June 4th, 2012
10:45 AM ET

Once bankrupt school district now debt-free

by John Martin, CNN

(CNN) - An eight million dollar payment made on Friday means an end to more than decades of debt for a California school district. The lump sum was the last of about $47 million West Contra Costa Unified School District paid to California for a loan taken out more than two decades ago.

School officials admit that financial mismanagement led to bankruptcy 21 years ago. "We did not budget properly. We have more obligations than we could afford and the state cut revenue," school board president Charles Ramsey said.

The district, then known as the Richmond School District, threatened to close six weeks before the end of the 1991 school year. A lawsuit filed by Richmond parents forced the state to loan the district $29 million and kept the schools open.

A relatively high interest rate added about $18 million to the district's debt over the life of the loan.

The state agreed to lower the interest rate in 2004 after teachers marched on Sacramento and held a hunger strike.

School officials say the interest rate reduction, cuts in salaries and school programs, and sales of school property led to the district paying off the loan four years early. Officials expect to see a $1.4 million savings this year because of the retired debt.

West Contra Costa superintendent Bruce Harter said, "What it will help with is to do is not make cutbacks that we other wise would have made. So there are a number of teachers who will have jobs that would have been laid off otherwise and class sizes would have been larger."

Teacher Wendy Gonzalez, who helped organize the 2004 march and hunger strike, hopes the budget surplus will have an impact on classrooms. After Friday's ceremony, Gonzalez told students and co-workers that she would like to see West Contra Costa have "things that other school districts have and ours doesn't," including lower class sizes and technology improvements.

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  1. EVN

    The comments blaming Obama for the school's bankruptcy some 24 years ago just highlight the problem with America. We have far too many downright stupid people. Taxpayers somewhere wasted tax dollars on sending those morons to school.

    June 5, 2012 at 9:13 pm |
    • Beth

      Amen!

      June 5, 2012 at 9:23 pm |
  2. hamsta

    @ buckauthority no need for me to answer your question you answered it yourself. you are so stuck on this republican vs. democrat thing that you fail to realize obamas policies are the same as walter mark – spend money we dont have on crap that doesnt work until we are bankrupt while talking about how great he is and blaming everyone else. do you have any more redundant questions? i think i will borrow a line from will smith and tell you that you are the dumbest smart person i have ever met. it is you who is trying to put a square peg in a round hole by continuing to support obama after it has become quite obvious he is a complete failure(that is unless he is intentionally destroying america. in that case he is a smashing success.).

    June 5, 2012 at 8:45 am |
    • tannim

      "spend money we dont have on crap that doesnt work until we are bankrupt while talking about how great he is and blaming everyone else."

      Almost, but very good.

      Try:

      "spend money we dont have on crap WE DON'T NEED that doesnt work until we are bankrupt while talking about how great he is and blaming everyone else."

      That's both sides of the aisle. They all stink. Vote 'em all out.

      June 5, 2012 at 10:12 am |
  3. true conservative independent

    Why must we be so extreme..? We MUST have social programs! BUT...We MUST ..... repeat MUST have oversight that will make sure that those in need get help (not for life but until they do the required steps to recover) and others can't take advantage of it. My goodness, we can' t let kids die of hunger ( healthy adults NEED to work). After and before school programs are OK but teach them during this time.....help with homework.......be a role model!!!! Not just kid-sitting.... We can't remove all illegals, IT IS IMPOSSIBLE, We CAN'T give free citizenship to law breakers either!!!!! We must fix the problem and compromise! Stop drinking Kool-Aid!!!!! Obama's policies are killing us and Congress (BOTH SIDES) are killing us!!!!! I will vote Romney, Obama had his chance, the change I wanted did not happen. I will vote Romney out in 4 yrs if he does the sametype of job!!!!

    June 4, 2012 at 7:45 pm |
    • John

      Yikes!

