A $54.5-million bond debt that once threatened to bankrupt the Irvine Unified School District was repaid this week with help from a short-term, $5.5-million loan from the Irvine Ranch Water District.
With an interest charge of $900 a day, school district officials are hoping to repay the loan as soon as possible. But Deputy Supt. Paul Reed said he does not expect payment from the county's bankruptcy recovery notes until Monday at the earliest.
At a school board meeting on Dec. 6--the day the county declared bankruptcy--Reed warned trustees that Irvine Unified was in danger of defaulting on the loan. Without access to $107 million on deposit in the county investment pool, Reed said, the school district would be forced into bankruptcy.
Administrators crafting a financial survival plan for the district referred to the looming debt as the "900-pound gorilla."
Irvine Unified, the largest school district depositor in the county pool, still faces significant challenges for years to come. The school board has cut $2.2-million from next school year's $100-million budget and sent notices of potential layoffs to 120 teachers, 95 classified employees and 30 administrators. Reed estimates the district will spend $1.1 million a year for the next decade to finance investment pool losses.
In addition to funds from the water district loan, the district's $54.5-million debt was repaid with funds previously received from the county investment pool and $9.5 million in district reserve funds.