During the earlier fact-finding phase, interested community members were shown how our Measure T (a Prop. 46-structured bond) repayment schedule was set up. It was compared with the estimated repayment structure of the School Board’s proposed $106M Prop. 39-type bond, Measure CC, which is on the June 3 ballot. At no time were we shown a side-by-side comparison of how a $106M Prop. 46-type bond would compare with the School Board’s proposed $106M Prop. 39-type bond. Why?
Cost Comparison
I was asked to speak on Measure CC at the Culver City Democratic Club’s monthly meeting Wednesday night. After the School District’s presentation, I asked the District panel why the Board chose to do a Prop. 39-type bond rather than a Prop. 46.
Board member Dr. Steve Levin, speaking only for himself, talked about Prop. 13 restrictions; how a Prop. 39 bond mandated the use of an oversight committee. He also gave other reasons why it is a “more reasonable option.” He forgot to mention that even though oversight was not mandated for our earlier passed bond, Measure T, School Board members formed a public committee to oversee its spending.
Although Dr. Levin spoke positively of their proposed bond measure, I did not hear that their Prop. 39-styled Measure CC bond was the least expensive bond option for taxpayers.
Savvy Borrowers
I asked members of the audience who among them used a long-term mortgage to purchase their homes. Fifteen people in the small audience raised their hands. Did they know what their monthly payments were, what the total cost of their loan was, before signing the contract? Most shook their heads yes. I told them that if they looked closer, there were no such payment certainties in the School Board's Measure CC payment schedule.
Suspending Common Sense
Why would Board members ask us, their neighbors, to vote for a bond that demands abandonment of the sound financial principles used when purchasing their own homes? The Board is asking us to put our community into a quarter-billion dollars worth of debt. Do we suspend Reason for 25 years just because we want to upgrade our school facilities? Why didn’t they choose a Prop. 46 -like Measure T’s stable payment structure?
Rising Rates?
Would any homeowner in his or her right mind sign up for a variable-rate home loan now, especially when it looks as if interest rates are starting to rise? That is what the School Board is asking our community to do. Measure CC shows it clearly has a built-in, annual increase in its annual payment schedule. Just how much of an increase each year, has yet to be determined. The County Assessor can and has raised the assessed valuation on our homes 2 percent almost every year since the passage of Prop. 13.
Maximizing Returns
Measure CC, with its annual increase in property valuations, is a great opportunity for bond holders to maximize their tax-free returns. Measure CC has a built-in mechanism for our community to possibly have to pay much more to bondholders over the life of the bond. How much more? It depends.
Why would our Board desert the previously community-approved, stable payments? Your guess would be as valid as mine.
Mr. Laase may be contacted at GMLaase@aol.com
