Financial Oversight Committee Gets Busy

By Teresa Rochester

Salary costs, a complex budget, communication, alternative funding sources and improving the school district's fiscal practices with outside help were among the key issues tapped as priorities for the district's Financial Oversight Committee at its first meeting Tuesday morning.

Nearly two months after they were selected by the Board of Education and seven months after the Santa Monica City Council mandated the committee's creation as a condition for a $2.1 million district bailout grant, seven of the eight members plunged into hammering out their first orders of business.

"I think the work of this group will be very intense and very time consuming," Schmidt told the committee, whose members were selected because of their expertise in finance and business. "What do you want to be the working priorities of this group?"

Using a list of recommendations crafted by the now-disbanded Financial Task Force, committee members decided that first and foremost they needed to understand the district's notoriously complex budget development process, which they will address at their next meeting with the help of former task force members.

Another top priority for the committee is examining salary costs, which make up roughly 87 percent of the district's budget according to Schmidt. The district recently began negotiations with both teachers and support staff. In its study, the task force found that salaries are rising faster than revenues.

"It strikes me that number four [address issues related to salary costs in the district] needs to be our priority," said committee member Chris Harding, a prominent land use attorney. "It is the one that has substantial implications for the budget. We're the Financial Oversight Committee and we would be remiss with not addressing it.

"Certainly we're not negotiators but we should at least have a role in sorting through the implications about what agreements might be reached," Harding continued.

"We need to say that at this late date we probably won't have an impact," said committee member Babette Heimbuch, who sits on the board of First Federal Bank. "We don't want to go in and give the impression that we're going to swoop in and fix it, at least this year."

Schmidt cautioned committee members that in public meetings they could only receive the basic facts concerning the negotiations since they are carried out in closed meetings.

However, since members were elected to their position by the Board of Education the committee operates under the Brown Act and they can meet in closed session on such matters.

The committee also plans to tackle drafting a request for proposals for an outside firm to thoroughly review and make recommendations for improvement on the fiscal and budget managerial practices.

Committee members also formed a subcommittee to study on-going, long-term revenue sources for the district. The task force found that the district probably needs an additional $30 million in annual revenues to catch up with states leading the nation education spending.

The task force also recommended that the district should work with the cities of Santa Monica and Malibu to create an on-going source of funds, which would add $10 million annually for high priority education programs.

Improving the district's communication has been earmarked as another priority.

"Communication at the district has been criticized heavily for the way we communicate and the lack of information," Schmidt said. The district is in the process of hiring a public relations person.

Committee members elected RAND Executive Vice President Michael Rich as chair of the committee and former school board member Patricia Hoffman as vice chair. Along with Rich, Hoffman, Harding and Heimbuch, the committee includes Craig Hamilton, Gloria Reisner, Walter Rosenthal and Nancy Ong.

The next meeting of the Financial Oversight Committee will be at 10:00 a.m. on Oct. 5.