After the School District completed its comprehensive needs assessment, it gave us an estimate on how much work was needed to be done and its cost–$165M. We also knew the other important factor in figuring out the size of a bond measure: How much our community’s assessed valuation was worth—approximately $8B.
Our $165M in needs and our $8B assessment were not financially compatible. Our needs were more than our resources could cover. Something had to give. The School Board knew that we, as a community, could not legally afford to fix everything in the needs assessment with just one mega-bond measure. They knew we didn’t have enough community valuation to legally float a $165M bond due to the state’s limitations on unified school district borrowing.
Bonding Sweet Spot
The fiscal limitations of our $8B assessed valuation along with the more stable, taxpayer-friendly level debt service sets our community’s bond sweet spot at about $72M. But our School Board decided to increase that fiscally reasonable bond amount by $34M. To fit the community to the bond’s now $106M, the consultants had to resort to using 20 separate years of interest-only payments in the four series of bonds over the first dozen years of Measure CC. With Prop. 39’s lower approval rate — 55 percent instead of two-thirds — they probably felt chances were good that they could ask for a larger bond and still get it passed by the community.
Choices
The School Board had a choice between what to prioritize: The fixing of our schools as its top priority or looking out for our community’s fiscal well-being. Board members chose to emphasize fixing our schools over staying within our means.
$13M More
When Board members made their ill-advised decision– designating the upgrading of our schools as more important — they chose the ill-fated funding structure of their bond. By choosing $106M for its bond, they set into motion a repayment schedule that had to fit the community to the bond, instead of fitting the bond to the community resources. By choosing an escalating payment schedule with early interest-only payments, they made their bond much more expensive for the community to pay off, by $13M.
When a School Board member suggests that we shouldn’t give Measure CC’s financing a second thought, it worries me. It should worry you, too. Call me fiscally old fashioned, but when the School Board calls for taxpayers to approve putting our community into a quarter-billion dollars’ worth of debt—largest in our history — we, as a community, better take a closer look, a second, a third and a fourth serious look at financing.
Cui Bono? Following the Money
Who really benefits from Measure CC’s higher amount? The consultants will make about $85,000 more in commissions. The lender/investors will be raking in an additional $13M in accelerated, tax-free payments.
What about us seemingly forgotten taxpayers? Who’s supposed to be looking out for our interests? Not the consultants. Not the lender/investors.
Open for Discussion
I have been writing about Measure CC for the last four months, ample opportunity to discuss the financing of Measure CC. Not one person from the District or the Board has engaged in a public discussion about the ill-advised financial structure. They only talk about how the schools need fixing. As if, the community still needs to be convinced.
The Long Haul
As much as supporters emphasize over and over their reasoning for voters to pass Measure CC, it is not about schools needing upgrading. They do. Voting is not about prioritizing what needs to be done. It’s not about if or how much, in dollars and cents, we love our children. Your vote is about how we want to pay for it over the next 30 years.
Ask Yourself
Ultimately, this is the question voters need to ask before voting: Is Measure CC a good fit for our small community? No one has publicly declared that Measure CC is a fiscally sound for our community. They have urged you just to vote for it.
A Teaching Moment
Let the School Board learn a lesson. Let them rethink their priorities one more time and see if they don’t bring back a more reasonably priced and better structured bond in November. Let them propose a bond that fits our community resources, that stays within our means; something the whole community can rally behind and support our schools.
Just say No to Measure CC.
Mr. Laase may be contacted at GMLaase@aol.com
