LAUSD borrowing $250 million to settle sex abuse claims on top of earlier half billion

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With costs mounting for alleged sexual misconduct cases, the Los Angeles school board has approved $250 million in bonds — on top of $500 million already authorized less than a year ago — to fund payouts to victims.The cost of both bond issues, including financing, is expected to be more than $1 billion, based on cost estimates provided by the district, and will be paid out of the district’s general fund over at least a decade.The gradual repayment will lessen an immediate budget strain.

The board’s unanimous action this week authorized the administration to purchase a new round of “judgment obligation bonds.” This special instrument is essentially a loan from investors that can be drawn down as needed to pay off sexual misconduct claims as they arise.The additional money is needed, said L.A.

schools Supt.Alberto Carvalho, because “we are exhausting funds available to us to satisfy sex and molestation cases that have been brought against the district, in many instances, reflecting cases that go back decades, that the district is not willing — not able — to successfully defend.“So, these multi, multimillion-dollar judgments against the district need to be satisfied, and without the judgment-obligation bonds, we would have to use general fund as cash to satisfy them,” he said.

California Newly approved job cuts at LAUSD will start at the central office but will affect schools through a reduction in services.Unions challenged the need for cuts.Carvalho explained the need for the bonds in response to a question from Karla Griego, the newest of the seven-member elected Board of Education, who appeared stunned by the dollar amounts and asked why they were necessary, what the district was doing to stop the financial hemorrhaging and whether even more claims could be expected.

The district is lobbying for legislative relief, officials told her, and more claims ...