The Los Angeles school board has approved borrowing up to $500 million to settle decades-old sexual assault cases involving former students.
EdSource reports that board members approved the expenditure earlier this month without comment, agreeing to borrow up to $500 million through judgment obligation bonds; with an estimated 6.1% interest rate, the district will have to spend nearly $900 million to pay off the bonds.
The amount is likely not to be enough to settle all the claims the district district is facing under 2019 legislation, Assembly Bill 218, that allows victims of abuse by school employees to seek damages for incidents dating back to the 1970s.
This fiscal year, the district’s undisclosed number of settlement claims was roughly $302 million, district spokesperson Britt Vaughan said.
The district administration will likely ask the board to approve more borrowing next year to settle additional claims, board member Tanya Ortiz Franklin said.
School districts across California are facing similar claims allowed by Assembly Bill 218 and determining how to pay for settlements, according to a report by the state Fiscal Crisis and Management Assistance Team.
