By Connie Llanos, Staff Writer - LA Daily News | http://bit.ly/9VqWtC
10/20/2010 - Los Angeles Unified officials postponed a vote Tuesday on a plan to take out $320 million in loans for new capital improvement projects after a recent report raised questions about the spending plan.
District officials want to use certificates of participation, loans that fund projects and are generally repaid from the same fund that pays for salaries and supplies, to borrow money for projects including solar panel installations and relocating a police station.
Under the plan, the district would pay back at least part of the loans with reserves left over from projects funded by voter approved bonds.
A financial review by an independent company last week said spending the reserves to make payments on new loans could leave the district's building program in a deficit if unexpected costs occur, or if the state does not come through with all its promised funding due to the financial crisis.
The report by Capital Program Management, Inc., found that while district officials expect nearly $900 million in bond funds from the state, they should only count on receiving about $220 million for now.
That could force the district to dip into its general fund - used to pay for salaries, programs and supplies - to pay back future loans.
While the district technically still has billions of dollars in voter-approved bonds to build projects, most of the money has been allocated for projects and the rest is state funds that are not being released due to the economic crisis.
The district's financial staff asked the board to postpone the vote on this item, so that they could further analyze the impact it could have on the district's budget, officials said.