“If Pasadena voters approve a local sales tax measure, should the city use two-thirds of the measure’s annual revenue to maintain essential city of Pasadena services such as fire, police, paramedics, emergency service/response times; keep fire stations open; improve neighborhood and school safety; repair streets/sidewalks; address homelessness; maintain after-school programs/senior services; with the remaining 1/3rd of the measure’s revenue going to support Pasadena public schools?”
This extremely wordy question is Measure J, to which an overwhelming majority of voters on Nov. 6 said yes.
Voters in large numbers also approved Measure I, the sales tax measure mentioned above, which is expected to raise $21 million a year for the city.
But now, more than three weeks since the election, it’s still not exactly clear how much money the beleaguered Pasadena Unified School District should get from Measure I funds, or when those payments will be made.
Some Board of Education members are demanding their yearly cut as soon as possible in order to stave off being taken over by the LA County Office of Education (LACOE), and some City Council members question whether the financially deficient district should get the money without some sort of oversight.
The City Council is set to vote on an agenda item that could advance some Measure I funds to the cash-strapped PUSD, which is presently faced with a $10.1 million deficit — a budget gap that must be closed by Dec. 17.
The report on that highly anticipated council agenda item was not released by press time, but the item could include some type of accountability measure which will require oversight of the district’s handling of the money. It will also likely include a clause that will allow the city to cease payments once the district is financially stable, according to a recommendation made by City Manager Steve Mermell in a previously issued report on Measures I and J.
“What LACOE wants is a promise from the council and a date and an amount. What the PUSD wants is an agreement from the council to show LACOE,” PUSD Board member Patrick Cahalan said at the Nov. 19 City Council meeting.
“Should the takeover happen, you will be blamed,” Cahalan told the council.
Councilman Steve Madison stressed the council is under no obligation to meet LACOE demands.
“Their deadline is not our responsibility,” Madison said.
According to the report prepared by Mermell, city officials and PUSD’s executive leadership team had a joint conversation on Nov. 8 with LACOE officials to determine under what conditions the district could count revenues anticipated to be received as a result of Measure J toward its 3 percent reserve requirements.
LACOE made it clear that it would only accept budget reductions or specific revenues that can be relied upon.
LACOE officials also said they would only accept a formal agreement with the city and will not accept a resolution of intent.
Therefore, even if the city is willing to move expeditiously, there is no guarantee of acceptance by LACOE in lieu of further district budget reductions in time to meet the Dec. 17 deadline. LACOE is in the “driver’s seat,” wrote Mermell, and ultimately will decide what is and is not acceptable.
In his report, Mermell also said the district still needs to make cuts to cover costs incurred by special education programs to prevent LACOE from taking over the district.
The contribution taken from PUSD’s general unrestricted budget for needed special education services over the last five years was $147 million. The district’s contribution is likely to go up without an increase in funding from the federal government.
“Unless even further actions are taken, the district is unlikely to evidence a 3 percent reserve for fiscal year 2020-2021 by the time it submits its fiscal plan which is required by Dec. 17 thus triggering intervention by LACOE,” Mermell wrote.
According to Mermell’s report, a formal agreement between the city and the PUSD would be predicated on the district agreeing to prioritize the use of the funds to meet state-mandatory reserve requirements.
Also as part of any agreement, on or about the first day of each fiscal year during the term of the agreement the city would advance the district an initial amount of funding well under the anticipated amount of revenue, Mermell wrote in his report. At the end of the fiscal year, once the city has received a final accounting from the California Department of Tax and Fee Administration, the city would provide a payment to the district for the balance of funds. The fiscal year ends June 30.
The agreement could have a fixed initial term of perhaps three years or could automatically renew annually unless otherwise terminated. Once the district is financially solvent and able to meet its 3 percent reserve annually, the city could end the agreement, or the transfer of funds could occur annually as part of the city’s normal budgetary process, Mermell wrote. The process would be similar to annual transfers from the city’s power and light fund to the city’s general fund.
The City Council and the Board of Education may also establish an ad-hoc committee comprised of no more than three members from each body to enhance coordination between the city and the district to review the district’s progress in achieving fiscal stability.
Councilman Victor Gordo said the city would be making a big mistake if it did not find a way to help the school district.
“If we lose control of the district after this tremendous mandate from the voters that would be a tremendous mistake for the council,” Gordo said. “Voters intended that we keep local control.”
Local residents also told the council they wanted the city to honor the spending priorities laid out in Measure J.
“I am confident that we can at least agree on the fact that strong public schools are in the best interest of virtually all of our city, and thus I am confident that you will stand not to continue sending messages of belittling distrust public education’s way, but rather with voters to do the right thing by finally choosing to work together on the difficult task of providing for all of our children,” said Mike Severa, who spoke during the Nov. 19 meeting.
The district has been in a state of declining enrollment due to rising housing prices and apartment rent increases in Pasadena that have left many lower income families unable to live in PUSD communities — Pasadena, Altadena and Sierra Madre.
The problem has been compounded by state-mandated increases in district retirement contributions. Health benefits are also likely to increase over the next three years beyond the district’s projections, due to the dismantling of the Affordable Care Act. n