Accreditation Ruling Ahead for City College of San Francisco

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SAN FRANCISCO — The fate of the City College of San Francisco lies in the hands of a Superior Court judge who will decide whether the community college should have its accreditation revoked.

San Francisco Superior Court Judge Curtis Karnow spoke Tuesday during the trial of a lawsuit filed by City Attorney Dennis Herrera against the western regional branch of the Accrediting Commission for Community and Junior Colleges.

The lawsuit claims that the agency violated the state's Unfair Competition Law by using illegal and unfair procedures when it made the decision to terminate the college's accreditation.

Karnow said he would issue a written ruling in January on whether to overturn the agency's termination of accreditation for the college.

The agency had decided last year to revoke the City College's accreditation as of July 31, after an assessment found that the district failed to adequately address 14 recommendations concerning administrative capacity, financial resources, financial accountability, and relations with the accrediting commission.

The college has remained open after Karnow issued a preliminary injunction in January to keep the accreditation in place until the lawsuit was resolved.

The City College is part of the San Francisco Community College District, which is independent of and co-extensive with the City and County of San Francisco.

The loss of accreditation would make the district ineligible for state funding, which is approximately 60% of the district's budget. It would also prompt a major loss of students who would no longer qualify for financial aid or be able to transfer academic credits to other institutions.

"The combination of these factors would result in the closure of the district," said Moody's Investors Service, which assigns an A2 rating and negative outlook to the district's outstanding $350 million general obligation bonds.

Fitch Ratings assigns the district a BBB-plus rating, and Standard & Poor's gives an A rating. Both assign negative outlooks.

Despite concern over the district's accreditation, it is unlikely to have much of an impact on bondholders since its outstanding general obligation debt is backed by San Francisco's full faith tax pledge. The bonds are backed by the ad valorem property taxes levied by the city's treasurer, who also holds onto the funds for debt service payments.

Even if the district loses its accreditation, Moody's said it expects payment on general obligation debt to continue without interruption.

If the judge decides to overturn the termination of the college's accreditation, the commission would begin its evaluation process again. If he decides to let the termination stand, accreditation would still not immediately be revoked. The commission will decide in January whether to give the college two more years to come into compliance with all accrediting standards.

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