      June 4, 2012 at 8:49 pm |
    • tannim

      Anyone who spouts the "think of the children!" hysterics is NOT a "true conservative independent".

      June 5, 2012 at 10:13 am |
  4. hamsta

    just shows the world why obamanomics will only result in failure.

    June 4, 2012 at 6:43 pm |
    • The_Mick

      I think you just showed the world you didn't bother reading the article.

      June 4, 2012 at 8:06 pm |
    • BuckAuthority

      That's ridiculous, hamster.

      Why don't you tell us exactly what Obama's economic policies today have to do with a California school district going bankrupt 20 years ago and having its debt problems exacerbated by being charged a usurious rate of interest under a Republican governor?

      While you are at it, why don't you tell us all why "obamanomics" (as you so mundanely term) is responsible today for the Richmond Unified School Board hiring a Superintendent 24 years ago who was already a proven train wreck in previous districts? His name is (was?) Walter Marks and he is the person who single-handedly spent the district into bankruptcy on toys and gadgets and computers (back when they were a relatively new classroom item), outlandish computer maintenance contracts, cadres of computer techs, myriad consultants and trainers, district-wide computer systems that cost millions and never worked, costing millions to try to repair?

      In case you are interested, when Walter Marks fled Richmond after wreaking havoc and letting loose the dogs of war, he was hired immediately by the Kansas City public school system and forthwith sent it into bankruptcy.

      So, how is all that the fault of Barack Obama?....or are you just practicing your skill of putting square pegs into round holes?

      June 5, 2012 at 2:01 am |
      • Matt

        It is not Obama personally but "his" groups mentality. Progressive Lib's think spending spending spending will fix everything. They don't know how to raise money just spending. They are poor managers and work off other people money. This is a problem for the whole state.

        June 5, 2012 at 8:52 am |
  5. hamsta

    @not an illegal and not on welfare i think you just reiterated fed ups point. you should have thought about all of that before having children. i know i did and highly suspect fed up did also. having children is a privelege that is earned by picking a good mate.

    June 4, 2012 at 6:20 pm |
    • BuckAuthority

      I'm sure the male praying mantis agrees with you on picking the right mate.

      So, are you suggesting that you get to do the picking of the "right mate?" Does he have any say in whether he wants to be your mate?

      Are you also saying that part of picking the right mate for 'not on welfare' includes the requirement you be able to see into the future and not have kids today if your spouse is going to leave you in 11 years with three kids and not pay support?

      Do you have that kind of omniscience, ofal?

      June 5, 2012 at 1:38 am |
  6. Dorkus

    Close the public schools! How many more times do I need to point out that public education is SOCIALISM!?!?!?!?!?!?

    June 4, 2012 at 6:05 pm |
    • You Are Well Named Dorkus

      That's right! And disband the army it's socialism! Destroy the US highway system it's socialism! Federal Court system? Thats right Socialism! When i pay taxes to build that bridge 2 counties away that I will never drive on? SOCIALISM!! As a matter of fact, any time people get together and do anything for the good of all ..... SOCIALISM!!! HEY ... GET OFF MY LAWN YOU CRAZY KIDS!!! THIS ISN"T RUSSIA GOSH DARN IT !!!!

      June 4, 2012 at 7:06 pm |
      • max3333444555

        you over-simplify to try to make a point, and fail.

        fiscal conservatives dont say "dont spend any money" on programs. what we say is to ask the question "do we really need to spend this money? whats the impact in the future? are my assumptions correct?". this does not happen from either party currently.

        i look at the massive penetration of our social programs in this country and see a huge fail. the safety net is not a safety net when everyone is in it. the assumptions made over the decades have proven false.

        June 6, 2012 at 8:56 am |
  7. Fed Up

    This should be the norm, not the exception. There are plenty of other California school districts that can learn from this – the ones that spent over $13M on a faculty lounge and wellness center on site – really? School districts across the country need to learn to live within their means. It's already bad enough that my taxes pay for two meals out of the day for kids who probably won't see the tenth grade.

