Val Verde schools sue state over funding

The Val Verde Unified School District, which has been under scrutiny for spending state bond money on locker room whirlpools, state-of-the-art athletic facilities and other luxuries, sued the state this week for allegedly providing inadequate funding for school construction and imposing regulations that discriminate against poor school districts.

“The state of California is defending a broken program,” said Supt. C. Fred Workman, speaking to reporters at the district’s Perris-based offices. “The gloves are off.... This is an issue that the state of California better face.”

The Riverside County school district has been wrangling with officials at the state’s Office of Public School Construction for several years over its spending on new school construction.

Since 1999, the district has had to follow special rules and submit to state audits because it has been classified as a state financial hardship district -- meaning the state pays up to 100% of the cost of building and modernizing its schools instead of covering just 50%, as it does for solvent districts.

The state has provided more than $340 million to the Val Verde district in state bond money for 24 projects.

But the district ran into trouble with state officials by issuing nearly $90 million in debt without voter approval to supplement state school construction funding. As a hardship district, Val Verde was not permitted to do that unless it agreed to have its state funding for new school construction cut by $90 million.

Public school construction officials have demanded that the district make that $90 million available for future projects, in effect cutting the future funding the district will receive from the state.

The district also angered some members of the State Allocation Board, which distributes state bond money for new schools, by failing to disclose all the money it was borrowing. The district said the omission in its financial paperwork was an oversight.

Workman contends that because of the rising costs of building materials and other expenses, state funding grants cover just 70% of the cost of building a new school.

“We would never have borrowed money if the grants had been adequate,” Workman said.

But state public school construction officials have said that Val Verde’s project overruns were a result of unnecessary items, including artificial turf on an athletic field, stainless-steel whirlpools in team locker rooms and 5,000-square-foot stand-alone weight rooms at some of its high schools.

The 17,000-student school district has named the governor, the state schools superintendent, the controller and members of the State Allocation Board in the lawsuit filed in Riverside County Superior Court.

In the lawsuit, Val Verde officials say there should not be special rules barring financial hardship districts from borrowing extra funds to supplement state grants.

The result of the rules, school officials contend, is that children living in poor districts will have to attend schools without libraries, multipurpose rooms and the athletic facilities available in wealthier school districts.

The school district and nine student plaintiffs, who were enlisted by district officials, allege that the regulations governing financial hardship districts are unconstitutional.

In the immediate future, Val Verde officials are seeking a reprieve from having to deduct their $90 million in borrowed money from their future state funding.

“We’re doing this on behalf of the Val Verde school district, but in truth we are doing this on behalf of all the other hardship districts, and all the other 50-50 districts who are also being cheated,” Workman said.

State Sen. Jack Scott (D-Altadena), chairman of the Senate Education Committee and a member of the State Allocation Board, said the panel had been “unusually generous” to the district and that the district should have been aware of the rules when it violated them.

“Val Verde didn’t ask us permission to overspend. They went ahead and overspent, and now they are coming back and blaming us,” Scott said. “Anyone can sue. That’s perfectly within their rights, but I wouldn’t expect us to suddenly say, ‘Oh you’re suing, therefore we’ll simply wilt and do exactly what you want us to do.’ ”

The district currently has about $137 million of debt, which is almost equivalent to its annual budget of $145 million. As a result of the controversy and admonitions from the Riverside County Office of Education that their debt is too high, school officials recently decided to begin paying back about $40 million that had yet to be spent.

School officials said that about $86.2 million of that borrowed money is needed to cover an expected shortfall in state grants on 10 schools that the district hopes to build before 2010.

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maeve.reston@latimes.com