Q & A : Paul Reed, Irvine Unified School District

Just hours after Orange County declared bankruptcy on Dec. 6, 1994, Deputy Supt. Paul Reed, who has guided Irvine Unified School District’s budget for the past decade, had grim news for his board members. “In the worst case, we’re broke,” Reed said that night. “We close the doors to the schools and we declare bankruptcy.” Irvine Unified had $107 million in the failed county investment pool, more than any other Orange County school district. But disaster was averted, in part because of $2.2 million in budget cuts. Reed, a former special education teacher and elementary school principal, said the district is reviving. He spoke with Times correspondent Russ Loar about the turnaround.

Q: What is driving the district’s financial recovery?

A: The education community won a legal argument over how the state will treat Proposition 98 entitlements. The final sign-off on the [bankruptcy] settlement and the distribution of that money has helped all Orange County school districts recover. For Irvine Unified, that amounted to $1.5 million. All of our belt-tightening has also paid off. We’re anticipating finishing the school year with a 4.5% reserve. We’ve regained a degree of financial health that might have been unimaginable on Dec. 6, 1994.

Q: Are the governor’s class-size reduction proposals realistic?

A: The governor has made a generous offer, but it does not address at all the need to create new facilities for new classes in schools that are already full. Our tentative budget has maintained a larger-than-required ending balance to give the board of education the ability to address this issue.

Q: Two school board members refused to approve next school year’s tentative $107-million operating budget, voicing concerns about the reserve funds and $471,000 earmarked for hiring new support staff. Is this expenditure necessary?

A: When we made the budget cuts to handle the bankruptcy loss, we were quite clear at the time that we were cutting very deeply. We indicated that we might have to restore some levels of staffing just so we can do the everyday things. This is necessary for the efficient operation of the district.

Q: How much of the $471,000 will go directly to the administrative side of district operations?

A: Only $60,000 goes into administration. The rest goes into clerical and technical functions. It doesn’t make sense to have your maintenance people driving to the hardware store every time they need a part because we no longer maintain a parts warehouse. It’s also difficult to run a $100-million school district with only one staff member in purchasing. These staffing augmentations are the folks who are necessary to get the job done at the hands-on level.