Report Charges Orange Schools Sitting on Cash

A management consultant hired by the Orange school board has issued a report supporting what teachers in the district have contended for years--that the district has extra money in its budget.

The report, by Olav Sorenson, an assistant professor at UCLA’s graduate school of management, says the district has consistently overestimated expenses and underestimated revenue and kept unnecessarily high emergency reserves, about $15 million last fiscal year. The state’s reserve requirement for a district the size of Orange, according to Sorenson, is $5 million to $7 million.

Sorenson, who presented his report at a board meeting Thursday, said that if the district corrects its practices, it could free about $7 million annually. His report was commissioned by the school board after the June recall election.

Teachers’ salaries, among the county’s lowest, have been a contentious issue in the divided school district, where faculty unrest played a role in unseating three board members in the June recall. With four of seven board seats open in the Nov. 6 election, Sorenson’s report is likely to add fuel to an already acrimonious debate.

“What do they have against the teachers?” teachers union president Paul Pruss asked regarding the former board majority. “The last school board and their supporters, who have been crying bankruptcy, they have been deceiving the public.”

But trustee Kathy Ward, part of the old majority and who was not targeted by the recall campaign, quickly disputed the report. Ward, who seeks reelection in November, and the other trustees voted unanimously Thursday to approve a tentative agreement with the union to raise teacher salaries by 5.5%.

Sorenson “backed into the numbers to create a facade that doesn’t exist,” Ward said Tuesday. She denied that the district has had any extra funds.

District Supt. Barbara Van Otterloo and Linda Gibbs, its director of financial services, who prepares the district budget, did not return calls requesting comment.

Officials and the old board majority had long said that low salaries in the 30,000-student district were needed to keep it solvent.

But Sorenson said the board has played it safer than it needed to.

“It is true that to some degree I have the benefit of hindsight,” he said. “But the overestimations of expenses and the underestimation of revenues has been consistent. In some districts, they are up some years and down other years, but on average they are right on the money. But when it is always the same way, then it suggests it needs fixing.”