Week in Review : Ventura : School District’s Finance Head Resigns

As teachers and administrators at the Ventura Unified School District continue to wrangle over a new contract, the district’s finance director--who has played a key role in the talks--announced last week that he is quitting. Frank Sandall said he’s resigning his job with the county’s third-largest school district to take a similar job with a small, rural school district outside Fresno.

But in parting, Sandall said the Ventura district must “act and act quickly” to put its ailing finances in order. He said the issue now snagging the contract talks--who will pay for skyrocketing costs of retired teachers’ health benefits--is of paramount importance to the district’s future solvency.

Earlier this month, the district and the teachers union reached a tentative agreement on a new three-year contract. But rank-and-file teachers later rejected the pact in a straw vote, mostly because it would have required them to pay for retiree benefits.

Sandall, however, maintained that unless district employees absorb the cost of retiree benefits or the district finds another way to fund those expenses, financial disaster eventually could occur. “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,” he 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. But the district has set aside no money since that report and continues to pay benefits out of yearly revenue.

The estimated cost this year for the district’s 600 teachers alone is $1 million. 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 by a Los Angeles consulting firm estimated that the district could face retiree costs as high as $21 million annually.

Because the district has set aside no reserve for future claims, the cost of retiree benefits will prove increasingly difficult to pay, Sandall said. He suggested the district could raise some money through creative moves such as swapping undeveloped district land for revenue-producing properties.

However, if the district is to avoid financial collapse it must immediately alter its current policy of awarding lifetime health benefits, he said. Most other school districts stop paying medical benefits at age 65, Sandall said.