This Could Be a Cool Deal

A group of Southern California energy companies wants to make a deal with the Los Angeles Unified School District: Give us a long-term contract as your electricity providers, they say, and we will install air conditioning in 300 of the worst suffering campuses by September 1998--less than half the time planned by the LAUSD. It could be a great deal. But no one can tell from what’s on the table.

Incoming Supt. of Schools Ruben Zacarias says he would like to make the proposal work, but the devil is always in the details. And the letter pitching the deal is short on specifics.

His handling of this proposal will be a key test for Zacarias, who has promised to put district spending on a more businesslike footing. The core problem is that top school district officials, most of them trained as educators, do not have the skills and experience to do large, complex business deals on their own--witness the controversy surrounding the planned Belmont Learning Center downtown.

The air conditioning proposal comes from the Department of Water and Power and a joint venture between Los Angeles-based Pacific Enterprises, parent of the Gas Company, and San Diego-based Enova Corp., a provider of natural gas and electricity. They were encouraged to approach the school district by Mayor Riordan, a consummate deal-maker who believes strongly in private solutions to public problems, and by Steve Soboroff, the real estate developer who is the mayor’s representative on the Proposition BB oversight committee. That panel would scrutinize the deal because the cost, estimated earlier at $170 million, would be paid from the bond measure. That scrutiny is reassuring.

As part of the arrangement, the consortium has proposed that the district agree to a “long-term electric billing package.” The partners say they are perfectly willing to bid competitively on the project, and the LAUSD should figure out quickly how to do this.

This high-volume package deal could provide the fastest, cheapest way to cool off suffering students and teachers. But whether this particular deal is done or not, Zacarias and the Los Angeles School Board are on notice to develop more financial expertise. A good start would be what Zacarias has already promised--a school district business czar with real power.