Glendale Community College has joined several other school districts in a business venture that will allow the college to borrow $1.4 million to build parking lots and tennis courts and purchase a computerized library system.
The college is entering a cooperative program in which three community college districts and nine unified school districts will issue joint certificates of participation--similar to tax-exempt bonds--to raise a total of $15 million for special projects.
The joint venture is being coordinated by the Los Angeles County Office of Education, which set up the co-op and will issue the certificates this fall.
It will be the first time that such a venture has been tried in the county, said Deborah L. Simons, assistant director of regional business services of the county Office of Education.
"This concept allows school districts to act together in a cost-effective way," she said.
The districts save money by pooling resources for insurance, paper work, legal advice and other matters related to the issuing of certificates, Simons said. In addition, each district benefits by having the county Office of Education pull the venture together, rather than committing its own staff, she said.
The so-called Certificate of Participation issue has been used successfully by school districts in Ventura County and elsewhere, Simons said. Municipal governments, especially small ones, have used such programs for years to finance projects they could not support alone.
Considered a Good Buy
Investors generally consider the certificates a good buy because they offer a steady, tax-exempt interest income.
The purchaser of the certificates earns interest until the money is repaid through a bank, which acts as a trustee for each of the districts' projects. The trustee holds all rights to equipment purchased or projects built in case a district defaults on the principal.
Each district has submitted a proposal for its projects and the amount of money needed.
Santa Monica Community College, for example, plans to borrow $500,000 to buy computers. Bellflower Unified School District has submitted a request for $650,000 for computers, portable classrooms, fencing, bleachers and other items.
The $1.4 million that Glendale College plans to borrow must be repaid over the next 10 years. The bulk of the money will be used to build three parking lots, which are scheduled to be completed by next summer. The lots will provide 300 new spaces, about 150 of which will be for students. The rest will be reserved for college employees, said Jean Larson, the district's business manager.
"This won't solve the parking problem, but it will alleviate it some," she said.
The rest of the borrowed money will be used to demolish three tennis courts and build six new ones, and to have the library's card catalogue and reference material computerized.
The college Board of Trustees' unanimous vote last week to enter the venture came after pressure by faculty and students for the board to add parking on a campus where 6,000 day students and 5,000 night students compete for about 1,200 spaces in city-owned lots.
Those who can't find spaces on the campus often park in residential areas, prompting complaints by neighbors, or in handicapped spaces or no-parking zones.
Pressure increased last month when school officials announced that a student security force would soon be authorized to issue traffic tickets to illegal parkers.
Sale of Land in Question
The college had planned to finance more parking with part of $1.5 million that it expected to earn from a sale of college-owned land. But the funding fell through when the developer who submitted a bid for the land indicated that he might not go through with the purchase.
The college says it accepted the bid and has threatened to sue the developer, Robert R. Hensler, unless he pays for the land. Hensler had planned to build a housing project in the San Rafael Hills, but now says the project has run into financial problems.
Larson said that, if Hensler does decide to pay for the tract, the money will be used to repay the loan.