Laguna Teachers Agree to Pay Cut Urged by District

After months of turmoil that brought it to the brink of a county takeover, teachers Thursday rescued the Laguna Beach Unified School District district by grudgingly agreeing to a 5% pay cut.

“The district has restructured itself so that we’re financially solvent,” said Lisa Howell, director of fiscal services. “Hopefully, with the ratification of the teachers’ contract today . . . we’ve got things under control. It’s a very good feeling.”

The district, she said, is now “on the way to fiscal recovery.”

The teachers’ pay cuts and others approved last week will save the deficit-ridden district $482,000 and enable the school board to move forward with plans to immediately borrow $850,000. This means the district will be able to present a balanced budget to the county by the Nov. 30 deadline, school officials said.

Although Thursday’s vote apparently saved the district from imminent takeover, teachers, who trudged through the rain for a special union meeting, were grim-faced about the vote. Union officials would not disclose the final tally, but said 99 of 110 teachers voted.

“It was close,” said David Slevcov, president of the Laguna Beach Unified Faculty Assn. “It was a very unhappy group.”

The school board was expected to approve the teacher pay cuts at a special meeting today at 9 a.m.

The district has been struggling in recent weeks to plug an approximate $1.4-million gap in its current $13.3-million budget. County officials have said that, if the budget is not balanced by the end of the month, they will appoint a fiscal advisor with veto power over the district’s financial matters.

County officials could not be reached for comment Thursday.

Classified and nonunion workers agreed last week to retroactive 5% pay cuts, and acting Supt. Jackson E. Parham accepted a 20% reduction in his monthly pay. The teachers’ and classified workers’ cuts are all 5% but, since they are retroactive to July 1, they will result in at least 7.5% deducted from each paycheck through the end of the fiscal year.

The teachers’ vote was crucial to the district’s financial recovery, partly because it clears the way for the district to borrow the money it needs.

Howell said she expects to present a financial report at the regular school board meeting Tuesday night showing a positive ending balance for the current school year, including an emergency reserve of at least 3%.

While the pay cuts were hard for teachers to stomach, Slevcov said they had little choice. Had they rejected the proposal, the district would have begun a process to unilaterally impose the cuts.

The district has been embroiled in a financial crisis that peaked in August, creating an uproar just as the school year was about to begin. School officials agree that the financial problems were tied to a variety of factors, especially district spending that did not reflect flattened property tax revenues.

Adding to the problems were losses incurred in the county’s bankruptcy and the 1993 firestorm, as well as bookkeeping errors.

As part of the agreement endorsed by teachers Thursday, they will join a committee that will help develop the district’s budget by monitoring income and expenditures over the fiscal year.

If property tax revenues rise over the next two fiscal years, 25% of the increase will be used to increase teachers’ salaries. Classified workers would receive a like pay raise out of the other 75%.