Noteworthy

San Diego Unified Adopted PLA Despite Insolvency Warning Signs

District finds way to get $1.78 billion in work for "only" $2.1 billion

The San Diego Unified School District is in big trouble financially, and the district now faces the prospect of a state takeover amid a deteriorating financial situation for one of the largest school districts in the state.

While recent changes in state education funding are being blamed for the districts poor financial condition, reports have emerged that there have been discussions within the district for at least two years concerning the potential for insolvency.

The time frame for these discussions is noteworthy because it turns out that at roughly the same time there were internal warnings about the possibility of the district becoming insolvent, the union-backed board majority voted to impose a Project Labor Agreement on $2.1 billion in new construction approved under Proposition S, passed in 2008.

As a former school board trustee, I’ve seen first-hand how powerful interests line up to pass school bonds.  Unfortunately, many districts rack up big maintenance backlogs as a result of political pressure to dump all available resources into compensation (school district employees have politically connected labor unions influencing elections, while deteriorating buildings do not).  Bonds are in turn used to borrow money to not only pay for new construction, but also for repairs which should have been paid for year to year.

To use a family analogy, a leaky roof or a backed up pipe should be repaired on the spot.  Instead, districts often let the work pile up and then take out a second mortgage to pay for it all, and put an extension on the house to boot.

Read this complete story on the Flashreport

---