By Ann K. Williams
Staff Writer

December 6 -- New questions emerged along with the answers at an open workshop school officials held Monday to shed light on the County's scrutiny of the District’s books.

Officials from the Los Angeles County Office of Education (LACOE) walked the District through the steps it will need to take if it’s going to be able to honor a 5 percent pay raise for teachers, already ratified by union members, but not by the board.

The raise is all but a fait accompli, Superintendent Dianne Talarico told the board, school officials and a crowd of about 50 members of the public.

“I don’t know of any opening that there is to reconsider” the agreement, Talarico told the Board.

The district could “legally finagle our way out of it,” she said.

“Of course, we’d lose all of our credibility with the people who work for our district. It would not be in our best interest,” said Talarico.

The problem that’s drawn the LACOE into the mix is that the accounting filed by the District with the County shows the raise will deplete the district’s reserve funds within three years.

LACOE officials have warned the board that the agreement “could endanger the fiscal stability of the district,” and that the expiration of the Measure S parcel tax and possible adjustments to the $6 million the City gives annually might also undermine its financial projections.

After LACOE’s Chief Business Official Ken Shelton explained the steps the District needs to take to satisfy the County that it can meet its obligations, members of the Financial Oversight Committee (FOC) shared their concerns.

“It raises so many red flags about the District’s finances, that it’s hard to know where to begin,” FOC Chair Paul Silvern said about a November 1st LACOE letter to Board President Julia Brownley.

“This is not a year three problem, this is a year one problem,” Silvern said, referring to the three-year budget projection mandated by the state.

Next year’s collective bargaining agreements, declining enrollment and the declining cost of living allowances that reduce State revenues to the schools all contribute to an uncertain future, along with unfunded pension liabilities and the expiration of Measure S, according to Silvern.

“Against this background of looming challenges, based on what we know today, the FOC urges extreme caution ratifying the contract,” Silvern said.

Though more optimistic, FOC Member Patricia Hoffman had concerns of her own.

Saying she was “less concerned about the contract than deficit funding,” Hoffman told the Board, “I don’t think that brinksmanship is the way to go.”

Her suggestion was to take a hard look at “program evaluation,” with an eye toward axing ineffective programs.

“Those that aren’t effective, that have had money thrown at them in the past, disappear,” said Hoffman.

Like Hoffman, Talarico anticipates the need to cut programs and staff.

In a district where 92 percent of the budget goes to pay for its employees -- “higher than any other place I’ve ever been” -- that’s where the cuts are going to have to be made, the Superintendent said.

Her comments were consistent with the District’s October 18 filing with the County, in which LACOE was promised “a Financial Remediation and Recovery Plan” that “will include staff reduction and possible program elimination.”

Shelton made it clear Monday that LACOE wasn’t anticipating problems of crisis proportions, but was simply “giving an outside eye to what’s going on in the District” and laying out a plan of action.

The District’s first interim budget is due to the County on December 15, he said. If the Board approves the teachers’ contract before that, the County expects the revised budget projections to be incorporated within it.

Or, the Board could buy some time by delaying ratification of the agreement, allowing the State’s Fiscal Crisis and Management Assistance Team to complete its independent review of the district’s finances before it prepares its recovery plan.

County officials were originally alerted by the checkmark next to “I am unable to certify” over Chief Financial Officer Winston S. Braham’s signature on the October document.

Braham has since resigned from the district, though his reasons for leaving have not been made public.

In an apparent allusion to the conflict that led to Braham’s departure, Talarico made it clear that she did not approve of the date of the filing, which she said could have been delayed.

“I can’t help but think that this whole conversation would be moot if we hadn’t prematurely filed” the October 18 document, Talarico said. She laid the blame at poor communication between senior staff, the Board and her office.