The Los Angeles school district and a well-known charter school have quietly resolved a conflict in a way that will help a group of employees but deepen the district's long-term budget deficit.
L.A. Unified has agreed to pay lifetime health benefits for 10 employees who worked at El Camino Real Charter High School through last year. The employees formerly had worked at L.A. Unified, but left the district when the Woodland Hills school became an independent charter.
The employees — including eight teachers — then returned to L.A. Unified just long enough to file for retirement and thus qualify for the district's lifetime benefits.
El Camino Real Charter is in charge of its own funding and manages its own benefits under a board of directors.
Six months ago, when senior officials learned of the employees' intentions, L.A. Unified refused to provide the benefits, which will cost the district and taxpayers $2.5 million to $3 million over the life of the retirees, according to actuarial estimates. Nearly 50 charter teachers had done the same in the past without opposition from L.A. Unified.
But this time, district officials came under scrutiny after The Times inquired about the practice. And they disliked that El Camino paid bonuses as high as $30,000 apiece if the employees took their retirement costs away from El Camino.
Last week, district officials reversed themselves.
"We are going to honor our commitments to provide lifetime benefits to their employees," said L.A. Unified General Counsel David Holmquist.
The reversal ultimately was based on direction from the elected L.A. Board of Education, which met in closed session over the issue.
The board was not legally obligated to report any action that it took, Holmquist said, because the matter related to a formal and confidential employee grievance.
The seven-member board includes both charter-school proponents and union allies. Most charters are not unionized, and unions and charters are typically at odds. But El Camino is that rare union charter, and the union wanted to protect its members' entitlements.
California has more than 1,000 school districts. L.A. Unified is among about 70 that provide some form of post-retirement health benefits, which can be earned through long service. L.A. Unified's package is among the most generous. It's also far from fully funded, contributing to an estimated future debt of $13.6 billion.
The district's own chief financial officer called that financial obligation "scary." It is one key factor threatening the long-term solvency of the school system. And paying it down means less money left for classrooms and for the salaries of current workers.
But the district declined to stand its ground after United Teachers Los Angeles, which represents the El Camino teachers, filed a grievance. Although grievance proceedings are confidential, multiple sources confirmed that the union asserted the district's contractual obligation.
According to that contract, El Camino teachers had up to five years to return to L.A. Unified after the school left district control in 2011 — and would retain their previous rights if they did. For some, the union asserted, these rights included lifetime benefits, even if they retired without working another day in the district.
"LAUSD was obligated to take this action because of the collective-bargaining agreement," said union President Alex Caputo-Pearl. "We ensured that the agreement was enforced and our members' rights were upheld."
In a statement, El Camino said it was "extremely pleased," adding that the charter "has always supported the best interests of our teachers and staff because of their exemplary service."
L.A. school board members on Friday did not respond to requests for comment.
Although board members have talked repeatedly about the district's dire budget situation, they have been reluctant to tamper with benefits — and in some instances have expanded them. In late August, the board approved health benefits for 4,200 part-time workers who were not among the thousands of part-time workers already covered under L.A. Unified plans.
L.A. Unified still offers the potential of lifetime benefits for new employees, but it's much harder to earn them. Most would need to work for L.A. Unified for 25 consecutive years before retirement. And their age and years of service would need to equal at least 85 when added together.
El Camino, one of L.A.'s largest public schools, remains on the hook for potential lifetime benefits for most of its employees, who have a labor contract similar to the district's. And that is not even its most pressing challenge. The school announced this week that it is parting ways with chief business officer Marshall Mayotte and that executive director David Fehte would see an unspecified reduction in his reported base pay of $221,475.
The school is trying to stave off a takeover from L.A. Unified following allegations of poor financial management practices and misspending by Fehte.