Planning is needed to avoid future financial struggles
SMMUSD HDQTRS — School officials are going to receive a lesson of their own today.
In light of recent news that the district could be in financial trouble if a 5-percent teacher raise is ratified, school officials will receive a briefing today from county officials on how to formulate a proper fiscal management plan.
Ken Shelton, a senior official at the Los Angeles County Office of Education, will give school board members a lesson on the AB1200, a plan specifying how a collective bargaining agreement would affect district finances.
“There’s been some concern and some anxiety in our community about the AB1200 document that was filed, and what I’m trying to do is get as many experts in as possible to share how an AB1200 is put together,” said Superintendent Dianne Talarico on Friday. “There is always a series of assumptions made when putting a document together. I want another person, an objective person [to give their input].”
When school districts reach tentative agreements with a collective bargaining party, officials are required to submit an AB1200 to the county. The district reached a tentative agreement with the Santa Monica-Malibu Classroom Teachers Association in October to grant teachers in the district a 5-percent pay raise, retroactive to July 1 of this year.
The district submitted an initial AB1200 in October to the Los Angeles County Office of Education,showing that the 5-percent pay raise would leave only $7 million in the special reserve fund,which is used to finance emergencies. The state requires that districts keep at least 3 percent of its unrestricted general expenses in the special reserve fund, or $3.6 million in SMMUSD’s case.
The AB1200 also showed that the 5-percent pay raise would result in the special reserve fund being emptied out within three years.
“The board has indicated that it believes there is more flexibility in the budget than this preliminary AB1200 suggests,” said Financial Oversight Committee Chairman Paul Silvern on Friday.
Talarico is also working with the Fiscal Crisis Management Assistance Team (FCMAT), a group under contract with the state Department of Education to offer services to educational agencies concerning financial matters, to help officials think of ways to replenish funds.
FCMAT possesses a software that can operate simulations based on different assumptions of revenues. The assumptions include whether a district receives more money from parcel tax increases, whether more funding flows in from increased enrollment and so forth.
The school district is not in financial trouble now, school officials contend, but a proper plan is necessary to avoid such a scenario.
The issue arose during a school board meeting on Nov. 16, when the board decided to postpone the ratification of the tentative agreement from its Dec. 14 meeting until January.
Silvern spoke at the meeting warning of the findings from the AB1200 and suggested the school board postpone the vote and take a step back for review.
Those in attendance at the meeting last month criticized the way both parties reached the tentative contract, accusing school officials of failing to consider how the 5-percent pay raise would affect district finances.
The Board of Directors of the Santa Monica-Malibu Classroom Teachers Association has met since the school board meeting. Harry Keiley, president of the association, said the teachers understand that additional planning is necessary.
“We plan on having a tentative agreement fully ratified,” said Keiley.
Originally published in the Santa Monica Daily Press print edition on December 4, 2006. Read the original PDF.