Trustees with San Luis Coastal Unified have taken the unusual move of approving a $950,000 home loan for Superintendent Eric Prater, saying the move was intended as an incentive to keep him with the school district.
The board unanimously approved the 30-year loan at its Tuesday meeting, agreeing to an interest rate that matches the federal rate for long-term loans for December 2016, which is 2.6 percent.
Prater has been renting a home near the San Luis Obispo County Regional Airport where he lives with his wife and three children, but their landlord has decided to sell the home and they’ll need to move.
The school board president, Kathryn Eisendrath-Rogers, said Prater has been “incredibly valuable” to the district since he was hired in 2010, and the home loan will help retain him.
This is one of the most expensive places to live in the country. We’re mindful of how important it is to keep him.
Kathryn Eisendrath-Rogers, San Luis Coastal school board president
She cited his leadership efforts in helping to secure and implement Measure D, a $177 million bond measure approved by voters in 2014 to upgrade school facilities; his work to negotiate a $36 million mitigation settlement with PG&E over the anticipated closure by 2025 of Diablo Canyon nuclear power plant, which generates about $8 million in annual tax revenues for the district; and his strong focus on student achievement.
“He has a lot on his plate, and we want him to be focused on education and his day-to-day job,” Eisendrath-Rogers said. “That’s what caused us to look at other districts and what they have done. This is one of the most expensive places to live in the country. We’re mindful of how important it is to keep him.”
One of the California school districts that has offered a home loan to its superintendent is Palo Alto Unified, which provided a $1.5 million, interest-free home loan to Superintendent Glenn “Max” McGee.
Prater, who earns an annual salary of $215,000, said he has not yet found a home, but plans to look for one in San Luis Obispo or in the school district jurisdiction, which includes Morro Bay and Los Osos. The loan will kick in once he begins the purchasing process.
“My family has found a nice community to live in,” Prater said. “My kids are settled here and go to schools here in San Luis Obispo. What’s before me as a superintendent is the question of ‘Can I afford to stay here?’ Every year, I’ve been on a year-to-year lease, looking at the same situation. We negotiated pretty intensely for this scenario. I feel that it’s a fair arrangement.”
San Luis Coastal will use money from its general fund that’s typically put into the county treasury for investment that has a 1 percent return. Eisendrath-Rogers said Prater will owe $300,000 in interest on the loan, which will give the district a higher return of 2.6 percent.
Certain offers have been made to me and I swallowed hard and turned them down. But with my landlord selling, it was getting harder not to consider other options mainly because I have to take care of my family. They don’t want me wondering where I’m going to live every year.
Eric Prater, San Luis Coastal superintendent
In addition, Prater will forgo about $50,000 in salary tied to his contract with the district that runs through 2021. He also must pay back the entire loan within two years if he leaves the job.
Prater said he has received more lucrative offers, including a position that would have paid him $80,000 more in annual salary, to go to other school districts. But he would like to finish his career with San Luis Coastal Unified.
“Certain offers have been made to me and I swallowed hard and turned them down,” Prater said. “But with my landlord selling, it was getting harder not to consider other options, mainly because I have to take care of my family. They don’t want me wondering where I’m going to live every year. SLO Coastal wanted to retain me as their superintendent. I want to stay.”
The San Luis Coastal Teachers Association couldn’t be reached immediately for comment Friday about the home loan.
Nobody spoke in public comment at Tuesday’s meeting on the issue, Eisendrath-Rogers said.