Arizona lawmaker raises questions about legality of Isaac School District lease-purchase deal

PHOENIX – An Arizona lawmaker is questioning the legality of the lease-purchase deal that bailed the Isaac School District out of its financial crisis last month.

The Tolleson Union High School District agreed to buy Isaac Middle School for $25 million and lease it back to the Isaac School District, providing the troubled west Phoenix district with a financial lifeline after its teachers worked without pay for three days.

However, Republican state Rep. Matt Gress, chairman of the House Education Committee, isn’t convinced the unusual arrangement is legal.

“This agreement raises glaring legal and financial red flags,” Gress, chairman of the House Education Committee, said in a press release on Monday. “The Isaac School District has a long history of financial mismanagement, and now it’s relying on a last-minute bailout that may not even be legal.”

The Arizona Attorney General’s Office reviewed the deal and had no objections, according to an Arizona Republic report, but Gress wants more information about how that decision was reached.

In fact, Gress sent a letter to Attorney General Kris Mayes on Friday with a list of detailed questions about the review process.

Gress wonders how Isaac School District can make payments

In addition seeking clarification on specific legal matters, he wants to know if state attorneys considered Isaac’s ability to meet the lease deal’s payment schedule of nearly $3 million a year through 2029 and almost $19 million in January 2030.

Isaac, which consists of 12 elementary schools in west Phoenix, was placed under a receivership in January after reportedly accumulating negative cash balances in the $20 million range.

Gress, who said the House Education Committee is conducting its own review of the situation, asked Mayes to answer his questions and provide related records by Feb. 17.

“It is a top priority for me and my colleagues in the Arizona House of Representatives to work toward a long-term solution for the gross mismanagement of the Isaac School District and to prevent this from occurring in other districts around the state. However, agreements like this one undermine those goals — especially when they are not thoroughly vetted for compliance with Arizona laws,” he wrote in his letter to Mayes.

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