    June 4, 2012 at 3:23 pm |
    • Pjw751

      How can you equate putting food in the mouths of hungry children to a overblown lounge for teachers? Hungry kids don't learn and we as a country should see to it that all of our children are fed and taught. This country is slipping to a third world Level in the education of our children. Our children are the future! Feed and educate them.

      June 4, 2012 at 3:48 pm |
      • Fed Up

        It's not my responsibility to feed children that are not mine – my taxes already pay for bloated school expenses. You're advocating feeding all of those illegals who show up at schools? Or, the welfare mothers who cannot find a job but certainly can find the time to spend on their backs and create more children they cannot afford. It's time for people to manage and pay for their own lives.

        June 4, 2012 at 4:03 pm |
      • tannim

        Pjw751, that starts at home with the parents teaching their kids instead of abdicating that responsibility to the public schools, and with cutting taxes so that both parents don't have to work multiple jobs to make ends meet while raising latchkey kids.

        June 5, 2012 at 10:20 am |
    • Not on welfare and not illegal

      directed to Fed up...I am not an illegal and I am not collecting welfare. I am a single parent who left an abusive drug addict husband in hopes of providing a better life for our children(five) I work two three jobs at any given time and sincerly if it weren't for the free breakfast and lunch programs there would be times when my children would not have anything to eat...so although I understand not wanting to give a free lunch to those that don't deserve it on behalf of all...Thank you!!!!!!

      June 4, 2012 at 5:58 pm |
      • John

        The problem is that as soon as people start "getting stuff". It quickly becomes in their minds something they deserve forever.

        June 4, 2012 at 8:51 pm |
      • BuckAuthority

        Very eloquently stated. I'm pleased my tax dollars go for something humane like feeding the hungry.

        My last 10 years teaching (out of 20) I provided breakfast for any kid in the school who wanted it. They could have whatever they wanted as long as it was corn flakes, wheaties, or rice crispies and milk. No sugar. My pick of music.

        I'm gratified your children were able to be nourished.

        June 5, 2012 at 1:26 am |
      • elsewhere

        Even though you made bad choices, you want society to support you and others who make bad choices today. I am broke and tired of irresponsible people so go find a way on your own

        June 5, 2012 at 7:42 am |
  8. Debbie

    Did anybody notice the part about getting a LOAN in order to not shut the schools down permanently?
    I'm all for balancing the budget and stopping wasteful spending, but there was a bit of sanity is LOANING them them money to stay open and, therefore, getting everything paid off.
    What bugs me is that there are so many people that just want everything to fail.

    June 4, 2012 at 3:00 pm |
  9. LinSea

    Wait, you mean to say that cutting back on spending, sticking to your budget and operating within your means actually DOES eliminate debt? Can they hold a special Economics summer school for Congress, President Obama, Tim Geithner and the governors of every state in the country and teach them what every high schooler learns in Economics class?? Attendance will be mandatory. Those caught playing hooky have to write "I must stop ruining my state/nation with debt" once for every citizen under their jurisdiction (for example, national leaders have to write it 330 million times).

    June 4, 2012 at 2:52 pm |
  10. Rick Springfield

    Its easy, don't spend more than you take in. Can't really teach that to governmental operations because they have had a blank check for such a long period of time. In many ways, we are still paying off FDR's new deal programs. Not all of them were like the Hoover Dam.

    June 4, 2012 at 2:31 pm |
  11. Alive and well in Texas

    Perhaps the school district and the Superintendent could teach BHO some basic economics as he has no clue.

    June 4, 2012 at 1:31 pm |
    • Dave

      That was some awesome insight. Very clever. Thank you for sharing!

      June 4, 2012 at 2:58 pm |
  12. Joel

    That Superintendent needs to run for Governor and fix California. After that run for President.

    June 4, 2012 at 1:04 pm |