatsoever on the part of the city to withhold, withdraw or in any way modify the degree of financial support allocated to the school district. . . .

“However, the mechanism by which this support is allocated has only recently been reevaluated by the city staff as being subject to considerable and complicated legal concerns.”

Brown said the city suspended the lease payments after City Atty. Charles Haughton issued an opinion that Beverly Hills was not getting enough “value” for its money. City officials said the use of the school facilities was worth an estimated $375,000. The remainder of the $1.2 million, they said, could be considered an illegal “gift of public funds.”

After Haughton issued his opinion, the school board sought a second opinion from the Los Angeles county counsel’s office, which said the city could legally give the district money.

Brown said the state attorney general’s office was then asked to rule on the matter.

Brown has proposed a temporary solution: That the city give the district a seven-year advance for use of the school facilities, which would total $2.6 million.

He said that until the legal issue is resolved, the city has put its annual school contribution in a special reserve account.

School officials said the attorney general’s decision would affect the district’s 1984-85 and 1985-86 budgets. The district has been plagued by financial difficulties.

School board President Fred Stern said that if the attorney general rules that the contributions constitute an illegal gift of public funds, the loss could deplete all but $600,000 of the district’s reserves by 1986. At that point the district would face a $5-million deficit and might have to consider laying off a third of its teaching staff and other “severe steps to ensure financial solvency.”

Stern said that the district provides more than $375,000 worth of services to the city and has repeatedly tried to explain that to the City Council, but that the council does not appear to be satisfied with any of the information the district turns in. He said efforts to justify the expenses have been rejected. Negotiations over the legal dispute have been taking place for months, he said.

School board member Jerry Weinstein, one of the first to voice displeasure over Haughton’s opinion, said the City Council has views that “range from indifference to hostility” toward the school district.

“There has been a change of attitude at City Hall,” he said. “The City Council and staff have maintained a public posture of wishing to help the school district but they are refusing to give the school district one more dime.”

Brown disagreed. “This council is not going to give in to any emotional comments or charges,” he said. “We are not going to be derailed in our long-term goal of finding a permanent solution to funding our school district within the guidelines of state law”

Councilman Benjamin Stansbury was angered by the comments of some school board members who said that the council was not sympathetic to the district’s financial plight. He called such statements “mean-spirited lies.”

Even if the school district gets its 1984-85 allocation, which is sitting in the special account, and its promised 1985-86 allocation, it will only be able to operate for another year, Stern said.

School officials said that the district will still have to take drastic steps to reduce spending. One of the options under consideration is a $400-per-parcel tax which would have to be approved by a two-thirds vote.

Stern said that without additional funding the district would have to increase class sizes and elementary schools would have to drop foreign languages, physical education, art and music. The district would also reduce counseling, remedial reading and library services, he said.