Schools Plan Joint Venture for Financing

The Bassett Unified School District plans to borrow $2.5 million this fall to finance maintenance projects and purchase equipment under a business venture with seven other school districts and three community colleges.

The participants are banding together to issue joint certificates of participation, similar to tax-exempt bonds, to raise $15 million for special projects at their schools.

Bassett, the only district in the San Gabriel Valley involved in the project, will use part of the $2.5 million to install carpeting and to replace asphalt on the playgrounds at each of its eight schools.

The district, which oversees schools in La Puente and the City of Industry, also plans to purchase several new trucks and 30 to 40 computers that will be used throughout the system.

First Venture in County

The joint venture is the first of its kind in the county, said Deborah L. Simons of the Los Angeles County Office of Education, which is coordinating the program. The county office set up the program and will issue the certificates this fall.

“This concept allows school districts to act together in a cost-effective way,” said Simons, assistant director of regional business services.

She said the participants save money by pooling resources to pay for insurance, legal advice, printing costs and other services needed to issue the certificates.

“The cities and counties have been issuing joint certificates for years, but the school districts haven’t gotten into it because that is not their emphasis,” Simons said. “They are in the business of educating kids.”

Simons said that school districts in Ventura County and other parts of the state have been successful in issuing joint certificates of participation.

Municipal governments, especially small ones, have used such programs for years to finance projects they could not support alone.

The county Office of Education began to organize the joint program two years ago in an attempt to save money for districts that were planning to issue certificates on their own.

All Districts Asked

Simons said that all districts in the county were asked if they wanted to participate and those that expressed interest were contacted.

“We required that they had decided on equipment or property they wanted to purchase or planned to be making the purchase within the next three years,” she said.

The 11 who met those requirements were selected from about 20 applicants. Simons said the Office of Education plans to organize a second group before the end of the school year to issue joint certificates.

Investors generally consider the certificates a good buy because they offer a steady, tax-exempt interest income.

10-Year Repayment

The purchaser of the certificates receives interest until the money is repaid by the district to a bank, which holds all rights to equipment purchased or projects completed in case the district defaults on the principal. The participants will be given 10 years to repay the money.

Districts participating submitted proposals with a budget and an outline of projects that need to be completed within the next three years.

Bellflower Unified School District, for example, submitted a proposal asking for $650,000 to purchase computers, portable classrooms, bleachers and other items.

Glendale Community College plans to use $1.4 million to build parking lots and tennis courts and to purchase a computerized library system.

Lowell Shira, assistant Bassett superintendent, said that the district plans to repay part of the loan with money it is receiving from the sale of Keenan Elementary School. Keenan was sold for $1.5 million to a private investor about two years ago.

Money from the state earmarked for maintenance will also be used to repay the loan.

“We wanted to do a lot of the maintenance now and pay for it over a few years,” Shira said.

District officials were considering issuing certificates when they learned of the program through the Office of Education, he said.

New Carpeting

Shira said each of the district’s schools will get 5,000 square feet of new carpeting, except for Bassett High School, which will receive 10,000 square feet.

In addition, air conditioning and heating systems will be replaced at Don Julian Elementary, Sunkist Elementary, Torch Middle School and Bassett High School.

Also, all schools in the district will get new classroom lighting, have their alarm systems renovated and get new asphalt for playgrounds.

Shira said the district plans to install new seats in the Little Theater, which seats 200, at Bassett High School. In addition, the high school’s gymnasium will get new bleachers.

Shira said that before deciding to take part in the program, he consulted other districts that had issued certificates on their own, including the 21-school Rowland Unified School District.

Rowland borrowed $2.2 million by issuing its own certificates last fall to pay for a variety of projects, including installing an air conditioning system at one of the high schools and installing lights in the district’s football stadium.

Dick Angarola, deputy Rowland superintendent, said it would not have been economical to issue certificates had the amount sought not been so large, .

“You wouldn’t (issue certificates) for a couple of hundred thousand dollars,” Angarola said, because the fees to set up the project would be too costly.

Angarola said that the time consumed in preparing the certificates is also a consideration, because school officials must negotiate with banks and lawyers. However, under the joint venture, the county Office of Education handled all the negotiations.

Other districts and colleges involved in the program are Castaic Union District, Lowell Joint School District, Newhall Elementary School District, South Bay Union High School District, Sulphur Springs Union Elementary School District, William S. Hart Union High School District, El Camino Community College and Santa Monica Community College.

Times staff writer Roy H. Campbell contributed to this story.