District Can No Longer Afford to Be the Best : Education: Montebello wanted to have the finest schools money could buy. Now it is facing dire cutbacks that many say will end what has been special and effective.

The goal was simple and laudable: to make the Montebello Unified School District the best school system money could buy.

School officials kept a librarian in every school long after other districts deemed it too expensive. They hired registered nurses instead of less expensive health technicians because nurses could offer better health care. The district developed a strong bilingual program, tracked potential dropouts and started its own nutritional program. Administrators made Montebello teachers the best paid in the county and had six applicants for every opening.

Even when the money starting running low, the district kept spending. Last year, only a bond issue prevented bankruptcy. Montebello Unified nearly spent itself out of business before a new superintendent, a new business manager and a sobered school board began a last-resort rescue plan. This week, officials approved the latest dose of painful cure: $9 million in cuts that could ruin much of what made Montebello special.

The stark, new-look school system will have three nurses and no librarians for 33,000 students. Part-time clerks will manage libraries. If students want football teams and school newspapers, they will have to raise most of the money. If teachers want a cabinet door fixed or a roof leak plugged, they better get out their own toolbox and a bucket.

These cuts are the latest in a series of budget moves that have rocked the once-proud district, forcing educators to dismantle vaunted programs and lay off teachers and other employees to avoid insolvency and a state takeover.

Harder times may be ahead. The board could be forced to make $3 million in additional cuts before August.

“For each of us board members, it’s tearing the insides out,” Darrell Heacock said. “We’ve felt pride about the district and then something like this happens.”

Before this week’s cuts, the Montebello nightmare had included slashing $26.7 million, or about 22%, since last April. By comparison, the Los Angeles Unified School District excised about 12.6% from its 1991-92 budget in one of its toughest years ever.

The cuts leave many students, parents and employees feeling betrayed. Thousands of middle and high school students walked out of classes in the last week and staged marches on the district office. Most demonstrations were peaceful. But at one protest, students pelted the district office with eggs and flour bombs. On another march, students broke bottles, walked over parked cars and raided a grocery store for snacks.

Students and graduates pleaded eloquently for classes and programs during three long public hearings and won temporary stays for industrial arts classes and some extracurricular activities.

Some of Montebello’s problems are common to all California school districts. Recession-pinched state funding for schools has increased at a rate well below inflation for four consecutive years. Lottery revenue has declined from a high of $179 per student three years ago to a projected $88 per student this year.

But poor judgment compounded the Montebello crisis. In June, 1988, the district still had reserves of close to $11 million. One year later, it was spending $11 million more than it took in. Last year, the figure rose to $17 million.

Well before the recent spending spree, the school system enjoyed a good reputation. Realty agents still use Montebello schools as a selling point in the nine Los Angeles County cities it serves. Such renown is all the more remarkable in a district with characteristics that would send some families scurrying to private schools in other areas. More than 7,700 students are from families on welfare. More than 13,500 students have a limited ability to speak English.

And yet, parents spoke of moving to Montebello for the schools. Teachers saw it as a place to aspire to work.

“I went through this school system and it was the best,” choral teacher Lorraine Verdugo said. “That’s what inspired me to go into teaching and to come back and work in this school district. I was offered jobs in other school districts, but this is where I wanted to work.”

Verdugo, an 11-year district employee, teaches choral music to more than 250 Eastmont Intermediate students. Those classes and her job will be gone next year.

Students, parents and teachers in the state’s 12th-largest school district boasted of a family atmosphere. The lack of friction especially applied to money matters.

“There were plenty of supplies, books and all other materials,” Board President Eleanor Chow said. “We let everybody go over their budget because we thought: ‘This is what the school needed and it would help the students.’ ”

Longtime Business Manager Walter Hogle kept a tight enough lid on finances until he left in 1985. His successors were unwilling or unable to deny board and administrative requests for large salary increases, new positions, special programs and construction projects.

Revenue rose only 8% from 1988 to 1990, but the district spending increased by 22%. Salaries and benefits rose 23%.

The district started costly renovation projects, counting on state reimbursement that never came. The district planned for higher lottery revenues than the state advised, then had to scramble when revenues came in lower than the state predicted.

“The school board was signing everything put under their noses,” board newcomer Frank Serrano said. “Whatever was recommended, they went along with it. They thought the information provided them was sound and it was not.”

Reserves and desperation bond sales barely kept the district afloat, but could not prevent the waves of massive cuts and the layoffs of 200 employees last year and the 200 expected for next year. Paying back the $25.3 million in bonds will remain a burden into the next century.

Veteran Supt. John Cook retired last summer under the cloud of the district’s financial crisis. Darline Robles, a popular administrator, took his place on an interim basis before getting the job in February.

Much of the money was spent on potentially marvelous programs: a nutritional study of student eating habits followed up by family counseling to improve diets; a home visit program to get parents of kindergarten children involved in school, a group of counselors to follow troubled students from middle school to high school, offering extra help and guidance along the way. Special classes for students with attendance and behavior problems provided them with extra help and removed distractions from regular classes. There were special counselors to track down frequently absent students and solve their attendance problems.

The effect of these programs is uncertain, but Montebello Unified’s dropout rate declined from 25% in June 1989 to 12.7% in June, 1991.

“We’ll find out this year and next how well they worked because the programs aren’t there any more,” Acting Assistant Supt. Faustino Ledesma said. “It’s a helluva way to find out though.”

A Troubled District BACKGROUND Montebello is the 12th-largest district in California, with 33,000 students.

It serves Montebello, Bell Gardens, Commerce and parts of East Los Angeles, Downey, Monterey Park, Pico Rivera, Rosemead and South San Gabriel.

A few years ago, the system embarked on a wide-ranging improvement program. Beset with financial difficulties, the district is now facing severe cuts.

District’s ethnic breakdown Anglo: 6% Other: .5% Asian and Pasific Islander: 7% Black: 5% Latino: 86%

CUTBACKS Following is a sample of programs that existed at the end of the 1988-89 school year and their current status: * Program: A nutritional program to study and improve student diets. * Status: Eliminated. * Program: Transitional counselors to follow troubled students from middle school to high school. * Status: Eliminated. * Program: Home visits and extra help for families of kindergartners. * Status: Eliminated. * Program: Librarians in every school. * Status: No librarian anywhere. * Program: Full-time nurses at most schools. * Status: Reduced to three nurses for 33,000 students. * Program: Attendance counselors at middle and high schools to solve problems that keep children from attending school. * Status: Eliminated. * Program: Classes for children with behavior or attendance problems. * Status: Eliminated from middle and high schools; some classes maintained through an alternative learning program. * Program: After-school sports and after-school classes for journalism, yearbook, band and speech. * Status: Funding cut at least 75%. Parents will try to make up difference through fund-raisers. * Program: Choral music program for middle school students. * Status: Eliminated. FINANCIAL BIND From 1989 to 1991, the district experienced: Revenue: 8% increase Expenditures: 22% increase Salaries/Benefits: 23% increase Deficit Spending: $28 million SOURCE: Montebello Unified School District, state Controller’s Office