City, School District Discuss Financing Plan

By Jorge Casuso

March 29 -- School advocates and City officials seem to be inching closer to a compromise agreement that would avert a politically divisive battle over municipal funding for the local schools.

Last week, a possible alternative to a proposed charter amendment that would require the City to give at least $6 million a year to the district was the focus of a joint ad hoc committee comprised of City Council and School Board members.

At the meeting, City officials laid out a five to ten year agreement that would provide the district with “base funding at least at the level of current ongoing and one-time funding and an annual escalator,” according to the minutes of the meeting.

The City already boosted its usual $3 million annual contribution to the district to $5.25 million last year and is willing to find one-time money to give the $6 million called for by the proposed charter amendment until a new revenue stream kicks in.

City officials are looking at raising the Transient Occupancy Tax, a move that would require voter approval and, if placed on the November ballot, could be generating revenues by the following fiscal year, City officials said.

“This really does represent a sacrifice,” Mayor Richard Bloom said after the meeting. “From my perspective it was telling people, ‘Here’s where I stand on the issue, and here’s where I’m going to stand.

“Some things need to start to happen,” Bloom said. “Talking to people, I think things are going to start to happen. The City has taken the initiative and things may start to switch.”

School Board member Julia Brownley, who sits on the committee, said the commitment needed to come up with a compromise agreement is there.

“I have a high degree of confidence that the City and the school district are serious about coming up with an agreement,” Brownley said. “We’re still talking, and I’m hopeful about that. And I’m hopeful we can come up with an agreement that is mutually beneficial and benefits the students of the district.

“We have a real good opportunity to be in partnership,” she said. “We seem to have agreed on the ($6 million) baseline, that it needs to be longer term and more predictable.”

The committee, which will meet again on Wednesday, directed City Manager Susan McCarthy and School Superintendent John Deasy to continue negotiations.

Brownley, however, cautioned that the Board has no control over the CEPS initiative and its proponents, but Mayor Bloom said that as elected representatives, both the School Board and City Council must assert leadership, according to the minutes.

Representatives of the Community for Excellent Public Schools (CEPS), the group that sponsored the proposed charter amendment, welcomed the new dialogue and said the City was moving in the right direction.

“The City’s willingness to increase on an annual basis the commitment is a wonderful step,” said Ralph Mechur, a CEPS representative. “People are talking, which is always good. People are putting aside their differences and talking about how to solve the problem.

“We are open to an agreement that provides stable and ongoing funding, that allows the district to maintain its programs and continue the search to closing the funding gap,” Mechur said.

However, Mechur noted that an agreement between the district and the City would not have the permanence provided by a charter amendment.

“Clearly the charter amendment is forever, except with a change by the voters,” he said.

One of the key sticking points that stands in the way of an agreement is the charter amendment’s requirement that the City increase its funding each year if municipal revenues grow by at least 3.5 percent. The City’s proposed agreement would provide for an annual increases to keep up with inflation.

“There is an unbridgeable gap between the two proposals,” Bloom said. “The council and City are never going to buy into a yearly increase. We’re going to take it a year at a time. That’s the way it’s going to be. What the City is proposing represents a big step forward.”

“Some people in the district,” said Council member Ken Genser, who sits on the committee, “have unrealistic expectations about what the City is able to do. Our expenses are expected to grow at a faster rate than our income. We’re going to need to keep cutting in the next four to five years.

“If we’re able to do more, the political pressure can be put on us to do more,” Genser added. “On the City’s side, we’re very determined not to make commitments that we can’t afford.”

Earlier this month, members of the CEPS met with the steering committee of Santa Monicans for Renters’ Rights (SMRR), the tenants’ group that has controlled local government for the better part of two decades. At the meeting, Mayor Bloom presented the City’s proposal.

“I decided to go to the steering committee meeting, and when the subject came up, I laid it on the line and I said, ‘This is reasonable, and let’s avoid this fight that’s looming,” Bloom said.

“People have continually talked about negotiation,” Bloom said. “I said, ‘The language people are using has to change. We have to stop talking about negotiating and start talking about agreement.’”