Inglewood Unified School District (IUSD) is about four months away from a state takeover, but representatives from the Fiscal Crisis and Management Assistance Team (FCMAT), who have been working with district officials to find a solution to their budget crisis, urged the more than 50 people who turned out last week to learn about the situation to try to avoid this option at all cost.
“We have worked with the district since Nov. 10, and it is remarkable that they have made all the cuts Superintendent McHenry has made; $24 million in a few months. I have never seen that done.
“But the district does not have a balanced budget and does not have cash reserves available,” explained Debi Deal, a fiscal intervention specialist with FCMAT, who added, ” . . . in each and every case, state takeover is not a good outcome.”
Deal, has worked with a number of state intervention efforts, including the process at Compton Community College.
At last week’s community meeting held at Morningside High School, Superintendent Gary McHenry, Deal and her colleague Anthony Bridges, FCMAT executive officer, laid out how IUSD ended up in its present condition with a projected $14.13 million shortfall.
The simple answer, said the trio, is three years of state budget cuts, continued deferral of money owed by the state and a declining enrollment, which equals less revenue for the district.
According to McHenry, at its high point, the school district had 17,500 students; now it has 4,000 fewer.
That is the equivalent of losing more than $2.5 million, if the district were receiving its regular average daily attendance apportionment of $6,400 per student.
The superintendent urged parents in the audience to invite friends and neighbors to send their children back to Inglewood schools, but parents countered by asking how can they do that if the quality of the education is not up to par.
In addition to trying to bring in more students and cutting $24 million from its budget, IUSD attempted to obtain a Tax Revenue Anticipation Note (TRAN) from the L.A. County Office of Education (LACOE) to help alleviate the shortfall, but was denied because it was deemed not creditworthy, further limiting the district’s options.
If the state Legislature votes in June to extend the tax hikes imposed, this will provide a temporary fix.
FCMAT has also helped the district put in an application for an exemption from deferral of the June apportionment due from the state. This again will temporarily stave off zero revenue.
At the same time the district is trying to find ways to avoid state intervention officials are working with their local legislators to carry the urgency bill needed to request such action, which comes with a loan. This process, which typically takes four to six months and if approved by the Senate, Assembly and the governor, would strip the Inglewood Board of Trustees of all of its powers and replace it with a state administrator.
The salary for that individual could be $200,000 to $300,000 annually for 20 years. Additionally, the superintendent’s contract would be bought out and the district might also be obligated to spend an estimated $2.5-3 million in debt service on the loan it receives, said FCMAT officials.
Inglewood is not the only school district on shaky financial ground. According to a FCMAT report, there 12 other districts with certified negative financial reports. This means, based on current projections, they will be unable to meet financial obligations for the remainder of the fiscal year or the subsequent fiscal year.
Additionally, more than 100 school districts, including Antelope Valley Union High School, Compton Unified, Eastside Union Elementary, Hawthorne Elementary, Lancaster Elementary, Lawndale Elementary, Los Angeles Unified and Lynwood Unified were rated “qualified.” This means, based on current projections, they may not be able to meet financial obligations for the current fiscal year or two subsequent fiscal years.
If previously enacted state taxes hikes are not preserved in June by the Legislature or voters, the intervention specialist estimates some of these district may find themselves facing a situation similar to Inglewood Unified.