Joint Powers Deal Could Aid Irvine Schools

Council members on Tuesday will consider joining with the Irvine Ranch Water District and the Irvine Unified School District to form a joint powers authority that could lend money to the financially troubled school district if needed.

The water district and City Council had previously offered to help the district avoid bankruptcy. School board President Tom Burnham said the district might not be able to meet a $54.5-million bond payment due June 13 without securing loans because of uncertainty over the county settlement agreement.

Even if the full amount promised by the settlement plan is returned to the school district, Burnham said the district might need to borrow about $11 million to meet the June 13 bond payment.

But if the recovery notes promised as part of the agreement cannot be quickly converted to cash, Burnham said the district might need to borrow as much as $25 million to avoid bankruptcy. The district had $107 million in the investment pool when the county declared bankruptcy on Dec. 6, more than any other county school district.

The district has not requested a loan from the two agencies and school board member Mike Regele said trustees have yet to formally discuss the proposed joint powers authority.

“If we’re going to have a cash-flow problem, this could be something that we have in place to help,” Regele said.

Councilman Greg Smith, a former Irvine school board member, said the proposed arrangement was prompted by a recognition that the 21,700-student school district is a vital part of the community.

“Any part of the city that suffers affects us all,” Smith said. “I think we’ve got a real obligation to help.”