School District Accused of Deception Over Its Plans for $300,000 Loan : Education: City funds were sought for development of a residential project. But one Simi trustee believes $225,000 of the total will cover a lawsuit settlement.

Critics on Wednesday accused Simi Valley Unified School District officials of misleading the public by promising to spend a $300,000 loan from the city to develop a plot of district-owned land.

Instead, said school Trustee Debbie Sandland, the district plans to spend $225,000 of the sum to cover the settlement of a lawsuit won by a previous developer whose plans for the land were shot down in public hearings.

“We have an obligation to be upfront with our public about how we should be spending our public money,” said Sandland on Wednesday. “Not all that [$300,000] is going to be used for developing the property. It’s my understanding that $225,000 is going to be paid back to our contingency fund.”

Added Donna Prenta, a parent activist who sits on ad-hoc committees reviewing school district issues, “They [school officials who sought the loan] misled the city.”

Supt. Mary Beth Wolford said that the trustees have not voted yet on how to spend the $300,000 loan that the city approved Monday night, nor have they even accepted the loan.

But Wolford admitted that one use for the money could be to replenish the district’s contingency fund, filling a $225,000 hole left by a settlement the city had to pay last winter.

“The board is not mismanaging money in order to need this loan,” she said. “I think it’s prudently looking at the alternatives available.”

It was Wolford who wrote the city on Sept. 25 asking for money to pay a planning firm to explore options for developing a 36-acre agricultural field on the northeast corner of Alamo Street and Tapo Canyon Road. The district is considering developing a residential project on the field, which it acquired in the 1970s for construction of a new high school.

“We would like to request an advance of $300,000 from the City,” Wolford’s letter says. “These resources will enable the District to fully explore economic development of the property without impacting our day-to-day education funds.”

But the letter does not mention the settlement.

In 1991, the district joined a partnership with CSA Real Estate Development Inc. and Lederer Development Inc., hoping to build homes and a shopping center on the land and generate millions of dollars for local schools.

After the Simi Valley City Council refused to grant a zoning change for the project, the developers sued the district in 1992 seeking $4.1 million in lost profits.

And in March, the district agreed to settle the suit for about $300,000, officials said. District officials have paid out $225,000 of the settlement and are negotiating with their insurance company over how much of the rest is covered by the district’s liability policy, Wolford said.

“The letter that Dr. Wolford wrote to the City Council was misleading,” Prenta said. “According to the letter, it was to develop the land, or for land-use studies. And what it was for was the lawsuit.”

Councilwoman Barbara Williamson refused to comment on the apparent discrepancy in the district’s plans for the $300,000 loan.

But she said that Sandland’s criticism was the first she heard about it, and that the loan was intended to help the district get the land developed.

No matter how the money is spent, the city will get possession of the land--valued at between $12 million and $14 million--if the district defaults on the loan, Williamson said.

“We’ve got it secured with a five-year note, so if anything happens, we’re covered,” she said.

Mayor Greg Stratton said that district officials mentioned the lawsuit settlement last winter in closed sessions with the City Council: The city was contemplating buying six acres of the district’s field and building a new police headquarters there.

No matter how the district manages its money, Stratton said, $300,000 is “a reasonable amount of money” to seek for development consultants, permit fees and zoning changes.

“We believe they will truly spend the $300,000 to do what they have to do,” he said. “What I’ll be miffed at is if they come back to us with an ill-thought-out, half-baked proposal because . . . they ran out of money.”