By Jonathan Friedman
November 24, 2009 -- The Santa Monica-Malibu Unified
School District could run out of its financial reserves by
the middle of next year. To avoid that situation, District
officials must decide on a combination of cost cuts and revenue
Board of Education members received the dark outlook during
presentations from the District’s chief financial officer
and the head of the Financial Oversight Committee (FOC) at
“Without further action, our District is projected
to burn through $22 million in reserves within 18 months,”
FOC Chair Cynthia Torres told the Board. “The Financial
Oversight Committee finds this prospect totally unacceptable.”
The District is already operating on a $10 million deficit
for the 2009-10 school year. That amount is expected to increase
during at least the next two years on the District’s
current budget plan.
The District’s financial reserves must cover the deficit.
But there is not enough money in the reserves to cover deficit
spending for much longer.
With most of the SMMUSD’s funding (72 percent) coming
from the state, California’s budget struggles become
the District’s problem, too. The state must deal with
its own estimated $21 billion budget shortfall. A consequence
of that will be less money to school districts.
Torres offered eight ideas she said could enhance SMMUSD
revenue by an estimated $6.7 million per year. One is an additional
parcel tax, something a special District committee is already
studying. The Board will consider a proposal from that committee
on a possible ballot measure at its December 10 meeting.
Other ideas include targeted fundraising, licensing the use
of District names for merchandise, a campaign to increase
student attendance (state funding is based on daily attendance)
and placing ads on District schools and buses as well as the
Superintendent Tim Cuneo said SMMUSD officials would be studying
the FOC’s revenue ideas and will come to the Board with
findings shortly after January 1. He said most of the concepts
would require more spending initially.
“These things will take time to get results, so it’s
an investment that upfront will reap some benefits down the
way,” Cuneo said. “But it’s not the quick
"The solution that we’re going to have to deal
with is very difficult decisions around programs, and those
programs are people,” the superintendent said.
Numerous programs are on the potential chopping block, although
there is no official proposal on the table. The Board members
began speaking about budget adjustments at Thursday’s
meeting, a discussion that continued during a workshop on
Also at Thursday’s meeting, the Board approved the
purchase of two homes next to Edison Language Academy for
a total of $3,365,000. District officials say the transactions
are necessary to make room for a school expansion project.
District officials had been in discussion with the two families
that own the homes for several months, but were unable to
reach settlements. An agreement was finally reached after
the District began the eminent domain legal process.
“The board found that these settlements were advantageous
and will result in substantial savings to the District,”
Board President Ralph Mechur said about the decision, which
was made during the closed session portion of the meeting.