Laguna Beach Unified Opens Book to a New, Optimistic Chapter

It’s been nearly a year since parental anger over the school district’s financial mess flashed through this community, costing administrators their jobs and forcing school board members to account for the troubles.

But increasingly in recent weeks, school leaders seem to have stepped from beneath the dark cloud that has shadowed the Laguna Beach Unified School District since its fiscal crisis erupted last summer, making plans for the future and looking forward with optimism.

Just this week , a parent-driven fund-raising group called SchoolPower, announced that it would be donating more than $250,000 to the district to preserve programs.

School board President Susan Mas said the gift was offered with “every confidence we will have the ability to use the money wisely. . . . If you sit back and think about what’s happened, it’s a pretty incredible turnaround.”

Also this week , trustees adopted a balanced budget for the 1997-98 school year, approved a financial report showing the district would be able to pay its bills at least until 1999, set aside money for small bonuses for district workers whose salaries were cut and hire a new superintendent and a new business manager.

And while teacher morale is reportedly still sagging, laughter has found its way back into the school board meetings.

“I think,” trustee Kathryn A. Turner said recently, “that we have turned the corner.”

Instead of searching for villains, officials here are now pointing out the heroes in this ongoing financial saga--resolute workers whose energy helped the district regain its focus.

They include Carole F. Bailey, a retired business consultant who vowed to make sense of the district’s finances and to have fun doing it; Marge and Bob Earl, a husband-and-wife team who spent months searching without pay for a new district superintendent; and Cheryl Baughn, the Thurston Middle School principal who stepped into that high-pressure job until a new leader could be found.

“I think it’s been a really transitional year,” said Wendy Offield , president-elect of SchoolPower. “I don’t think they’re all the way there, but I think we’re really on the right track.”

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The district has been working to recover from a financial crisis that was caused, in part, by waning property tax revenue, too few spending cuts, and by losses incurred in the 1993 wildfire and the 1994 Orange County bankruptcy.

Tensions peaked last August as the budget shortfall expanded and parents began demanding the ouster of school leaders. The board fired then-chief financial officer Terry A. Bustillos. Supt. Paul M. Possemato took early retirement.

In November, one of two board members up for reelection decided not to run again, and the other was voted out of office. The pair were replaced by two SchoolPower board members.

The financial picture was so grim that the school district last year became the first in Orange County to have its budget rejected by the county. In fact, with its budget still not balanced as the November deadline approached, the district came perilously close to a county takeover.

Finally, however, the board resolved the problem in part by borrowing $850,000 and cutting district workers’ salaries by 5%.

Wendy Margarita, director of business services for the Orange County Department of Education, who has worked closely with local school officials here, said Friday that recent news from the district has all been positive.

“It’s a lot of work by a lot of people that has contributed to making that all happen,” Margarita said.

Trustees here have kept a rigorous schedule during the past year, trying to regain their financial footing while rebuilding an administrative team.

This month, they hired San Bernardino County school Supt. Reed Montgomery to take the top job in Laguna Beach and Dena Graves, a business consultant with a strong background in finance, to become the new business manager. Montgomery and Graves start July 1.

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“These were essential steps in the recovery process,” acting Supt. Baughn said this week.

Also important were the community donations in building the coming year’s budget, Baughn said.

The SchoolPower money will allow the district board to continue offering a variety of programs, including high school athletics, an extra period for an elective class at the middle school and classes for music, computer and physical education at the elementary schools, she said.

SchoolPower also announced this week that an anonymous donor will match contributions made to the school district until the end of July. The first matching-fund donation was received Tuesday--$7,500 in leftover funds from an organization that formed to help victims of the 1993 Laguna Beach fire, said SchoolPower leader Bob Whalen . One district school was burned in the fire.

“It’s been a good few weeks for a change,” Whalen said Friday.

There are still plenty of challenges, including a pending lawsuit that Bustillos has filed against the district.

And the teachers union president said Friday that spirits are still low among teachers, some of whom, as an informal protest against the salary cuts, stopped using the “homework hotline,” a telephone system that allows parents to determine what schoolwork has been assigned to their children.

Morale “is low, and it’s going to be low until the salary issue is solved,” said Dennis Haryung , president of the Laguna Beach Unified Faculty Assn., which has about 100 members. “That’ll be the first giant step toward restoring morale.”

Still, Haryung added: “It looks a lot better than it did a year ago, that’s for sure.”