City Council Puts Off Discussion of Sharing Sales Tax with Pasadena Unified at Tonight’s Meeting

School Board reaches required $10.1 million budget reduction before deadline; Council, Board to hold meetings next week

Published : Monday, December 3, 2018 | 6:18 AM

The Pasadena City Council will not discuss sharing Measure J tax revenues with Pasadena Unified at Monday night’s Council meeting as previously expected because the School Board has achieved its financial target and there is no longer an urgent need to secure the funding agreement with the City, officials said Friday.

Both Mayor Terry Tornek and School Board members expressed relief that the immediate pressure to work out terms of a Measure J revenue-sharing arrangement with the City has been lifted.

The City Council discussion item has now been moved to December 10, from December 3.

Meanwhile the Pasadena Unified School District Board of Education is finalizing its Financial Stabilization Plan which must be delivered to the Los Angeles County Office of Education December 17.

That plan, seen by Pasadena Now on Friday, incorporates a significant change from the version discussed at the Board’s last meeting on November 15.

The approved plan included attempting to renegotiate the District’s Google Chromebook computers lease agreement to save about $1 million. That action has quietly been removed from the plan and replaced with additional staff reductions.

“We made our reductions target,” said Board Member Scott Phelps Friday, “and we’re going to approve our first interim budget on December 13th, and we’re going to submit it for a positive certification, which means a three percent reserve for this year, 2019, and 2020, and 2021.”

According to Phelps, the District cut exactly $10.1 million from upcoming budgets to meet the Los Angeles County Office of Education-required emergency 3% reserve, and stave off a financial takeover threatened by the County.

Mayor Tornek said Friday, “The school district seems to think that it has resolved the budgetary requirements imposed by the County. And so the December 17th deadline that we thought we were working against seems to be off the table. There were a bunch of questions raised by my colleagues at the last council meeting. So we are working toward getting responses to those, and we will have a conversation about it on December 10th.”

City Manager Steve Mermell concurred.
“The District is operating under a December 17th deadline to show it can meet its 3% reserve requirement for the fiscal year 2020-2021. The District informs me that they are confident they can meet this requirement,” Mermell said, “so the immediate urgency seems to have lessened but nevertheless, Council still has time [and] opportunity to act before December 17th, should it decide such is necessary.”

Measure J, which passed overwhelmingly in November, advises the City Council to share a third of the anticipated yearly $21 million in new revenue with the Pasadena Unified School District.

The District has been facing decreasing attendance over the last few years, placing a severe strain on its budget because State education funds are based on an Average Daily Attendance (ADA) formula. With fewer students, there is less state revenue.

The District had been told by the County in early November that it would not be allowed to calculate any of the new sales tax revenues in their budget planning.

“LACOE has not changed its position regarding the district’s use of tax revenue,” said Los Angeles County Office of Education Public Information Officer Margo Minecki.

The District had set a November 15 deadline to cut a total of $10.1 million from the next two years’ budgets in order to meet a December 17 deadline mandated by the County Office of Education. It finally met that goal this past week by reducing more District staff.

Mayor Tornek and members of the City Council have scheduled meetings next week with Pasadena Unified Board members to discuss the details of transferring the sales tax funds to the District, now that the pressure is off to meet the County’s deadline.

“This is the first step in what I think is going to be a long-term continuing dialogue,” said Tornek, “and what I anticipate, what I hope, will come out of Measure J, is a longer-term, more ongoing relationship between the two bodies. And that the City Council needs to be mindful of the fact that there is an elected School Board that is charged with the responsibility of managing the School District.

“But,” Tornek pointed out, “at the same time, that the voters had entrusted us to move money over to them. And we need to do this carefully. It’s sort of a tightrope walk in terms of wanting to be engaged and helpful to the School District.”

City Councilmember Tyron Hampton, himself a former Pasadena Unified Board member, voiced concern with the required 3% reserve, wondering if it was in fact, enough.

“I think that they need to have more reserves than the three percent that they’re saying,” said Hampton, “because you can’t have such a low margin of error. As complicated as school district budgets are, you don’t want to have a reserve that is at the bare minimum, for the county to take over.”

Mayor Tornek also expressed concern over the recent “rush” to work out a revenue sharing plan for the new tax revenues.

“I think there are some people that are really just too quick to jump to conclusions on this issue,” said Tornek, “and we need to take a breath and do things in an orderly way. There needs to be a certain amount of good faith here.”

Tornek continued, “The Council took a unanimous action to this on the ballot. We’re supportive of the initiative, the voters have spoken. Give us a chance to work our way through this, and do this in a responsible way.”

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