Council to Discuss Threat to Public Services or Facilities

The agenda for next Tuesday’s City Council meeting includes a discussion with regard to a threat to public services or facilities. The public will not have the opportunity to comment on the matter as the potentially worrisome issue will be heard in closed session.

California Government Code section 54957 allows for a legislative body to meet in closed session to discuss “a threat to the security of essential public services, including water, drinking water, wastewater treatment, natural gas service, and electric service, or a threat to the public’s right of access to public services or public facilities.”

The agenda discloses no details as to the nature of the threat.

In recent months, however, the City has implemented enhanced security measures at City Council meetings and hired armed guards to patrol City libraries.

Cash Strapped TUSD Seeks to Borrow $12 Million

At its last meeting, the School Board authorized a complicated lease financing arrangement that would allow the District to borrow $12 Million. According to the approved resolution, the monies are needed to fund the construction of gymnasium facilities and school modernization projects such as roofing, electrical and pavement improvements, science labs, lockers upgrades, painting, and related site work.

Gymnasium facilities and the aforementioned school improvements were previously listed among those projects that would be completed with funding from the nearly $200 Million voter approved bond measures T and U passed in 2014.

In addition to the listed projects, the monies may be used to fund a reserve fund. District reserves have plummeted in recent years as TUSD deficit spending has soared. As recently as Fiscal Year 2013-14 the District had a budgeted $46.1 Million in reserves. Shortly after receiving a qualified certification from the California Department of Education last June, the District released a budget showing the reserve amount was expected to drop to only $5.2 Million by FY 2019-20. That figure was $2.3 Million below the state mandated minimum.

TUSD Deficit Spending – June 2017 Budget

Per the approved resolution, the terms of the lease financing agreement shall not exceed 30 years and true interest costs shall not exceed 4.50% per annum. The transaction will cost TUSD approximately $417,374 in fees. The total payment amount of the $11,870,561 loan was calculated to be $19,148,454.

As part of the complicated financial transaction the District authorized a ground lease of the Levy Adult School, and the Griffith Adult School (including the Gene Drevno Community Day School) to the Torrance Unified School District Public Facilities Corporation. If the valuation of those properties is deemed insufficient, then the District authorized that J.H. Hull Middle School and the District offices could be added to the Lease Agreement. The District will then sublease the property back from the Corporation.

Per one resource, an advantage of the complicated financial instrument is that it allows a government body to fund a project without incurring a debt that might normally be subject to voter approval. Potential risks include high interest rates and risk that the government body could lose its accumulated equity in the leased property if it cannot make the lease payments and is forced to return the leased property to investors.

The District will be obligated to make the payments owed due to the lease financing agreement from its General Fund. The School Board passed the measure without discussion.

Torrance Teachers Protest Over Stalled Contract Negotiations; District Net Worth Falls to Negative $28.7 Million

Torrance teachers picketed outside District offices on Monday during that evening’s School Board meeting in protest to stalled contract negotiations. At the meeting, Torrance Teacher Association (TTA) leaders and several of their members either spoke or read letters submitted by other teachers in the District. The speakers commented on the lack of respect and support felt by individual teachers and echoed talking points providing to TTA members.  Some of the concerns raised by the TTA and its members were:

  • The administration implemented expensive programs (i.e  Solution Tree, RTI, FWEC, and Power School) and a pricey phone system without seeking input from teachers;
  • Expensive training for new programs takes teachers away from the classroom;
  • New programs do not seem to be yielding any benefits to students;
  • Classroom instructional time is being supplanted by extraneous testing (i.e. GATE, ELPAC, Interim CASPP, F&P, and PSAT);
  • New programs seem designed to extract more and more data from the students versus enhancing their education;
  • When TTA demanded that TUSD spend down its reserve, TTA didn’t think that the administration would be allowed to go on a spending spree that would place the District in a position to not be able to afford salary increases and class size reduction.

After 10 months of bargaining, the TTA negotiation team had actually reached a tentative agreement with TUSD last October. In a newsletter to members at that time, TTA leadership noted that:

Over the past two years, TUSD has seen an increase in spending, programs, and position restoration/creation that has, for better or worse, significantly impacted the TUSD budget putting TUSD in a position to be staring at a funding shortfall in 2020. The TTA bargaining team feels that this agreement represents the “best deal possible” given the current priorities of the school board and TUSD administration.

In the last negotiated labor agreement, effectuated July 01, 2016, teachers received a 4% across the board raise, a $2800 cash bonus, and a $500 increase to their health and welfare contribution.

In comparison, the tentative deal included only a paltry 1% raise. The tentative agreement also included a controversial move to a new school year calendar that would have a pre-labor day start date beginning in the 2019-2020 school year.

The proposed deal fell through when it was not ratified by the TTA membership.

During the meeting, the School Board also accepted the 2016-17 audit report. That report reflected a $10 Million decrease in the District’s net worth as it fell from negative $18.6 Million in 2016 to negative $28.7 Million in 2017. The decrease was due in part to a 15.2% increase in costs for all programs and services which raised total expenditures to $311.3 Million from $270.3 Million in 2016. The report noted that a significant contributor to the expenditure increase was due to increased salaries and benefits.

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