Money a deterrent in SMMUSD ‘breakup’

Malibu’s separation from SMMUSD may be in jeopardy after a new financial report has revealed that the process will be more costly to the district than expected. For years, Malibu parents and education professionals have advocated for the separation of SMMUSD into two different districts. They cite unequal representation on the school board and poor distribution of district funds among the reasons for a split.SMMUSD has a Financial Oversight Committee (FOC) whose job it is to investi- gate whether separation is viable. According to Malibu Mayor Laura Rosenthal, the committee’s new forecast is completely different from the one that was so promising for advocates of a new separate Malibu school district.“These numbers have all changed this year,” Rosenthal said. “That is why the FOC changed their recommendation from the summer.”Previous projections had suggested that both new districts would be unaffect- ed financially so the new figures came as a surprise. According to SMMUSD board member Richard Tahvildaran-Jesswein, until now the split seemed feasible.“We received a report from the FOC a few months ago,” Tahvildaran-Jesswein said. “After reviewing whether the separation was viable, they came back and said there were no deal breakers.”This summer, the state reconfigured the way public schools are financed, resulting in a significant increase in the SMMUSD yearly budget. While this windfall will largely benefit the district, it does present legal complications to the district separation. After the new money was finalized, the district decided to revisit the financial reports to make sure nothing had changed. The report released by the FOC was entirely unexpected:

“The FOC concludes that the San- ta Monica-only district financial picture would be significantly different than what was reported to the board by the FOC in July 2015 and is significantly worse on a per-student basis, as compared with con- tinued operation of the existing district,” the report said.It turns out that the separation would likely result in an uneven distribution of dis- trict money, with Malibu ending up ahead. Malibu has a much higher mean property value than Santa Monica, so its property taxes would no longer benefit the new Santa Monica School District (SMMSD).“The numbers came back and it ap- pears that in the first year alone the new Santa Monica district would lose 3.5 million dollars,” Tahvildaran-Jesswein said. “And then things would get progressively worse until around year four or five where we could lose as much as six million.”While this has been a major setback for the unification project, many people involved, from Santa Monica and Malibu alike, still agree that the split is a good idea. At Nov. 22’s school board meeting, the is- sue was open to public comments for three hours. Each speaker spoke in favor of the split.“Four of the five Malibu city council members were there—Malibu has since voted unanimously in favor,” Tahvildaran Jesswein said. “One thing Santa Monica and Malibu can agree on is that unification is still the best option.”

At the meeting, possible solutions were discussed in detail. In other school district splits, agreements have been reached through legal negotiations to ensure that both sides are sufficiently funded through- out separation.“We suggested to Malibu representatives that we try to find a way to come up with a formula,” Jesswein said. “And they told us they would absolutely be open to that.”Tahvildaian-Jesswein proposed assembly of a “Blue Ribbon Panel” of the most qualified financial overseers to look at the financial report and try to draft a solution. According to Rosenthal, the logistics are complicated.“Basically, this committee could help negotiate a separation or unification,” Rosenthal said. “Tools would include getting the help of Los Angeles County Office of Education and possibly the state legislature with both advice and the potential of state legislation.”Now the SMMUSD board will need to review the FOC’s report and determine the best way to handle the already slow-going process going forward.“It was a very good discussion, and kind of a nice surprise,” Tahvildaran-Jess- wein said. “Every business, ETA, community organization—everybody—wants to make it work.”