Costa Mesa : School District Asks City to Consider Loan

City officials said they will meet with trustees of the Newport-Mesa Unified School District later this month to discuss extending a loan to the cash-strapped agency.

Mayor Joe Erickson said he was approached by Judith A. Franco, president of the school board, who asked that the city consider making a bridge loan to the school district to help it make payments, due June 13, to its bondholders.

Erickson said that the city, however, has made no commitment to helping out the financially troubled school district. “I want to know if it would be feasible for us to help,” he said at Monday’s council meeting.

The plea came after Orange County officials notified investors in the county investment pool, which collapsed last December, that part of the money to have been returned to them by June 5 would be delayed.

Under a settlement agreement, the district is supposed to have $60 million of its $80-million investment in the failed pool returned by the end of May. Another $11 million was promised in recovery notes by June 5.

Now that latter amount will not be available until after June 16, district officials said, meaning that they will not be able to make a $47-million payment to bondholders or meet other financial obligations.

The school district is researching several options to help it meet the June 13 deadline. Spokeswoman Nadine Wilck said the district has asked its major note holder to extend the deadline. Trustees have also approached officials of the Irvine Ranch Water District to see if that agency will give them a loan.

Erickson said the meeting with school district trustees will also be attended by Newport Beach Mayor John W. Hedges, who might also be asked to lend the schools a hand.