By Teresa Watanabe, Los Angeles Times | http://lat.ms/xvlWhv
February 29, 2012 :: The Inglewood Unified School District has received a $17.4-million short-term loan that will allow it to avert a looming bankruptcy, a district official said.
Supt. Gary McHenry said the cash infusion would eliminate any need for a state emergency loan, which would have triggered the California Department of Education to sideline the school board, fire the superintendent and take over district management until the loan is repaid. The district, hit by steep state funding cuts and the loss of 1,000 students since last year, had feared it would run out of cash by May.
"We definitely don't need" a state loan, McHenry said. "We should be OK through March of next year."
The loan, known as a tax and revenue anticipation note arranged with other needy school districts through the Los Angeles County Office of Education, was obtained from Royal Bank of Canada at about a 1% interest rate, McHenry said. The loan, which must be repaid by December, will help Inglewood pay its bills until the state provides $17.4 million in deferred funds as expected this summer.
Mel Iizuka, the county education office's director of business advisory services, called the loan "big news" for Inglewood that should keep the district afloat at least through the summer. But he said Inglewood's financial condition for the next fiscal year was still unclear.
McHenry said the district, which has 12,500 students and 18 campuses, still faces a $7-million deficit for next year.
To close the budget gap, the school board already has approved pink slips for 24 employees — all but one of them teachers — and is working with McHenry to find other extra dollars in special education, health benefits and other programs. Schools also are planning initiatives to attract new students.
Last week, state Supt. of Public Instruction Tom Torlakson announced that one-third of California students attend a school in financial jeopardy, with 127 school districts projecting possible red ink for this or the next two fiscal years. He said deep state budget cuts had created a "wide and deep" financial emergency and called for new funds for schools.