Laguna School Officials Offer to Take Pay Cuts

Desperate to solve this school district’s budget crisis, the acting superintendent has offered to have 20% slashed from his $8,000 monthly pay, while other workers have volunteered to take 5% cuts.

Laguna Beach Unified School District officials face a Nov. 30 deadline to resolve a $1.2-million budget deficit or see the county take over the district’s finances. The crisis, brought on primarily by flattened property tax revenue, peaked this summer when the financial director was fired and Supt. Paul M. Possemato took early retirement.

In addition to acting Supt. Jackson Parham’s offer, the district’s school principals and nonunion workers have volunteered to have their paychecks reduced by 5%. Also, the district on Friday reached a tentative agreement with the classified workers union that calls for about 150 secretaries, office clerks, custodians and other workers to also accept a 5% pay cut. That agreement must be ratified by the employees, who will vote on Tuesday.

As the district’s leader, Parham said he felt compelled to take the largest cut.

“It’s four times what I’m asking any other employee to take, it’s as simple as that,” he said. “I believe if you’re going to ask someone else to do something difficult, you ought to be willing to do it yourself. . . . Talk is cheap.” The school board will consider his offer Tuesday.

Recently, the district’s $13.3-million budget was rejected by both the county and state, setting the stage for the county to assume control. School and county officials have said that across-the-board pay cuts would be necessary.

“Unfortunately, because of the time of the year it is and the financial condition of the district, they have very little room to do anything else,” said Wendy Margarita, director of business services for the Orange County Department of Education, which has been working closely with school officials to resolve the crisis. “I would agree with the district’s strategy in doing that. I don’t think they have any other choice at this point in time.”

Last week, a three-member state budget review committee visited the city, interviewing administrators, teachers, office workers and even parents to try to better understand how the crisis happened and what can be done.

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School officials say the district’s financial woes are the result of various factors: Almost $1 million was lost during the Orange County bankruptcy; fourteen classrooms were destroyed during the 1993 firestorm, and, most of all, income from property taxes has leveled off. Laguna Beach Unified is the only Orange County school district that depends on property taxes rather than attendance-based state funding.

The pay cut proposal for nonunion workers that the school board will consider Tuesday night involves 14 workers, including administrative secretaries, the district’s psychologist and computer and food service workers. Since it would be retroactive to July 1, 7.5% would be clipped from workers’ salaries from now to the end of June, saving the district $37,625.

The teachers union, meanwhile, has reached an impasse in its salary negotiations with the district, and a mediator has been called in. David Slevcov, union president, said another meeting will be held Friday, where an agreement may be reached. He would not discuss either side’s proposal.

“I think we probably will be getting some agreement on Friday, and that’s all I can say,” he said.

In a separate proposal, Parham is offering to be have his pay reduced to $6,400 per month, a $1,600 monthly savings for the district. Parham’s reduction would be retroactive to September, when he signed on with the district, which means his next paycheck would be $4,800, he said.

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Parham is working for the district on a month-to-month basis. His contract was initially supposed to run for five months. On Friday, he said he is still not sure how long he will stay.

“It is putting extreme demands on my law practice for me to be here,” said Parham, an attorney who maintains a law firm in Irvine but said he puts in more than 40 hours a week for the district. Parham was a union negotiator for the district before accepting the superintendent post after other district administrators refused the job.

He has not been warmly received by some in the district who say the school board should move briskly to find a permanent superintendent.

Parham said he thinks some community activists have simply “transferred their anger at the district to me.”

“I can’t explain it in any other fashion,” he said. “I haven’t been here long enough to screw up.”

Newly elected Trustee Steven Rabago, who has differed with Parham, was unimpressed by the superintendent’s willingness to take a pay cut.

Parham is here today but “can be gone tomorrow,” Rabago said. “So I think his desire to take a cut is presumptive that he’s going to stay involved.”

But Margarita said Parham is taking an important step in relinquishing a large chunk of his pay.

“He’s sending an important message that he’s willing to forgo his personal interests for the betterment of the district,” she said.

District principals, assistant principals and other nonunion workers met Wednesday and agreed to take the salary cuts, “in light of the district’s financial situation,” a memo to the board from Parham said. Laguna Beach High School Principal Barbara Callard said some administrators had agreed last summer to either take a salary cut or make a “donation” to the district to help resolve the fiscal uncertainty.

“No one likes to take a pay cut,” Callard said. “But it’s necessary in terms of the district’s financial situation. I think everyone feels about the same.”

The pay range for principals here is $72,000 to $81,000 annually, she said. “I think we’re just all anxious to have some resolution,” Callard said.

The fiscal woes have had a profound effect on this 2,500-student district.

Last week, board President Jan Vickers was voted out of office in favor of two reform-minded activists. Trustee Timothy D. Carlyle, whose term is also expiring, did not run for reelection.

Friday was the last day on the job for Assistant Supt. Robert Klempen, but even he has offered to reduce by three the number of vacation days he has coming, the memo from Parham says.