A public committee formed in the spring is reviewing the district's assets as possible revenue sources. Among the properties being considered for sale or lease are the district office, the Ladera School site, and the maintenance and operations yard.

District business chief Stephen McMahon said there is a drive to eliminate the debt and "not have to make those payments year after year after year."

It is not an isolated example of financial trouble at the roughly 6,500-student district. The district's well-documented financial travails in the late 1990s and early 2000s ranged from project cost overruns to bond-money mismanagement. Early this year, former Superintendent Jerry Davis pleaded guilty to misappropriating public funds in an unrelated case.

The school district's outstanding $17 million in debt is in certificates of participation -- common but complicated, multiparty deals that put existing district assets up as security on investor-funded projects, with a nonprofit serving as middleman.

A key characteristic of such financial instruments is that they don't require a vote of the electorate. Seeking quick cash for modernization projects district officials felt couldn't wait for voters to approve a bond measure, the district in 1995 took on its first certificates to the tune of $10 million.

That money was meant to be paid back with bond funds from $47.3 million Measure A, approved later that same year. But when projects districtwide ballooned over budget, the money intended to retire the certificates also went toward modernization, leaving the district with the original debt plus millions in unfinished construction.

In 2002, $5 million more in certificates were taken on to build a new district office. Talk of closing the two-story Peck Avenue building began even as it first opened in late 2003.

Today, the district spends around $1.3 million yearly -- a little less than 3 percent of its $50 million budget -- making payments on the interest on those loans.

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