The Santa Monica-Malibu Unified School District Board of Education was finally able to discuss a full unification package to separate between Santa Monica and Malibu entities, but the board is not ready to vote on the package just yet.
At a special board meeting on October 15, legal and financial consultants walked the board through a discussion the three core unification package tenants, those being a revenue sharing agreement, an operational transfer agreement and a joint powers agreement between eventual Santa Monica and Malibu school districts.
David Soldani, legal counsel for SMMUSD throughout negotiations with the City of Malibu, called the meeting "the beginning of a new phase of the process" wherein the board can begin to give input on potential concerns before the unification package goes to a vote.
"We’re here to walk you through, big picture, what these agreements are, and we’re here to do that publicly and transparently so that the members of your community can begin to understand and review these agreements, and be able to form meaningful opinions and have feedback and thoughts about it," Soldani said. "We’re here to listen."
Shin Green, a Principal with Eastshore Consulting, handled the financial walkthrough of the revenue sharing agreement, which is broken down into base year and annual calculations.
The base year calculation identifies the amount of revenue per pupil of SMMUSD, then adding $600 to per pupil revenue to adjust for additional cost of serving Malibu students. The adjusted per pupil funding amount is then multiplied by students enrolled in a Santa Monica Unified School District (SMUSD), creating a base year funding target that is compared to unrestricted general fund revenues of SMUSD. If revenues are less than the funding target, Malibu would make up the difference through a base year property tax transfer.
Green stated that a base year calculation is an anticipated "starting index" because there are not two separate entities to start with, and that the calculations of general fund revenues were made by looking at all line items in the SMMUSD unrestricted general fund in a year prior to separation, taking out and adjusting items like one-time revenues because they are not a part of ongoing operational funding.
The annual calculation begins by increasing the funding target for SMUSD by 4% each year, with the target subtracted by district unrestricted revenues, and any shortfalls to made made up by a transfer of Malibu property taxes.
One concern for future year calculations was brought up by board member Laurie Lieberman, who stated that locally sourced revenues that are the basis of Santa Monica funding are more volatile than the property tax revenues which anchor the Malibu side of a potential split.
"What’s clear is that this agreement only works when both the property taxes are shared and Santa Monica’s local sources of revenues are stable … our property taxes are stable, what’s not as clear to me … to the extent we start losing these (local sources) and things happen, this agreement is in trouble," Liberman said.
Green replied that it would be an "overstep" to say the loss of one revenue source would be a "death knell," and that he contemplated scenarios in which monies from local measures like Measure Y/YY and Measure GSH/GS would be reduced. While he wasn’t sure what an exact "breakpoint" would be for Malibu having to make up those lost revenues with tax transfers, the reduction can be reassessed at a future time if it becomes an issue.
The operational transfer agreement, understandably shorter than the calculation-heavy revenue sharing agreement, details "the allocation of staffing, operational processes and resources, facilitating an efficient division of services and resources" between Santa Monica and Malibu entities. The agreement touches on items such as transportation, staffing assignments, insurance and health care benefits, as well as facilities and maintenance.
One piece of facilities would be the need for a Malibu administrative office, with plans made to potentially use money from Measure MM on the Nov. 5 ballot to provide for an office in the Malibu territory.
The joint powers agreement would establish a "shared entity responsible for overseeing and implementing the agreements governing the planned division" of the district, with such an entity to not only oversee logistics of unification, but to resolve any future disputes.
Current recommendations state that the joint entity would have seven members, three appointed from Santa Monica, three appointed from Malibu, and a seventh member to be jointly appointed. It would be initially funded from equal contributions on the Santa Monica and Malibu sides, with an annual allocation from the two parties thereafter. The entity would operate similarly to the SMMUSD board, with regularly-scheduled meetings governed by The Brown Act, requiring the posting of meeting agendas.
While a vote on the unification package was hoped to be taken soon, several board members expressed the need for more discussion, including small-group meetings with counsel.
thomas@smdp.com
