Laguna Parents Confront District Over Budget Crisis

LAGUNA BEACH — With an $800,000 shortfall now reported in the Laguna Beach Unified School District’s ever-shrinking budget, frustrated parents confronted school officials Thursday night demanding that leaders take responsibility for the crisis.

Calling it an “anguishingly painful time” for the district, one speaker suggested the leadership may have to change before the community will regain confidence in the district. While the board members and chief financial officer took heat, Supt. Paul M. Possemato took the brunt of the criticism at the special meeting.

He said some board members already know when he plans to resign, but it will not be immediately.

“By God, I’m going to stick it out till we solve this problem,” Possemato said. “That’s it.”

At Tuesday’s night board meeting, stunned parents learned that the district still does not have enough money to operate legally in the coming school year.

For months, parents, teachers and district officials have worked to cut costs and raise money to help the financially battered district.

Officials now say further cuts will be needed to maintain the 5% emergency reserve fund required by the state. Considering the district’s projected budget of about $13.2 million, there should be close to $700,000 in the fund, which instead has about $50,000. And on Thursday night, Possemato revealed additional expenses that bring the shortfall to $800,000.

School board members, who already had slashed about $1 million from the 1996-97 budget, said they will consider a variety of options to recover from this latest setback, including reassigning teachers, cutting employee benefits and dropping programs.

Thursday night, district officials made several other suggestions regarding changes that could add $431,000 to the budget. But one frustrated parent said the suggestions amounted to “rearranging the deck chairs on the Titanic.” Parents said more sweeping changes are needed.

SchoolPower, an organization that raises money for the district, had threatened to withhold $500,000 it had gathered for enrichment programs until officials can balance the budget. Since the district has included most of this money in its anticipated revenue, it will be in even more trouble if those funds are held back.

In struggling with the financial crisis in past months, Possemato has blamed it on shrinking property tax revenue and, to a lesser degree, losses incurred in the county’s bankruptcy and the 1993 firestorm.

Possemato said the district has continued to pay high salaries to teachers and administrators, but no longer has that luxury.

“The bottom line is, we can no longer afford our salaries.”

School officials say the shortfall was discovered when a bookkeeping error was uncovered. A $300,00 accounting error was made in the 1995-96 budget. When the 1996-97 budget was created, the error was carried forward, making a total budget error of $650,000.

The budget discussion will continue at the next regular school board meeting on Tuesday.