I am wondering if the city officials made the School District aware of the looming cost of the Clean Water Act when School Board members were deciding on how much to borrow in fixing our schools.
In discussing on how much bond money, our local School Board failed to heed the voices of the fiscal conservatives in the community in not spending our community into a debt deeper than what we could actually afford or was absolutely necessary.
Board members decided on asking for $106M in bonds. This included financing of 12 “interest-only payments,” adding over $10M in interest to what we, the local taxpayers, had to pay off.
Bond Rating
If Measure CW passes, it will be the first step in our small community going from its historically low level of debt to owing our highest overall debt level ever–to possibly owing over $600M in principal and interest. That’s not even counting the $108M of Direct and Overlapping Governmental Debt shown in the city’s annual California Financial Report in 2015.
How Much More?
So in the past 5 years, we will have gone from having one of the lowest debt levels in L.A. County to possibly owing well over $700M in principal and interest. How will this new, much higher debt change our bond ratings? Will that increase in debt make our bond offerings look riskier to investors? How much more in higher interest will our small community have to offer investors to get them interested in buying our bonds? How much more will local taxpayers have to dole out because of this higher debt?
Give Us Taxpayers a Break
Unlike our city, the School Board is under no mandate (federal or otherwise) to spend all of $106M the community authorized it to borrow. But, the Board still could save our small community over $100M in principal and interest payments by not issuing the last $50M of authorized bonds.
Don’t Leave Home Without It
Maybe in the next local election voters should ask candidates to release their own personal credit scores so voters might glimpse how they handle their own finances. Maybe then we will see who might keep our small community out of debt better, once they get into office.
Vote No on Measure CW.
Mr. Laase may be contacted at GMLaase@aol.com
6 Comments on “Our Biggest Community Debt Ever”
“Maybe in the next local election voters should ask candidates to release their own personal credit scores so voters might glimpse how they handle their own finances. Maybe then we will see who might keep our small community out of debt better, once they get into office.” This, along with voting “No” on Measure CW, is an excellent idea. The Los Angeles Times once wrote that a recently former City Council member failed to pay taxes for many years, had a $550,000 tax lien on his house and did not even recall the credit card on which he had a $20,000 negative balance.
I am not sure why you think Measure CW will lead to additional debt. In fact it was structured specifically to avoid debt as projects will be funded along the way with the estimated $2 million being raised on an annual basis. Culver City’s Bond rating remains healthy and I am in full support of any bond measure that invests in our schools and our children. I do not see how you would oppose fixing our schools, it just simply baffles me. So Yes on CW. It is the only responsible thing we can do as a City.
Ms Lara– Do you really think we’re going to build a $190M Clean Water project by just paying $2 million dollars each year? By those figures, it would take 95 years to finish building the project–and that’s without taking-in the cost of inflation.
Measure CW has nothing to do with the local funding of our schools. You can be against CW, and still be in support our schools.
That is the point of CW. Culver City cannot possibly pay for necessary measures to meet the Federal Requirements. The $2 million per year is Culver City’s way of chipping away at an overwhelming issue. Wouldn’t you rather deal with the issue head on versus trying to ignore it by voting no to CW. Yes on CW is responsible and you have not offered an alternative to pay for the $190mm you reference. With respect to your last point you brought up in your original post the following of:
“heed[ing] the voices of the fiscal conservatives in the community in not spending our community into a debt deeper than what we could actually afford” so you mixed up the two issues when you referenced the school bond measure. So lets invest in a better environment and lets not sit on our hands waiting for the perfect solution. Chances are we will not find the perfect solution but we can at least do something about it.
Ms Lara– …and what will you say when the city council borrows about $40 million dollars and uses the $2 million to pay the annual principle and interest on the bonds. About mixing debt… Culver City is one of only four communities in the state which has the same (congruent) boundaries. So the same taxpayers pay whether the debt comes from the school district or the city. So, what one entity borrows really does have an effect the other.
Once again, you need to understand the purpose of CW and what is written. It is meant to fund projects as they come up. The $2 million will be used to pay for projects that clean the runoff to Ballona Creek and I do not see how you can oppose something that cleans the environment. I don’t see anything in the measure suggesting the issuance of a bond in the future so please stop from making inferences and rely on the facts and what is written. With respect to your continued opposition to debt, which CW is not, I am in full support of debt if it is used to invest in our infrastructure (since it benefits us for many years into the future) and I am all in for investing in our schools and our children. Not sure how you can oppose either.