School Board Looking at $700,000 Shortfall

Eliminating programs, reassigning teachers and reducing employee benefits are some of the things Laguna school board members will discuss tonight as they seek to cut $700,000 from the district budget to avoid a fiscal crisis.

A financial consultant announced to school officials Tuesday night that the Laguna Beach Unified School District will not have money to operate legally unless it makes the substantial cut in the budget.

State law recommends that the district hold 5% of its expenses in a reserve fund for emergencies. Based on the district’s projected budget of about $13.2 million, nearly $700,000 should be in that account, but only about $50,000 is currently available.

“It is much more grim than we thought it was,” said Jan Vickers, president of the board of education. “We had what we understood to be a balanced budget, with $1 million in cuts over the previous year. Now we need to take out another $700,000 to make our 5% reserve.”

District officials cite dwindling property tax revenue, losses incurred in the 1993 firestorm and the county’s bankruptcy among reasons for the fiscal crunch. Laguna Beach and Newport-Mesa Unified are the only school districts in the county to rely on property tax revenue for funding, rather than attendance-based state money.

Vickers said among the options to be discussed tonight is asking the county, which has the authority to approve school district budgets, to allow the district to hold only 3% in its reserve, a move that would significantly reduce the required cuts.

The latest crisis has resulted in the fund-raising group SchoolPower withholding $500,000 earmarked for enrichment programs. Jon Jenett, SchoolPower president, said that until officials are able to balance the budget, the funds won’t be released.

“This is a tremendous district in a community with a great willingness to support it,” Jenett said. “But we’re finally saying enough is enough. We want a solid economic foundation. The time has come to ask for that foundation.”