Aromas-San Juan Unified School District trustees voted 2-2 on a lease leaseback contract for the renovation of Anzar High School portables—meaning the plan to repair leaking roofs, deteriorated exterior walls and worn-out carpets wasn’t approved.
The lease-leaseback process came under criticism locally in recent months when the San Benito County Grand Jury recommended the San Benito High School District reexamine their use of the arrangements—which forgo the public bidding process—for construction projects. Earlier this year, a court case also called into question the Fresno Unified School District’s use of a lease-leaseback arrangement, according to media outlets.
District staff proposed repairing four of eight portables this year through a lease-leaseback agreement with Dilbeck & Sons where the district would pay a $25,000 down payment in general fund money and the remaining $47,553 would be paid with an annual interest rate of 2.5 percent.
The proposed plan would help with cash flow since the district would not take “a big hit at any particular time,” explained Superintendent Ruben Zepeda. Construction projects costing about $15,000 or more must go out for a bid, which can take three to four months and would cause the renovation work to go well into the school year when students were on campus, he said.
Trustees Jeff Hancock and Angelica Medina voted against the contract citing the project’s total costs and concerns with the lease-leaseback process. Hancock led the questioning of the lease-leaseback process.
“No matter how good the interest rate is you still pay more,” he said.
Bill Rupert, the district’s director of maintenance, operations and transportation, explained how the lease-leaseback process had been used several times for recent projects.
“This is the same thing we’ve been doing for two years,” he said. “There’s no reasons to deviate from that program. It’s worked for us.”
Hancock asked how significant the damage would be if the district held the project until next summer and went through the bidding process to set up a more traditional contract. The director of maintenance mentioned dry rot, leaking roofs and said the buildings “look bad.”
Medina was concerned about the project costs, which totaled $72,553 plus interest.
“I know those buildings need to be repaired. I just don’t know about using this kind of money now,” she said.
