Gorman School District May Not Meet Its Financial Obligations, Los Angeles County Reports

  • (l-r) Debi Deal and Diane Branham of the state?s Fiscal Crisis & Management Assistance Team explain their findings from review of Gorman Elementary School District?s finances.

    (l-r) Debi Deal and Diane Branham of the state?s Fiscal Crisis & Management Assistance Team explain their findings from review of Gorman Elementary School District?s finances.

By Gary Meyer

Los Angeles County officials warned Gorman Elementary School District (GESD) board members Tuesday, Dec. 11, based on a financial review by the state’s Fiscal Crisis & Management Assistance Team (FCMAT), that the school district is in danger of not meeting its financial obligations in years 2008-2009 and 2009-2010.

Diane Branham of FCMAT explained the main points of a 55 page report detailing the problems facing GESD and FCMAT’s recommendations.

Branham said the district’s enrollment has declined from 159 students in 1998 to its current enrollment of 49 students; salaries and benefits are more than 130% of revenues; a small decline in attendance is forecast over the next three years and deficit spending is projected between $330,000 and $380,000 per year through 2010.

Branham said the projections did not include the possibility that the district’s charter, Gorman Learning Center (GLC), may have overpaid the district by $1.7 million, money that may need to be repaid. GLC’s financial and operational mismanagement were widely reported last spring and are now under investigation by district attorneys in Los Angeles and San Bernardino counties.

Because of GLC’s difficulties, the charter’s enrollment has declined since the school year ending 2006 from 2,169 students to only 927 now. This decline has "significantly reduced the amount of oversight fees the district receives, thereby significantly reducing the district’s revenues," the report stated.

In a letter dated November 30, Los Angeles County Office of Education (LACOE) Assistant Superintendent for Business Services Kenneth Shelton stated eight general areas of concern: deficit spending, staffing levels, declining enrollment, the district’s status as a "District of Choice," funds owed to GLC, encroachment on the General Fund by the Cafeteria Fund, the cost of health and welfare benefits including the reimbursement of health plan costs to board members (see The Mountain Enterprise, July 27, 2007) and internal controls.

In his letter, Shelton poses two options: either reduce spending and increase revenues or consider "lapsation" of the Gorman Elementary School District. The California Education Code Sections 35780-35785 define "lapsation" as: Discontinuance of a school district because the average daily attendance has declined to a level below the minimum required.

The Gorman School District is required to present a recovery plan, which the district has said will be completed by the next board meeting, January 8, 2008.

Following presentations by FCMAT and LACOE, board president Steve Sonder told the state and county officials that GESD is working with housing developers on plans for expansion of the district. These plans, he said, can help the district resolve its financial difficulties.

Newly elected Gorman Elementary School District board member Patricia Edwards and encumbent board member Steve Sonder were sworn in during the meeting.

Sonder will continue serving as board president, Julie Ralphs will be clerk and Patricia Edwards will be the board’s representative to Antelope Valley School Boards Association and the Los Angeles County School Trustees Association.

This is part of the December 21, 2007 online edition of The Mountain Enterprise.

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