Digest/28 inches/mark2nd

School Employees Demand Raises

The seven unions that represent employees of the Los Angeles Unified School District are putting pressure on the school board to spend a state budget windfall on raising salaries.

Union officials have threatened to use their political clout to punish school board members who don't support a pay raise. They have also produced a budget analysis showing there is enough money to meet their demand for a 4 percent pay raise this year on top of the 2 percent they have already received.

An additional 4 percent pay raise would cost the district $108 million. The school district is getting $60 million more than expected this year from the state.

Room Rates Rise, Occupancy Falls

Hotel occupancy rates dropped in L.A. County by 3 percent in August from the same month in 1997, but that didn't prevent local hotels from raising their room rates.

Despite the slight drop-off, tourism-industry officials say there is still enough demand for local hotel rooms to justify August's 9 percent average rise in room rates. Total occupancy for L.A. County hotels was 80 percent during the month considered brisk business in the hotel industry despite the fact that it's down from 83 percent in August 1997.

Disney Suit Dismissed

A Delaware judge has thrown out a lawsuit filed by Walt Disney Co. shareholders alleging that ex-President Michael Ovitz's severance package was a waste of corporate assets.

Delaware Chief Chancery Court Judge William Chandler dismissed the suit, which sought to recoup payments made to Ovitz under the so-called golden parachute provision in his contract. The shareholders did not prove that Ovitz's "golden parachute" was a waste of funds and that Disney had obtained nothing of value, the judge argued.

Ovitz received $39 million in cash, along with stock options valued at $50 million when he left Disney in late 1996. An attorney for the shareholders said an appeal is planned.

Foundation Flees Medicare Markets

Arguing that reimbursement rates do not cover expenses, Foundation Health Systems Inc. announced it is withdrawing from the Medicare health maintenance organization business in 18 counties in the Western United States.

The Woodland Hills-based provider of managed-care plans covering 6 million people said it will drop Medicare customers in eight counties in Northern and Central California, Colorado, New Mexico and Washington. Foundation already had announced similar plans to withdraw from 10 rural counties in Northern California and several others in New Jersey and Connecticut.

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