RODEO -- The tiny John Swett Unified School District is still struggling to get its financial house in order after several years of fiscal difficulty, according to the adviser overseeing the situation for the county Office of Education.

John Swett is one of 176 statewide,including four in the East Bay, found to be in qualified status in February's Second Interim Status Report on school agency financial health. A qualified certification means the district may not be able to pay its bills in the current or two subsequent fiscal years.

The district laid off five teachers and a group of other employees to eliminate most of a $780,000 budget gap for the 2011-12 fiscal year, said financial adviser Paul Disario, a retired chief financial officer for several California school districts.

Now, it is trying to negotiate with its labor unions a trim to the $18,000 a year it spends on each employee's medical, dental and vision benefits to bring them closer to the state average, he said.

Two years ago, it negotiated a class-size increase from 20 to 28 for the early elementary grades after the state eliminated funding for class-size reduction and found about $500,000 in savings from special education, Disario said.

"We got a fiscal adviser, made a lot of cuts, got the union to make some concessions and kept from being taken over (by the state)," Superintendent Mike McLaughlin said.

Looming over the situation are the proposed income

and sales tax increases on the statewide November ballot.

If the tax measure fails, schools will lose about 8 percent of their funding, or about $441 per student annually. John Swett would then follow Gov. Jerry Brown's fallback plan to reduce the school year by 10 days in addition to the five it has already cut, Disario said.

John Swett could also eliminate P.E. teachers at its middle school and reduce hours for custodians, cuts it recently restored, McLaughlin said.

The district has one librarian, one vice principal and one counselor covering all four of its schools.

"We're just hanging on, and we desperately need the (tax) initiative to go through," McLaughlin said.

A parcel tax to raise revenue is off the table after measures on the November 2010 and May 2011 ballots failed to gain the necessary two-thirds approval, McLaughlin said.

Both of the measures failed in part because of opposition from Conoco Phillips, the Houston-based oil company that operates a refinery in Rodeo, McLaughlin said.

"It's hard to get 66 percent in this (economic) environment and a large company throwing in a lot of money against it," he said.

The 1,600-student district covers Rodeo, Crockett, Port Costa and part of Hercules in West Contra Costa with one elementary school, a middle school, a high school and a continuation school.