Pasadena Unified’s Plans to Cut $14 Million Produced Actual Savings of Less Than $7 Million

Weeks before a new Fiscal Stabilization Plan must be submitted by Pasadena Unified to the County for approval, a reconciliation report prepared before tonight’s School Board meeting shows the Board’s earlier plans to save $14.2 million yielded actual savings of just $6.7 million.

“What was budgeted, and what actually happened, has been reconciled. There was a difference,” Pasadena Unified spokesperson Hilda Ramirez Horvath said Wednesday.

Board Member Scott Phelps acknowledged “there is the plan, and then there is reality.”

“I would want to know why some items could not be reduced,” he said.

The single biggest variance was District staffing. While 86.5 full-time positions were to be eliminated, only 38.34 actually were. Actual personnel cost savings missed the Board’s planned target by 61 percent.

In her reconciliation of the Board’s February 2018 Fiscal Stabilization Plan with actual results, District Interim Chief Business Officer Eva Lueck said in-place union restrictions prevented many teacher reductions.

Lueck also said it is now “unclear” how those staff reductions were originally calculated.

Lueck said five areas of significant variances prevented the earlier Fiscal Stabilization Plan from meeting its target. She pointed in particular to the District’s Special Education programs.

“I am very concerned with the Special Education Program in 2018-2019,” Lueck said. “While I do not have the historical background to know how it trends at this point in the year, it appears that it is escalating beyond the projections in the budget.”

Special Education funding, which is supported by the District’s General Fund, has increased from $22,754,346 in 2015-2016 to $32,532,278 in the 2018-2019 budget.

On the revenue side, upcoming Measure J on the November 6 ballot could, if passed by voters, result in a cash windfall of as much as $7 million annually for the District.

But Board Finance Committee Chair Patrick Cahalan told the Board last week “the County has informed [the District] that the County will not regard passage of [Measure J] sufficient for the purposes of including that potential revenue in our three-year budget at First Interim,” meaning the first review of the fiscal year budget on November 15.

The reduction goals, which stretch over the District’s next three fiscal years, are growing because of diminishing attendance in the District, resulting in lower state revenue to schools.

The Los Angeles County Office of Education has required that the District make sufficient cuts to restore and maintain its mandated Reserve for Economic Uncertainties at the proper level and told the District leadership in a September 14, 2018 letter that it “remains concerned that the District continues to project an REU that is below the required level in 2019-20 and 2020-21.”

The LACOE letter also stated “The County Office is prepared to take additional corrective action, should the District not fully address its structural deficit, and continue to project reserves that are below the state required minimum.”

Board Member Scott Phelps sounded an optimistic note in the face of the District’s challenges.

“We have three more meetings before November 15,” he said Wednesday evening. “We’re not going to come up with all the cuts [Thursday night], but we will get there.”