Pasadena Unified School Board, City Council Report on Budget Woes at Joint Meeting

Pasadena Unified cuts jobs to help save millions, while City considers higher sales tax measure to stave over future deficits

Published : Friday, February 16, 2018 | 6:47 AM

Budget Woes at Joint Meeting

With the Pasadena Unified School Board fresh from passing a County-mandated Fiscal Stabilization Plan cutting millions from the District’s spending, and the City’s staff urging Council consideration of Mayor’s Tornek proposed city sales tax, the two governing bodies detailed the depths of their financial woes to each other and the public in a Joint Special Meeting at City Hall last night.

The meeting was presided over jointly by Mayor Terry Tornek and Pasadena Unified Board President Roy Boulghourjian.

Pasadena Unified Superintendent Dr. Brian McDonald spoke first, extolling the academic virtues of the School District, before laying out what he called the District’s “grim fiscal reality,” and the current and ongoing cuts in athletics, nurses, after school programs, arts and music, which he called, at various times, “devastating,” and “draconian.”

McDonald explained that the Pasadena Unified School District (PUSD) enrolls 16,685 students, has 1,740 employees, and manages a $217 million budget. Of that budget, 80 percent is spent on salaries and pensions.

“Our expenses are rising, but our revenue is not,” he told the City Council. The current deficit — which is expected to rise— “is at least $5.6 million,” said McDonald.

In the 2017-2018 year, $22 million will be spent on pensions and retirements.

Though there have been some increases in revenue over the past few years, McDonald said, “Half of the increase in revenues has gone to pay benefits.”

The School Board most recently cut $14.2 million from its budget, and will make a total of $21 million in cuts over this year and next year, McDonald said.

Fifty teachers will take voluntary retirement this year, with only half of them scheduled to be replaced, McDonald added, which will create $8.5 million in savings over the next five years.

“This will also allow the School Board to keep less-tenured teachers,” McDonald noted.

City Council members questioned McDonald over possible overlooked revenue sources, while the question of closing campuses and leasing the properties was discussed at some length.

“Would you actually close a high school?,” asked Councilmember Gene Masuda.

“Everything is on the table,” McDonald responded. “Our teachers are underpaid. We are working with labor unions, also.”

While the Pasadena City Council’s proposed ¾ cent sales tax measure, currently tabled, loomed in the air over the discussion, only one Councilmember — Andy Wilson — mentioned the proposal, remarking briefly that the Council and the School Board “should work in unity.”

There was no further discussion of the tax measure from the Council or School Board members.

Mayor Tornek said the Council is sympathetic to the District’s situation.

“It seems that the District got behind the eight-ball, taking these required actions [as mandated by the County’s Office of education], and putting them into place. I can’t think of a more controversial and thankless task for an elected official than closing a school.”

Mayor Tornek noted that, while the City has certain revenue streams it can plan on, such as the Transient Occupancy Tax, the School District is dependent on attendance rates and funds that the state provides.

Tornek also told McDonald that the Council would indeed have further discussions on the proposed sales tax measure.

“While you can’t rely on it for your financial projections,” the Mayor said, carefully, “I think it’s pretty clear amongst the Councilmembers how extreme the challenges are confronting the School District, and if we can devise some methods to take some positive steps to assist in that, then hopefully, we will.”

City Manager Steve Mermell then presented the City’s financial forecast, which as Mayor Tornek noted, looked essentially similar to the School District’s but with a few notable exceptions, such as a revenue stream.

According to current forecasts, city expenses will outstrip its income by $3.5 million in Fiscal Year 2019.

Of the $237 million earned in general revenue last year, Pasadena spent $71.6 million on police, an increase of 0.42%. The City also spent $45 million on the Fire Department, an increase of 2.74%. Public Works spending was down 9.24%, from $23.8 million to 21.6 million, and spending for libraries was up 3.74%, from $10.7 to $11.1 million.

Contributions to CalPERS — the City’s employee retirement system — have steadily climbed, Mermell noted, with costs projected to double from a steady $33 million from 2011-2015, and will climb from there through 2021, to a projected $65 million, essentially doubling in six years.

The City has also cut General Fund expenditures by $19.2 million, and reduced some local transit services. Pasadena also managed to increase its “Rainy Day Fund” from $46 million in 2008 to $52 million currently, even while drawing out reserve funds during “the great recession” from 2008 to 2012.

At the same time, Memell reported, the City has made cost reductions by eliminating some job positions, including police officers, “which is the last thing you want to do, since many would say, that public safety is a City’s most important responsibility.”

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