After making loan payments to the state for 21 years, the West Contra Costa Unified School District is now paid in full. Back in 1991, it was the first district in California to be taken over by the state before nearly going bankrupt and many believe it was the first in the nation to be taken over. Back then, it was called the Richmond Unified School District and no one had ever heard of a school district having a $29 million budget deficit.
Free and clear, West Contra Costa Unified made its last payment to the state ending 21 years of receivership. This means the district will now have an extra $1.4 million a year that would otherwise have gone to repay the loan. "What it'll help us to do is to do is not make cutbacks that we otherwise would have made. So, there's a number of teachers who're going to have jobs as a result of that that would have been laid off otherwise and class sizes would have been larger," Superintendent Bruce Harter said.
The district first got into trouble more than two decades ago. "We did not budget properly. We had more obligations than we could afford and the state cut revenue," California Board of Education President Charles Ramsey explained. The financial situation was so bad, the entire district and its schools planned to close and declare bankruptcy. That's when parents led by Tom Butt sued California. "We prevailed and the state was ordered to open the schools back up and complete the school year," he said.
California had to lend the district $29 million, but the interest rate on the loan was so high, 5.7 percent, the district continued to struggle financially. That's when Wendy Gonzalez, a first-year teacher marched to Sacramento with others and went on a hunger strike demanding the loan be refinanced. The Legislature voted to lower the interest rate. "It feels great, especially with the kids out here because that's who we really did this for. It's kind of a relief," she said back in 2004.
Currently, there are three school districts in California that are under control of the state: King City near Salinas, Vallejo, and Oakland. Richmond is now scratched off the list.