Financing for the School Board’s proposed Measure CC is quite different from Measure T, the $40M bond we passed back in 1996.
Door-To-Door Persuasion
In the next few weeks, when neighborhood bond supporters come to your door seeking your vote and support for the School Board’s $106M Measure CC bond, don’t be shy about asking questions.
Ask them how much the bond will cost the community. They probably will say it’s hard to tell without knowing the actual interest rate at the time a bond is sold.
Ask them what it would cost if the interest rate were 5 percent. They probably will answer that it’s hard to know without having the bond’s actual tax rate, which will be set by the Board if it passes.
Ask them, if the tax rate was $60 per $100K at 5 percent, what the cost would be, the community’s bottom line? They probably will hem and haw, saying it’s too hard to know the final cost to the community due to the future changes in our assessed valuations.
Infomercials
Will the Measure CC bond election committee just be an extension of the School Board? Will it be giving out all the facts so the voters can make a well-informed decision? Or will members hand out the same limited, well-polished infomercial we are starting to hear about town?
If this committee’s door-to-door sales force isn't convincing neighbors to support the bond based on limited financial facts, will they try to pull at the homeowners’ heartstrings in order to get to their purse strings?
Mortgage-like?
Earlier in the community’s bond discussion, School Board members suggested that we should look at the bond as if it were a home mortgage: The homebuyer borrows money from a lender to buy a house and agrees to pay it back over an extended period of time.
When you bought your home, did you sign a mortgage knowing that each succeeding payment would escalate in cost, but didn't know how much or the total cost of the loan? Then why should we, as a community, approve the Board’s proposed bond when it has those same terrible financial terms?
Now Capped
Even the once notoriously expensive Certificate of Appreciation Bonds (CAB) have been capped by the state Legislature to a limited ratio of not more than four times the amount of the bond.
And Where It Stops …
What we will end up paying back is yet to be determined by the future increases in our property’s county assessed valuations.
The ultimate cost of Measure CC will depend on how much those assessments go up over the next 30 years.
Fiscal Certainty Needed
The School Board should have given us a more simplistic bond like Measure T. Now there is a bond that our community clearly understood. We showed our overwhelming support by passing it by a 3:1 margin. We could see what we owed because the bond’s financing established 40 annual payments of about $2.4M. When our assessed valuation goes up, our tax rate declines accordingly, unlike Measure CC, where annual payments will be increasing most every year because of our growing annual property assessments.
Ye of Little Faith
Why didn't our School Board propose a bond that we could rally around? Instead, Board members are sending out bond supporters to convince their neighbors to support their bond measure without knowing what we are getting ourselves into.
Didn't our Board have faith in our community that it would come out and pass another Prop. 46-type bond like Measure T– even with its higher approval rating for passage?
Making Sense of It
Why would anyone want to approve the $106M Measure CC bond when there is no way of telling what its ultimate cost will be to our small community?
Measure CC is not a good fit for our community. If it passes, we will be saddled with all its unknown financial consequences over the next 30 years.
Back to the Drawing Board
Make our elected officials bring back a better financed bond to our community, one that they should have given us in the first place, a bond with a simpler, straight-forward repayment plan that our community can understand and rally behind.
Just say No to Measure CC.
Mr. Laase may be contacted at GMLaase@aol.com
