Laguna Board Faces Budget, Staff Holes

A day after Supt. Paul M. Possemato stepped down under mounting pressure from angry parents, Laguna Beach Unified School District trustees pressed ahead Wednesday to solve the district’s financial crisis that has now cost two top administrators their posts.

Possemato, 62, who was hired here in 1991 after an illustrious 33-year career with the Los Angeles Unified School District, offered to take an early retirement during a closed session with the board late Tuesday.

The superintendent, who began moving out of his office Wednesday, said he had also offered to work past his scheduled retirement date in February at no salary, but board members thought he should leave sooner to defuse tensions in the community.

“Maybe my retiring and leaving early will get all the folks back on course,” Possemato said. “Nothing, from my mind, deters from the fact that this is a wonderful community.”

Board President Jan Vickers said the trustees never discussed firing the superintendent, who had become the lightning rod of controversy over the district’s financial problems.

“We made the best choice, we thought, for the district going forward and for meeting our goals to get a balanced budget in place and responding to the community,” she said.

The superintendent’s retirement is effective Feb. 3. He will be on vacation and paid leave until then, beginning next week.

Possemato has been the target of the community’s ire since it was revealed last week that the district has a shortfall of about $800,000 in its 1996-97 budget. Angry parents had demanded the ouster of both Possemato and Chief Financial Officer Terry Bustillos.

Bustillos, 46, was fired Monday night and has hired a lawyer. He claims he warned the district of money problems long ago but that his warnings were unheeded.

Meanwhile, weary board members are scrambling to fill the vacancies at the top of the administration. They will hold another special meeting at 7 p.m. tonight partly to discuss hiring an interim superintendent.

Despite the acrimony, Possemato’s office was deluged Wednesday with calls and visitors, some in tears, said Nancy Vaughan, Possemato’s administrative assistant.

“Many people are astonished and dismayed,” Vaughan said. “There’s been nothing but positive support today. The employees are just devastated and unbelieving.”

As news of Possemato’s departure filtered through the community, residents reacted emotionally, some expressing concerns about the district being “rudderless” when it is mired in a fiscal mess that could result in further program cuts as its four schools prepare to open Sept. 5.

“It really puts another big question mark on our ability to move forward,” parent Peggy Kittell said. “I think there’s anger, I think there’s sadness and I think there’s a certain amount of resolve and relief.”

Although Possemato was under intense fire, some parents lauded the enrichment programs that he brought to the district of 2,350 students.

“I think it’s really tragic that the man who has been such a visionary has to end his career like this, but it needed to happen,” said Barbara Norton, president of the local PTA Council. “Obviously, people in the community couldn’t move on and focus on what needs to happen until he [stepped down].”

Yet she praised Possemato, who was paid $120,000 a year, saying, “he brought our district up to world-class standards. . . . There was no finer person as far as creating programs that were second to none. The problem seems to be raised on the financial side. . . .”

Some teachers also expressed concerns about the timing of Possemato’s departure.

“The initial [reaction] is shock,” said Dave Slevcov, president of the Laguna Beach Unified Faculty Assn., the teachers’ bargaining unit. “I’m concerned about school district leadership, which is important, especially in a time of crisis.”

But, he added, “I don’t want parents to be worried. We’re professionals; we’re going to do a wonderful job.”

Jon Jenett, president of the nonprofit fund-raising group SchoolPower, said the community respects Possemato but needed him to leave to resolve the financial crisis.

“He’s obviously a very decent person who’s had a very distinguished career,” he said. “We wish him well in whatever he’s going to do, but we’re left with whatever we have to clean up, which is a district which is in shambles.”

Board members are taking several steps to address the financial crisis. They have hired a parent volunteer with financial expertise to provide solid figures on the district’s revenue and expenses that will help them balance the budget.

The consultant, Graeme Irish, said he plans to provide a fiscal analysis by Monday.

“In the past, we have not been able to answer the question, ‘What does it cost to turn the lights on at the high school?’ ” Irish said.

The board has also decided to hire a controller for the district.

The district’s shortfall woes came to light in February. Already, the board has slashed about $1 million from the 1996-97 budget, laying off some teachers and dropping cherished programs, including music and physical education in the elementary schools. The board approved a tentative budget in June.

But last week, school officials revealed what they said were bookkeeping errors and unexpected expenses that caused an additional deficit of about $800,000, setting off a furor in the community and rumors that the state would take over the district. State officials said Wednesday they have no plans to intervene.

Possemato has said the initial shortfall resulted from many factors, including shrinking property tax revenues, losses incurred in the 1993 fire and the county’s bankruptcy.

Board members are reexamining how the district operates. One cost-saving option mentioned is an across-the-board pay cut for district workers.

First, however, board members say they must rebuild a balanced budget in time to submit it to the county by the Sept. 9 deadline.

Contributing to this report was Times staff writer Renee Tawa.