By BILL
A HALF-MILLION DOLLAR PLUS increase in the city’s annual “facilities” payment to the Santa Monica/Malibu Unified School District is still up in the air pending resolution of unresolved issues concerning school policies.
The annual payments began in July, 1974 after school supporters demanded the city to help out the perennially financially-strapped district. A five-year agreement called for annual base payments of $6 million. Annual cost of living adjustments have raised this fiscal year’s total payment to $6.5 million.
The cost of living increase of around $220,000 and a special increase of the base payment of $529,000 will provide about $750,000 more next fiscal year for a total subsidy of $7,227,100 according to a city memo. The memo also notes the City funds $5.3 million in youth programs at school sites and $10 million for community-based programs at other locations.
The SMMUSD has a long history of red ink. The most recent controversy involved a 5 percent pay raise for teachers tentatively approved by the school board just weeks prior to the November 2006 election. Questions immediately rose about how it would be paid for. Estimates had it contributing to a $7 million district deficit over the next three years.
The district’s then Chief Financial Officer, Winston Braham, resigned after contradicting new school superintendent, Diane Talarico, who declared the district had sufficient resources to cover the new contract. Braham’s termination payoff came with a “gag order” that prohibited him from discussing district finances, fueling even more questions about solvency, ability to manage funds and transparency in financial matters.
The district then hired the state-endorsed Fiscal Crisis and Management Assistance Team (FCMAT) to review its financial operations. FCMAT’s February 2007 report determined the district could “afford” the raise only if it made strategic changes in regard to spending, staffing, handling money and enrollment. Continued changes in financial management policies, increased revenues and/or cuts in costs would be necessary to avoid future fiscal crises.
Gagging Braham was widely viewed as a cover-up of mismanaged business practices. That and charges that parents with children in special education programs were also required to sign “nondisclosure” agreements raised red flags.
Stepping in where the school board failed to act, City Councilmen, Bobby Shriver, Herb Katz and Bob Holbrook were so concerned about district management issues and secrecy agreements, they threatened to scuttle the increase in the city’s annual base payment during recent budget reviews.
Then, a May 7 letter from the SMMUSD rescinded the gag on Braham, There hasn’t been a meeting between Braham and city council representatives yet, although, rumors are, he may appear at the June 12th council meeting.
Last week indications were that Shriver, Katz and Holbrook would support releasing the $529,000 increase pending a district policy revision on confidentiality agreements. However, that’s only solving half the problem. How about doing something about the district’s ongoing fiscal instability which is the biggest threat to our children’s’ education?
In 1999, the district granted teacher pay raises without resources to pay for them, which in turn, fueled a fiscal crisis. Back on March 12, 2001, Financial Oversight Committee chair, Michael Rich, told the school board, “Over the last 20 months, the financial crisis has become a crisis of competency and credibility, requiring fundamental reforms of serious systemic problems.”
Rich added, “These systemic problems trigger cyclical budget crisis because the district continues to approve such items as teacher salary increases though the budget does not have enough allowance for the salary increases, and because little money is held in reserve.”
With the history of fiscal troubles and complaints of gag orders on former employees and now, even parents of special education students, obviously there’s something seriously amiss at SMMUSD administrative headquarters — including something as obvious as not budgeting for teacher salary increases. The fact that all these issues have been going on for so long is very troubling.
So, who’s watching out for the public and our kids? Apparently nobody, not even school “cheerleaders” whose involvement so far has been to beg for more money.
The granting of city subsidies mandates that the city monitor both the district’s ongoing financial and operational status, carefully. It’s something that’s apparently escaped the school board’s attention as far back as 1999 and maybe before — and something the city hasn’t done until now, either.
It now falls on City Council to insure city taxpayer monies are spent openly and wisely. And, it’s also time that other council members quit playing politics and fully support Shriver, Katz and Holbrook in their efforts to return complete accountability, solvency and public confidence to the SMMUSD.
Originally published in the Santa Monica Daily Press print edition on June 4, 2007. Read the original PDF.