Laguna Beach Superintendent Resigns Post

Beleaguered schools Supt. Paul M. Possemato, the target of a community’s anger since an $800,000 shortfall in the school district budget was revealed last week, resigned late Tuesday night.

Trustees of the Laguna Beach Unified School District called Possemato, 62, into their closed-door meeting at midnight and accepted his resignation, just 24 hours after they had fired chief financial officer Terry Bustillos. Angry parents had demanded the dismissal of both men.

On Tuesday, Bustillos said he repeatedly had warned district officials of financial trouble, but they failed to heed him.

“I am not responsible for the financial problems of the district,” Bustillos said, reading from a prepared statement. “I have documentation and witnesses that will confirm that I informed the district of its significant fiscal problems more than 18 months ago and periodically thereafter.

“The district failed to act on recommendations for necessary budget reductions as provided by myself and other former members of the business services division.”

Bustillos, 46, also said he has hired Irvine attorney Bill Schaeffer to handle the matter legally. He would not comment further.

Possemato’s retirement will be effective Feb. 3; he will use accrued vacation until then. Only Trustee Linden Karen voted against accepting his resignation. President Jan Vickers said the board never discussed firing Possemato.

The district has been in turmoil since a bookkeeping error was revealed last week which, along with unexpected expenses, left the district with an $800,000 shortfall.

At a school board meeting Tuesday night, Possemato said that when he was notified of the bookkeeping error in June by Frank Canales, then director of fiscal services, he immediately called a meeting of himself, Canales and Graeme Irish, who has been hired by the district to develop a budget.

But Irish denied he was at that meeting.

Contacted at home Tuesday night, Canales said the meeting between the three men took place in mid-June. Canales said he told them that the year-end balance would be overstated by about $325,000. Irish, he said, had different figures, according to which “we were OK.”

“We went back and forth discussing entries, and [Irish] said, ‘I think my figures are correct. And I said, ‘Well, I hope you’re right.’ ”

District officials later learned that the situation was much worse than they thought.

School officials remained tight-lipped Tuesday about why they fired Bustillos. Laguna Beach Unified attorney Mark Bresee said only that it was Bustillos’ duty to administer the district’s budget, and that “the board concluded he had failed to meet his obligation to do that.”

District officials said Bustillos had offered a written defense, which they took into consideration before unanimously voting to fire him during a closed session Monday night.

Bustillos had taken a health leave in February as the budget woes were coming to light and, when that leave expired on June 30, he was placed on paid administrative leave.

Bustillos’ annual salary was about $93,000, and Possemato’s $120,000.

Possemato’s resignation under fire would have seemed unimaginable in 1991 when he arrived almost as a hero from the Los Angeles Unified School District.

“When he came here, people spoke about him as though he walked on water and we were so fortunate to get him,” parent Mary Dawe said.

Possemato was credited with restoring peace to troubled Garfield High School in East Los Angeles, where he was principal. Before his arrival, there had been one slaying and several stabbings on campus, and the school was in danger of losing its accreditation. Later, the school and acclaimed calculus teacher Jaime Escalante would be the subject of the movie “Stand and Deliver.”

As evidence of how highly Possemato was regarded by the Los Angeles Unified School District, when leaders there they were looking for a new superintendent this year, Possemato’s name was among those floated.

Within his first few years in Laguna Beach, Possemato gained admiration from co-workers for his bold leadership style and implementation of innovative programs.

In 1993, Laguna Beach High School Principal Barbara Callard called Possemato her mentor, a man of “great vision.” School board member Timothy D. Carlyle described Possemato’s leadership style as “inspirational” and lauded him for always putting the interest of children first.

Possemato launched 28 “education innovations” here, including making community service a high school graduation requirement, a youth and violence summit to help keep youngsters out of trouble and a citywide plan to help youths avoid AIDS.

The district also began teaching foreign language in elementary schools, worked to reverse a trend of falling math scores among high school students and reached out to minority students from other communities.

But parents now fear that some of the programs Possemato helped launch will become casualties in the fiscal crisis.

“There’s a reservoir of respect that a lot of us in the community have for the superintendent,” said one parent, who also believed that Possemato must go. “That’s what’s so sad about it.”

Other parents were less sympathetic.

“Boy, has he let this community down,” Carolyn Winfield said. “I think to save his face, he should get out of this town so we can pick up the pieces and carry on.”

Meanwhile, the board continued working Tuesday night to find ways to resolve the budget crisis.

Irish told the board he needed more time to develop a budget.

“I am simply not ready. I just haven’t had time. I mean, there’s only 24 hours a day,” he said before the meeting. “Right now, I’m deeply into the puzzle and trying to pull all the numbers together.” Irish said he hopes to have a budget finished by Monday.

Board members have said their immediate concern is to find a way to resolve the latest shortfall and create a balanced budget, which must be approved by Sept. 1.

“Our priority right now is to make sure we meet that deadline with the budget,” board member Kathryn A. Turner said Tuesday. “We’re really focused on trying to get that done and get it done right, and that really is consuming us. . . . Obviously, we’re wrestling with some very difficult problems.”

Having already slashed about $1 million from the 1996-97 budget, the board must now trim further, including possible pay cuts for district workers.

Bresee said the board has been in contract negotiations with teachers since June. As of Tuesday, the basic salary schedule has been added to the list of issues now up for negotiation, he said.

Possemato has said the budget trouble revolves largely around dwindling property tax reserves. The district also lost money as a result of the 1993 firestorm and the county’s bankruptcy.