(December 17, 2003, updated from 12:02 a.m. initial post) -- In a bombshell disclosure at the December 16, 2003 LBUSD School Board meeting, it was revealed that the LB Unified School District District has some serious financial problems, has been spending more than it's been taking in for years...and now can't meet its legally required minimum reserve requirement.

During an oral presentation of the district's 2003-2004 First Interim Financial Report, LBUSD's Financial Services Officer Lawrence Bozanich said that "the district has never submitted, as we are tonight, a qualified report. What that means is the district, based on our current projections, may not be able to meet all of its financial obligations for the year."

Mr. Bozanich continued, "I think quite candidly, we've looked at our resources, we've looked at our estimated revenues and expense, and we have some serious financial problems."

He added, "We've had six years of spending more than we've brought in."

And this: "What this report shows is that we do not have the required one percent reserve in unrestricted funds that are in current state law."

Mr. Bozanich attributed much of the problem to increasing workers compensation costs, employee benefits and Sacramento developments.

Revelation of LBUSD's financial problems could lead to involvement by L.A. County education officials and may affect the district's credit rating, Mr. Bozanich acknowledged.

Developing. Further to follow.