The District is operating at an overall deficit with expenditures outgrowing revenues at an accelerated pace. The steady increase in public employee pension obligations, step and column salary increases, and potential negotiated employee raises all contribute to expenditures outstripping revenues. This, coupled with a steady decline in enrollment (100 students annually) to the tune of tens of millions of dollars in total lost revenue since 2014, puts the District in a precarious financial position moving forward.

To combat these challenges, the District assembled a Budget Advisory Committee to compile potential expenditure reductions and revenue enhancements. But the District continues on a negative trajectory due to inaction and lack of leadership and imagination.

Link to 2018-2019 Superintendent Mid-Year report (see pp. 15-18).

School district financing is complex. Essentially, the district receives most funding based on enrollment and attendance. Enrollment has steadily declined in PVPUSD over the last decade.

Since March 2020, hundreds of families have left the state or sent their children to private or home school. The desire for in-person experiences and less rigid restrictions on children drove many families away.

The District needs to make a concerted effort to reach these families and identify ways to bring them back to our public schools. Many people who live in Palos Verdes have the means to send their kids to private schools, so our District needs to step up its efforts to make our schools a place where kids want to be, rather than providing the bare minimum as a place where kids are forced to go.

California’s school funding system is called the Local Control Funding Formula (LCFF). This funding model provides low socio-economic communities with enhanced funding compared with more affluent communities. Thus, high performing school districts in affluent communities such as PVPUSD must rely on local revenue to provide an adequate level of funding for the education of their students.

In PVPUSD, the District relies on local revenue primarily through a parcel tax, the Peninsula Education Foundation (PEF), as well as site-specific PTA and Booster Club donations. In total, the local revenues from the parcel tax and these volunteer organizations make up approximately 10% of the District’s revenues. These local funds are critical in providing adequate per-pupil funding.

It is important to note that even with all these local revenue enhancements through the generosity of this school community, the average per- pupil funding amount is still only about average for the state as a whole and far less than the average per student in Los Angeles USD.

Absent a fundamental change at the state level, which is unlikely given the supermajority’s obvious lack of concern for children and families in areas like Palos Verdes, this funding mechanism is not going to change. Accordingly, we need to be more creative and aggressive about our finances.

The demographics of our community make a new bond measure or parcel tax nearly impossible to pass. As Californians, we are already over taxed and underserved. Despite paying some of the highest taxes in the country, we have unreliable power, water, and crumbling school facilities.

But I digress. The state expects communities like ours to pass bonds and parcel tax measures to make up for the decreased state funding. The problem with that is (aside from the fact that we don’t need any new taxes), only about 1/10 of voters in PVPUSD have kids in the school district.

Bringing the other 90% on board with self-taxation to benefit schools is a very, very tough sell, and has failed in the past. It continues to fail in other similar communities, like Manhattan Beach (see Measure A).

While excellent schools help to maintain and increase property values, that’s simply not enough to convince people to voluntarily pay more taxes.

So, in addition to the PEF’s current (wonderful) efforts to make up the difference, our district needs to get more creative about generating revenue and securing our reserves. We need to explore a possible endowment, corporate sponsorship, leasing of district property, and cut costs.

Our Budget Advisory Committee and Superintendent have proposed cost-saving and revenue-generating measures in the past, but there has been no meaningful action. It’s time for our leaders to lead and stop kicking the can down the road.

If PVPUSD cannot get its budget together and stop the pattern of spending more than it generates, it faces insolvency.

I have provided legal services to insolvent districts in the past, and it is not pretty. All local control is lost. Los Angeles County will take over. Kids lose. Property values decrease.

We do not want to go down that path. Accordingly, it is critical to make difficult decisions NOW, before the can has been kicked so far down the road it smashes into a brick wall.