San Luis Coastal to help its top exec buy a home

December 20, 2016
Eric Prater

Eric Prater

The San Luis Coastal Unified School District is giving its superintendent a $950,000 loan to buy a home. San Luis Coastal’s school board unanimously approved the loan at a meeting last week.

However, some teachers and members of the public question whether the under rate loan is a gift of public funds at a time the district is increasing class sizes to save money.

Superintendent Eric Prater, who makes a base salary of about $215,000 and receives nearly $300,000 a year in total pay, will receive a fixed-rate, 30 year loan from the district. The loan has a 2.6  percent rate that matches the federal interest rate for long term investments for Dec. 2016.

Nevertheless, on Thursday, federal loan agency Freddie Mac issued a report stating the average 30-year fixed-rate mortgage was 4.16. The Wall Street Journal reported the average “plain-vanilla,” 30-year fixed-rate mortgage was 4.38 percent on Thursday.

Mortgage rates surged by .76 percentage points since Election Day, according to the Wall Street Journal report. Mortgage rates are expected to keep rising, due in part to the Federal Reserve’s decision to raise interest rates. The Fed raised the federal-funds target rate on Wednesday, just hours after the district approved Prater’s loan.

The loan will also allow Prater to avoid making a down payment on a house.

By issuing the loan, San Luis Coastal intends to guarantee Prater will remain with the district for the long-term. But, it only mandates that Prater stay with the district until June 30, 2021, and it contains an opt-out clause allowing Prater to leave before then if he pays the principal and interest within two years of his departure.

District officials say, with Diablo Canyon Power Plant due to close in 2024-2025, San Luis Coastal needs to maintain strong and stable leadership. The school board also wants to reward Prater for delivering a successful 2014 bond measure and for negotiating a $36 million settlement deal with PG&E.

San Luis Coastal will lose about $8 million a year from the Diablo Canyon closure.

Prater told other media that he had been renting, and his landlord is selling the home in which he has been living. Prater wants to own a home in the San Luis Obispo area, but he says the housing market is incredibly challenging.

In 2015, Prater received $295,064 in total compensation, according to Transparent California. His earnings significantly increased from the previous year in which he received $236,555 in total pay.

From 2014 to 2015, Prater’s base salary increased from $191,730 to $211,053. His benefits rose from $27,150 to $65,315.

Additionally, Prater regularly receives about $15,000 to $20,000 a year in money classified as “other pay.” That could include bonuses, incentive pay and car allowances.

Prater’s renegotiated contract states he is entitled to approximately $50,000 in raises and tax-deferred savings over the next five years. Prater is foregoing the money, but instead he is entitled to receive a $50,000 write-off on his mortgage, if he remains superintendent until July 2021.

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You have got to be freaking kidding me.

A guy making over 200k a year cannot find his own financing? WTF. This is shady. He didn’t just want a starter home either. 950 THOUSAND dollars buys a lot of house, even here. Why couldn’t he just be like the rest of the public servants living in “tiny homes before they were popular” ? He probably wanted some gated community home or a home on acreage. I’m not even hating on that, I just don’t understand why San Luis Coastal is loaning him the $$? Why not loan the other employees money below fair market interest?

I don’t understand why these people in positions of authority even THINK about doing something that has the appearance of impropriety.

No…it’s no joke.

This is the Governmental Industrial Complex at work folks..just sit down…shut up and pay your taxes or the Gravy Train can continue….

During the election, non stop commercials begged for school funding and depicted sad woes of our children who need basic materials due to budget cuts, like a slick feed the children ad. As soon as that money comes in, so do the pigs. The kids are literally thrown under the bus while administrators line their own greedy pockets.

Home run Diamond…

Every four years we hear again about how we have to vote for another bond or bill because the schools are out of money and “it is for the children”.

