2nd Loan Sought for Compton District : Schools: Acting chief says another $9.1 million is needed. He is also seeking sweeping new powers, including the ability to dismiss the school board and lay off employees.

The acting Compton schools chief is seeking an additional $9.1-million loan for the ailing school system as well as authority to dismiss the school board, tear up union contracts and lay off any employees with 60 days notice.

Administrator Stanley G. Oswalt said Friday that the emergency loan is needed to eliminate a deficit from last year. The district had received a $10.5-million loan in July. District officials and employee groups reacted with surprise and outrage to the unwelcome financial news and to Oswalt’s proposal to broaden his power.

Conditions of the earlier loan placed the district and its estimated $91.2-million budget under the control of Oswalt, a state-appointed administrator. But Oswalt said he needs more authority to restore financial stability as quickly as possible.

Even a new loan would not prevent more painful program cuts and salary reductions, he said.

“I still have to balance the budget for this year,” Oswalt said. “And philosophically, the position of the state is that if you borrow state money, you have to suffer, and that means everyone suffers.”

Oswalt has asked Assemblyman Willard H. Murray Jr. (D-Paramount) to carry the bill, now being drawn up. Murray said they have discussed only the loan, but that he expects his bill to include other undetermined provisions that would apply to all school systems under state control. Officials from the state Department of Education said they favor the loan but have questions about the legal ramifications of Oswalt’s proposal, which would give him unprecedented authority.

Compton School Board member John Steward said he opposes such a bill. “If Mr. Oswalt cannot do the job with the amount of money he has been allocated, he should be removed and replaced with someone who can,” Steward said.

The proposed removal of board members is “a complete disenfranchisement of this community,” Steward added.

But Oswalt said board members deserved to be removed for putting the district on the brink of bankruptcy. “Responsibility has to be accepted at the board level,” he said. “It is appropriate to remove those board members and start over.”

Teachers union leaders expressed little sympathy for the board but vowed to fight Oswalt’s plan to suspend contract protections.

“No way are we going to support anything waiving all our rights,” union President Margie Garrett said. “For one person to have all this power is ridiculous.”

Oswalt said that for the duration of the crisis, he wants to run the district of 28,000 students like a private business, with the power to lay off employees as necessary.

Several officials, including board President Kelvin D. Filer, expressed dismay at the district’s escalating financial problems.

“I keep asking myself how we could possibly be that much in debt,” Filer said, citing a 1992 newspaper report that a former superintendent estimated that the district was more than $4 million in the black.

“The board was relying on our chief administrator to keep us abreast of our financial condition,” Filer said.

Auditors recently reported that the district began last year more than $1 million in the red. They also said the district owed payroll taxes, squandered millions on construction projects and food service contracts, and failed to document overtime payments and other expenditures.

County analysts said the district could not afford recent across-the-board salary hikes, including a 17% raise for teachers. Union representatives countered that teacher salaries are no higher than the county average.

Oswalt’s decisions and the state’s intervention have provoked anger in Compton, a predominantly minority community. The student population is about 57% Latino and 41% African-American. Most of the district’s employees are African-American.

Latino activists have complained that their children are poorly served by the school system and have threatened student boycotts this fall unless the district hires more Latinos and improves bilingual services.

Oswalt said he will do both.

Some African-American leaders said Oswalt’s layoffs and program cuts are colored by racism against them.

“We went from knuckleheads to skinheads. We’re paying Dr. Oswalt to denigrate and hate us,” said Kalem Aquil, a member of the Compton Citizen’s Power Action Committee, which is critical of the state takeover.

Oswalt pledged this week to improve relations through a community forum. Oswalt, a retired superintendent who agreed to run the district until the state selects a long-term administrator, said the allegations of racism are unfounded.