Plunge in Reserve Fund Forces School District to Cut Benefits : Labor: At one point, Duarte Unified had $164 in its emergency account. Officials banked on state revenues that never materialized.

Unchecked deficit spending and reduced state funding have forced the Duarte Unified School District to cut the stipends and benefits of employees.

In mid-December, the Duarte district had $164 in its reserve fund, rather than the $580,000 it projected, said Mike Baker, a consultant with the Los Angeles County Department of Education. State law requires school districts to set aside 3% of their budgets in reserve.

“They underestimated expenditures and overestimated their revenues and got caught in the middle,” Baker said. Although all school district employees--including its 188 teachers--have made recommended cuts to bring up the reserve, “They are not out of the woods yet,” Baker said.

“It will take additional scrutiny on their business offices for the next couple of years because there are no additional funds coming from the state.”

Dennis Byas, who took over as the district’s assistant superintendent of business in June, said the district was spending more than it was taking in for about five years, eating away at its reserve. Along with wages and benefits, which account for about 85% of the school district’s budget, the district also pays the costs not covered by the state for such items as transportation, Byas said.

“We don’t consider this a catastrophe,” Byas said. “We see it as an opportunity to see where we are fat, where are we not monitoring ourselves and how can we become better. In the long run, all this is going to do is make us a stronger district.”

Teachers, however, say school district officials have mismanaged the budget, forcing teachers, managers, maintenance workers and secretaries to take cuts in stipends and benefits.

The average base pay for teachers is $41,700. However, bilingual teachers, for instance, earn an additional stipend of 6.2%, which they will now lose.

Special-education teachers will not lose their yearly stipend, which amounts to 1% of the base salary. But they will lose $2,550 a year in fringe benefits. Teachers ratified the contract proposals last week.

No layoffs are expected.

Teachers, who have been working without a contract since June, have come up with a two-year contract proposal they say will save the district $240,000 in the first year, ending June 30, and an additional $247,000 the following fiscal year. Teachers ratified the contract proposals this month.

Phyllis Peters, president of the Duarte Teachers Assn., said her members have been forced to buy their own classroom supplies and have gone without pay raises for five years. The group is recommending increases in class size and reductions in stipend pay for bilingual and special-education teachers to help rebuild the district’s reserve fund.

“Teachers are angry because they have made sacrifices and it is still business as usual,” Peters said. “It is the district and the school board that have mismanaged this money and they will not admit it.”

Byas acknowledged that there had been some accounting errors, but said there was no mismanagement of the district’s budget and no intent to defraud the district.

“What puts us in this situation is when you have unfunded mandates from the state and the state doesn’t give you enough money to pay for them,” Byas said.