BS, this is why the state is broke. Unfunded mandates, unfunded pensions and wasteful spending by the very administrators who are trusted to do the right thing…

This is clearly the wrong thing…

Good point Fishrman,

A Jumbo loan costs more than a standard loan that I have. I believe the Jumbo loans start in the $419,000 range.

A bad fact, a career guy with nothing to show for it or someone simply scamming his employer and us, the tax payers.

What if the market tanks?

According to the Yahoo Finance site, a jumbo, 30 year fixed loan, is currently priced at 5.02%. This deal is a bad deal for the taxpayers. The average person makes around $45,000 per year in this county. Who’s helping them? Oh, that’s right, we’re paying for this guy’s loan. I’m surprised at San Luis Coastal. I expected better from them.

That’s hilarious. A superintendent of a school district making 300k plus a year.

What do you want to bet that you could take any average competent Joe at about 70k a year and put him in that position and, if you didn’t know, you’d never be able to tell by your school whether it was superstar 300k a year guy or average Joe?

Why? Because this guy isn’t building a start-up company. He’s not even trying to grow a mid-level company. The school district it already up and running. It’s already a finely oiled machine. Just sitting around maintaining the status quo is probably about as good a strategy as doing whatever it is he thinks he’s going to change.

This kind of thing makes the small business owners cringe.

Everything about this just stinks! The schools claim poverty and have cut student funding to all time lows. This superintendent makes more than senators and congress yet cries poverty. What arrogance is driving this circus to think this superintendent needs an extravagant million dollar home? If this educator cannot survive on 300,000 a year, then he is is to ignorant to be in charge of my child’s Educational direction. Why should our tax dollars, earmarked for education, be diverted for administration elitist privilege? Why in his high level, high paying position is Prater unable to secure a bank loan like every other schmuck that works twice as hard for less money? This is in your face cronyism, textbook other people’s money playbook. If Prater cannot afford a home on his salary he does not deserve to be superintendent. You can bet a new round of raises will soon follow for all school administration. As for the board members who voted to approve this farce, the public should start cleaning house as board members clearly see themselves as royalty while I see the emperors new clothes.

Eric Prater is doing a great job for San Luis Coastal, but this is ridiculous…They are apparently giving him a 30 year loan (from district funds) for $950k @ 2.6% interest…This is not even a “commercially reasonable” loan from the taxpayers perspective as 1) He is apparently being loaned the full purchase price; 2) at a rate no other taxpayer could get on a jumbo loan..The rest of us would pay 4% with points. 3) with no duty to immediately repay the loan if he quits and leaves SLO for another more lucrative job, or is terminated at some point for “cause”…With a $300k annual income he should buy a house he can afford and finance it like all the rest of us hard working citizen taxpayers do….Folks should be screaming bloody murder about the precedent this is setting for the future even if we LOVE Eric Prater.

How many teachers were given/offered similar loans? Don’t we want to attract/retain good teachers, or are administrators somehow more important than the people in the trenches doing the teaching? We all know the answer to that question. This loan highlights the corruption in the education system.

How could anyone be an effective leader after receiving such a sweetheart deal given the grave budget cuts that are coming due to the planned closing of Diablo Canyon? How could anyone be taken seriously after engineering and then accepting such a deal? In sum, how could anyone be so naive and obtuse? Does it boil down to a feeling of entitlement?

This man already makes good money. How come he isn’t able to purchase a suitable house on his own? Finally, why does he need a home that costs $950K? Yeah, I know, SLO prices aren’t what they used to be. If he’s going to do that on his own, then it’s his private business. When he does it using taxpayer dollars, he opens himself up to doubt and ridicule.

This was an incredibly bad move. Shame on Prater and on the school board.

“Finally, why does he need a home that costs $950K?”

Because Eric Prater wants to keep living at the SLO Country Club and not somewhere like North Morro Bay, Baywood, or Laguna Lake with the rest of us Hoi Polloi.

Dr. Prater does NOT live in the country club area. I have good friends who are neighbors of his.

The voters said yes to money for everyone, ……..yippie

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