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Commentary: Warnings ignored for years on ‘lease-leaseback’

LA School Report | August 31, 2015

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Sacramento Bee

By Dan Walters

California’s public schools saw an enormous enrollment surge during the 1950s from the post-World War II baby boom.

It overwhelmed many school districts’ capacities to build new facilities, and one response, enacted in 1957, was called “lease-leaseback.”

The law authorized a district to lease a school site to a contractor for a token amount. The contractor would build the school and then lease it back to the district for up to 40 years, after which ownership would revert to the district.

One feature was that a school contractor/lessor could be chosen without competitive bidding, which may have been a fatal flaw.

It became a much used – or misused – way for school boards and administrators to build facilities without going through the messy process of asking voters to approve bonds and therefore tax themselves.

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