State Panel OKs Laguna’s Plan to Fix School Budget

As expected, a state education panel has rejected the Laguna Beach Unified School District’s deficit-ridden budget, but it supported the district’s actions to balance the spending plan and avoid future fiscal problems.

“They essentially endorsed the plan that we had already working, and they confirmed the numbers we were working with,” acting Supt. Jackson E. Parham said Tuesday.

Backing decisions already made by district trustees, the 21-page state report recommends that the district cut salaries by 5% and borrow about $800,000 to plug the $1.45-million deficit in its $13.3-million budget.

Last week, the board voted a 5% pay cut for classified and nonunion workers, and on Saturday, district and teachers union representatives reached a tentative agreement to reduce teachers’ salaries by the same amount.

If teachers agree to the pay cuts at a meeting scheduled for Thursday, the board will vote on that matter Friday.

“The solutions are not pleasant, but we’re putting them in place,” board President Jan Vickers said Tuesday. “They said there wasn’t going to be any magic answers, and I think they were on target with that.”

The fiscal crisis that erupted in August has caused the county and state to become deeply involved in the district’s financial matters.

The county Department of Education rejected the district’s unbalanced budget, a first for any school district in Orange County. The district has until Nov. 30 to balance its budget or the county will appoint a fiscal advisor with veto power over the district’s financial matters.

A three-member state review team visited Laguna Beach in October, interviewing board members, teachers, office workers and parents to learn what caused the cash crunch and to study how such problems can be avoided.

The committee found that a variety of factors, including reduced property tax revenue, precipitated the crisis. The county’s bankruptcy and the massive 1993 fire in Laguna also hurt the district financially.

“Well-intentioned people tried to maintain a high-quality educational program,” committee chairman Richard Shelton said Tuesday. “They just ran short of money to do that.”

To be fiscally solvent in coming years, the report says, the district must bring its annual expenditures in line with revenue. Recommendations include reexamining contracts for such things as transportation and custodial services and creating a budget development committee to advise the school board.

Many of the state’s suggestions are already being implemented or will likely soon be considered by the district, Parham said.