IRVINE : School District Officials See Little Legislative Relief
Legislation approved by the state Assembly on Thursday is welcome but not essential to the Irvine Unified School District’s contingency plan to secure short-term loans to prevent bankruptcy, district officials said.
The legislation, which would allow county school districts to use real estate holdings as collateral for loans, must be approved by the state Senate and signed by the governor to become law.
Sponsored by Assemblywoman Doris Allen (R-Cypress), the legislation would allow loans to fund operating costs, a practice now prohibited, and would extend the current 12-month limit on repayment.
“It would be an additional tool in very limited toolbox,” said Deputy Supt. Paul Reed, who oversees the district’s $100-million budget.
Irvine school board members voted last summer to borrow $54.5 million to make an additional investment in the county’s now-bankrupt pool. That amount comes due June 13.
Because of uncertainty over the county’s bankruptcy settlement plan, the school district may be unable pay the June bond debt without additional loans, Board President Tom Burnham said. The Irvine Ranch Water District and the City Council have offered to help prevent the 21,700-student district from going bankrupt.
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