School Districts, Colleges Pool Resources : Bellflower Sees Funds in Joint Venture

Bellflower Unified School District plans to tackle its $5-million equipment and maintenance problem by borrowing $780,000 this fall under a business venture with seven other school districts and three community colleges.

“Our school district needs about $5 million to handle our equipment problems--lack of furniture, horrible classrooms and things like that,” said Michael O’Bric, assistant superintendent of business services. “Getting this money will be a start at handling some of the serious problems we have.”

The district is entering into a cooperative program sponsored by the Los Angeles County Board of Education in which participants will issue joint certificates of participation, similar to tax-exempt bonds, to raise about $14 million for construction and maintenance projects.

Portable Classrooms Sought

Bellflower, the only district in the Southeast area involved in the project, will use part of the $780,000 to buy furniture and five portable classrooms for its seven elementary schools, two high schools, one continuation high school, an adult education school and a child care school, O’Bric said.

The district also plans to repair bleachers, purchase furniture, copiers and musical instruments, and to replace 90 heaters.

“They (the heaters) just aren’t safe, and we’ve found it very difficult to find parts because they’re not being manufactured anymore,” O’Bric said. “That’s just one example of what happens when you have schools that are 35 or 40 years old.”

Joint Venture a First

The joint venture is the first of its kind in the county, said Deborah L. Simons, assistant director of regional business services for the Los Angeles County Office of Education.

“This concept allows school districts to act together in a cost-effective way,” she said.

The districts save money by pooling resources for insurance, paper work, legal advice and other services needed to issue the certificates.

Simons said 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.

Effort to Save Money

The county education office 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.

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 primarily small school districts that wanted to borrow less than $1.5 million, county Finance Officer Kathleen Snook said.

“The list is not cast in cement,” she said. “Some may drop out, and others may come in before we sign with the underwriter next month.”

Considered a Good Buy

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

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.

O’Bric said Bellflower plans to repay the loan at about $100,000 per year through the income it receives from the state. He said additional funds needed for equipment and repairs will come from both the state and the school district.

“We have a five-year plan that will handle about three-quarters of our needs,” O’Bric said.

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

Lowell Joint School District in Whittier has dropped out of the program, Snook said.

(Times staff writers Roy H. Campbell and Rod Lazo contributed to this story.)