Fellow West Valley school district considers lease-purchase deal to help Isaac pay its bills

PHOENIX – A proposed deal with a West Valley district apparently would allow the financially troubled Isaac School District to make payroll and pay its bills.

Under the proposal, the Tolleson Union High School District (TUHSD) would purchase Isaac School District property and lease it back to the west Phoenix district.

The Isaac School District Governing Board Meeting is scheduled to meet at 6 p.m. Wednesday to authorize the sale of Isaac Middle School.

At the same time, the TUHSD Governing Board will meet to weigh a resolution to enter into the agreement and spend up to $25 million on Isaac property.

How would deal with TUHSD help Isaac School District?

The deal would provide Isaac, which reportedly has negative cash balances in the $20 million range, with “the funds necessary to meet its payroll and other current obligations,” according to the TUHSD resolution.

“Isaac ESD has represented to the District [TUHSD] that Isaac ESD has various unencumbered school sites which may serve as collateral,” the resolution says.

TUHSD would benefit, according to the resolution, by investing “surplus unrestricted capital outlay funds at a higher rate of return than otherwise available.”

State lawmakers are monitoring the situation

Meanwhile, Republican Rep. Matt Gress, chairman of the Arizona House Education Committee, said the Legislature is evaluating the districts’ lease-purchase proposal.

“We are reviewing the legality of this agreement and will continue to monitor the situation closely,” he said in a press release.

Gress and other state lawmakers have been scrambling to keep Isaac’s 12 schools open through its financial crisis.

“We are working diligently to create a lawful solution that will allow teachers to be paid and will keep any classroom disruptions to a minimum for students, while also establishing reforms so that a similar crisis does not unfold in the future with any other school districts within the state of Arizona,” Republican Sen. David Farnsworth, chairman of the Senate Education Committee, said in the release.

Isaac School District teachers willing to work without pay

With the crisis unresolved, teachers at the west Phoenix elementary school district voted Tuesday night to continue working without pay for the time being.

“The state has promised to pay these educators what they’re owed and we’re counting on them to get us past this crisis and ensure the long-term stability of these schools,” Arizona Education Association President Marisol Garcia said in a press release.

Isaac has been on the Arizona Auditor General’s financial risk list since 2020 and was found to have negative cash balances starting in 2023.

After the State Board of Education placed the west Phoenix district under a receivership earlier this month, Superintendent Mario Ventura announced his resignation.

In another development this week, Republican leaders asked Arizona Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell to open a criminal investigation into how things got to this point.

“The district falsified financial records to cover up its failures, and now it’s scrambling for a last-minute fix to a problem of its own making,” Gress said.

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