After five months of delay, the collective bargaining agreement between the Santa Monica-Malibu Unified School District and Santa Monica-Malibu Classroom Teachers Association teachers union that calls for a five percent teacher pay increase was approved at the school board meeting Thursday, March 15th.

The teacher pay increase will be retroactive to July 1st last year.

“I want to thank the teachers for their patience and professionalism over the past five and a half to six months,” said teachers union president Harry Keiley at the meeting. “We look forward to moving forward, turning the page and beginning to have a conversation about the kids in the district, not the adults.”

After approval of the agreement, there was much clapping among members of the audience.

Action on the tentative agreement was delayed last November when questions were raised about how to fund the five percent teacher pay increase, estimated to cost $7 million over the next three years.

Some, including members of the school district’s Financial Oversight Committee, were concerned with how the district would fund the pay raise.

Without substantial changes and budget cuts, the agreement would exhaust the district’s reserves and potentially put the district into a deficit starting in three years, some believed.

In November, the Fiscal Crisis and Management Assistance Team (FCMAT) was hired by the district to perform a comprehensive independent review of the district’s finances, including the preparation of a multi-year financial projection of the district’s general fund.

The team’s review indicated that the district can fund the five percent teacher salary increase proposed in its tentative agreement and still maintain a required three percent reserve — if the district follows the team’s recommendations.

The team’s deputy executive officer, Anthony Bridges, presented his findings and recommendations on district finances to the school board February 15th. His report, dated February 8th, said that, if the district follows his recommendations, “the district will be able to maintain its required reserve.”

The district has already taken some action on the recommendations. For example, the district has already made an inter-fund transfer of $3 million from Fund 17 to Fund 40, as recommended by the Fiscal Crisis and Management Assistance Team.

Bridges pointed out that it is very important for the district to understand the impact of decreasing student enrollment. The district’s enrollment has decreased over the past two years — a result of a more restrictive district policy with the goal of reducing overcrowding in Santa Monica-Malibu schools. Enrollment is projected to continue declining.

During this same period, staffing has increased.

“The district will need to make and act on decisions regarding enrollment, inter-district transfers, staffing and available facilities if it is to sustain any financial solvency beyond this projection,” Bridges said.

Paul Silvern, chair of the district’s Financial Oversight Committee, expressed his concerns at that same meeting.

“You are right on the edge,” Silvern said. “It [this agreement] leaves you with less than $900,000 in free cash above and beyond the three percent reserve.”

The school board has acknowledged that there are still financial issues that need to be resolved.

“I feel very positive about this,” said school board vice president Oscar de la Torre last month.

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