LAUSD WANTS TO BORROW $360M

By Connie Llanos, Staff Writer | LA Daily News

04/13/2010 -- Even as they face a massive budget deficit, Los Angeles Unified officials want borrow $360 million over the next two years to pay for projects, including installing solar panels at 90 schools.

But union officials question if it's the right time to spend borrowed money on things that don't directly help classrooms.

School board members today will consider a request to authorize the first set of certificates of participation - loans used by districts to fund capital projects and generally paid back from the same funds that pay for teacher salaries, textbooks and supplies - to fund the initial capital projects.

Officials say they need to borrow the money in the short term to ensure that critical projects to benefit the district in the long-term get done. The projects under consideration include the solar panels, replacing school buses and fixing an auditorium.

Some employee unions, which have been asked to approve furloughs and pay cuts to help the district make up a $640 million budget deficit, say they'll fight parts of the plan.

"I think going green is a good thing for the future," said A.J. Duffy, president of United Teachers Los Angeles.

"But the board would be criminal if it spent money on this at this particular time, and we would be fighting them on this if they approve it."

Members of UTLA, along with members of the Associated Administrators of Los Angeles, voted to approve a district furlough plan this weekend that saves the school district $140 million over the next two years and equates to a 3 percent pay cut for teachers and administrators.

District officials said many of the projects that are up for vote would have been funded by Measure Q, a $7 billion voter-approved bond passed in November of 2008.

Declining home values have stalled the district's ability to collect these bond funds, and district officials estimate that they will not begin collecting them until 2016. LAUSD Superintendent Ramon Cortines said some of these projects simply cannot wait.

"I'll take the criticism, I'll take the hit ...," Cortines said Monday. "But I'm doing what's right for the future of this system."

Some of the projects the district would fund with the loans include $38 million to replace aging school buses with new, greener and more fuel-efficient vehicles; $25 million to relocate LAUSD employees from leased buildings to downtown district-owned property; and $51 million to repair the auditorium at Garfield High School, which burned down in an arson fire.

"I don't just have to worry about academic achievement when I'm running a $12 billion business," Cortines said. "I have to worry about the infrastructure."

The district also wants to borrow $100 million to install solar panels at 90 schools district-wide.

District officials said installing the panels will allow the district to save about $5 million a year on an $85 million utility bill, and possibly more if rates increase.

"The cost of energy has gone up and so the return on this investment has become much more favorable to public agencies," said James Sohn, LAUSD's interim chief of facilities.

Sohn also said the massive installation, the largest to date for the district, would help LAUSD maintain its goal of producing 4 to 5 megawatts of solar energy annually by the end of this year.

Megan Reilly, LAUSD's chief financial officer, also stressed that payments toward these loans will not affect the district's budget until 2012.

Other union leaders also question the district's logic.

"What's the point of building new schools when there is no money to staff them? Putting in updated equipment when you're laying off the workers who will run it? Or installing solar panels when you'll have no one to clean them?" asked Adriana Salazar, a spokeswoman for Teamsters local 527, a union representing some 3,500 LAUSD workers.

"At some point someone needs to ask if the best time to implement some of these projects is right now, in this total economic downfall."