Tolleson school district agrees to spend $25M on Isaac district lifeline

PHOENIX — The Tolleson and Isaac school districts on Wednesday agreed to a lease-purchase agreement that will provide Isaac with a financial lifeline amid crisis.

Tolleson will pay $25 million for Isaac Middle School before later leasing it back to the west Phoenix district, according to the proposal. Isaac reportedly has negative cash balances in the $20 million range, as the sale gives the district a chance to remain functioning and get back above water.

The TUHSD board voted four in favor with one abstaining. The Isaac board voted unanimously in favor of selling the middle school.

Isaac will have up to 12 years to pay back the total at a 6% interest rate.

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

“Isaac members, without pay, stood up for their students and for each other to get us to this agreement to keep Isaac schools open,” Arizona Education Association President and teacher at Isaac Marisol Garcia said in a statement after the resolution was passed. “While we’re encouraged by tonight’s vote, we will continue to wait for further communication from the receiver tomorrow.

“Isaac educators were told repeatedly that the crisis would never get to this point, so we’ll know it’s resolved when checks are in hand.”

How did Isaac School District find itself in financial crisis?

The State Board of Education appointed a third-party receiver to oversee the district’s operations, including finances, governance and academic programs. The Arizona board voted to intervene on Jan. 14 because Isaac overspent its budget by at least $12 million.

Mario Ventura, then the district’s superintendent, resigned and accepted full responsibility for the crisis.

“It is my hope that with my resignation the district will be allowed to move forward with clarity and renewed focus,” Ventura said during a governing board meeting on Jan. 23.

The district received recently received a smaller federal lifeline in the form of $6 million left over from $9 million in unspent and forfeited COVID funding. State Superintendent Tom Horne noted it wouldn’t come soon enough to make Isaac’s next payroll, making the lifeline from TUHSD all the more valuable.

State lawmakers seek investigation

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 on Wednesday before the deal was agreed upon.

Gress and other state lawmakers have been scrambling to keep Isaac’s 12 K-8 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.

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