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 [ ARCHIVE ](https://mail.citywatchla.com/index.php?option=com_content&view=category&id=16)

#  LAUSD, iPads, and Finance 101

***![](https://mail.citywatchla.com/images/stories/Dec-2013/cw110101l.png)LA WATCHDOG***-According to [Howard Blume ](http://www.latimes.com/local/lanow/la-me-ln-ipads-back-on-agenda-20131213,0,3770028.story#axzz2neg5j5Rb%20)of The Los Angeles Times, the Los Angeles Unified School District is proposing to finance its $1 billion technology program to provide iPads to every student, teacher, and administrator with school construction bonds.

But financing three year assets such as iPads with 30 year bonds violates one of the basic rules of finance where the maturity of the bond does not exceed the useful life of the asset. This stunt would have the effect of capitalizing a true operating expense.

Written by Jack Humphreville.

December 16 2013

<a class="a2a_button_facebook"></a><a class="a2a_button_twitter"></a><a class="a2a_button_email"></a><a class="a2a_button_print"></a>[](https://www.addtoany.com/share)

***![](https://mail.citywatchla.com/images/stories/Dec-2013/cw110101l.png)LA WATCHDOG***-According to [Howard Blume ](http://www.latimes.com/local/lanow/la-me-ln-ipads-back-on-agenda-20131213,0,3770028.story#axzz2neg5j5Rb%20)of The Los Angeles Times, the Los Angeles Unified School District is proposing to finance its $1 billion technology program to provide iPads to every student, teacher, and administrator with school construction bonds.

But financing three year assets such as iPads with 30 year bonds violates one of the basic rules of finance where the maturity of the bond does not exceed the useful life of the asset. This stunt would have the effect of capitalizing a true operating expense.

In this case, there would be no collateral after the third year, implying that LAUSD is essentially running a Ponzi scheme, where future tax dollars would go to financing past operating expenses rather than educating our children.

The concept of a computer literate student body has considerable merit in our technology driven workplace and society. But LAUSD needs to develop a common sense financing plan that funds this ambitious technology program by allocating $333 million a year ($1 billion divided by three years) from its $7 billion operating budget.

As it is, LAUSD already has billions of construction debt on the books and billions more in unfunded pension liabilities and deferred maintenance. Adding billions more is not only fiscally irresponsible, but just plain DUMB.

***(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds --* [*www.recycler.com*](http://www.recycler.com/)*. He can be reached at: <lajack@gmail.com>. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)*  **-cw****

***CityWatch***

***Vol 11 Issue 101***

***Pub: Dec 17, 2013***

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