School Finance Chief Resigns, Gives Warning

The top business officer of Ventura schools has resigned to take a job near Fresno, saying the district must “act and act quickly” to put its ailing finances in order.

Frank Sandall, Ventura Unified School District’s director of finance and a 15-year veteran of the district, will leave for a similar position in a smaller, newly created district.

Sandall’s announcement comes in the midst of unresolved contract negotiations between the district and teachers in the county’s third-largest school district, negotiations in which Sandall has played a key role.

The major snag in a new contract--who will pay for the rapidly escalating costs of retired teachers’ health benefits--is of foremost importance to district finances overall, Sandall said.

Although rising costs and shrinking revenues have contributed to the district’s financial problems, Sandall said, the mounting cost of retired employees’ health benefits is the district’s biggest financial hurdle. Unless district employees absorb the cost of retiree benefits or the district finds a way to fund the expense, financial disaster could eventually occur, he said.

“I don’t think that it’s anything that they can’t get out of, but they’ve got to act and act quickly to shore up any of these areas that down the road could possibly cause serious financial difficulties,” Sandall said.

Sandall cited a 1988 study that said the district needs to set aside between $4 million and $6 million per year for 15 years to cover retiree costs. The district has set aside no money since that report and continues to pay benefits out of yearly revenue.

The estimated cost this year is $1 million for teachers. The district employs about 600 teachers.

According to the independent study, the cost of health benefits for all retired employees, estimated at $2.1 million for 1989-90, could double or triple within 10 years as more district employees retire and the cost of health care rises.

Based on projections through the year 2017, the study estimates that the district could face retiree costs as high as $21 million annually. The study was conducted by Mercer-Meidinger-Hansen, Inc., a Los Angeles-based consulting firm.

Because the district has set aside no reserve for future claims, the cost of retiree benefits will prove increasingly difficult to pay, Sandall said.

The district needs an immediate source of revenue if it hopes to continue funding retiree benefits without squeezing already strained district funds, Sandall said.

Sandall said the district could raise some of this money through creative fund raising such as swapping undeveloped district land for revenue-producing properties. However, if the district is to avoid financial collapse, it needs to alter its current policy of lifetime health benefits immediately, he said.

Most other school districts stop paying medical benefits at age 65, Sandall said. The Ventura Unified School District needs to consider a similar limit, he said.

District officials and union negotiators reached a tentative agreement on a three-year contract early this month. But teachers rejected the proposed contract in a straw vote, primarily because it would have them pay for retired teachers’ health benefits.

Teachers have been working without a contract since June.

The tentative contract agreement was the best teachers could hope for in light of strained district finances, Sandall said.

He will leave next week to take a job as business manager for the Golden Hills School District, located about 25 miles northeast of Fresno.

“After 15 years with the district, I’m looking for a challenge and a change,” said Sandall, who will leave the 15,000-student, 26-school Ventura district Monday.

The newly formed Golden Hills School District has two elementary schools and two one-room schoolhouses. It enrolls 1,100 students.

Sandall said he will take a pay cut but declined to elaborate.