Proposed legislation would limit future school bonds
SAN DIEGO (CNS) – A San Diego assemblyman Thursday announced plans to introduce legislation to place restrictions on the terms of school district construction bonds.
The bill by Assemblyman Ben Hueso, D-San Diego, stems from a furor over a capital appreciation bond issued by the Poway Unified School District that leaves taxpayers in that area on the hook for paying back $981 million over 40 years, in exchange for borrowing $105 million to construct school facilities.
San Diego County Treasurer-Tax Collector Dan McAllister subsequently proposed a series of reforms for construction bonds, which he sent to state and school district officials.
McAllister’s suggestions are incorporated into Hueso’s proposed legislation, which would:
• reduce the maximum maturity of a bond from 40 years to 25 years;
• drop the top interest rate from 12 percent to 8 percent;
• allow the bond to be paid off early, allowing a district to refinance;
• limit the highest debt ratio to 4-to-1; and
• require the bond to be approved by the county Board of Supervisors, county superintendent of schools or governing board of a community college district.
The bond in the Poway district, which drew heated opposition at school board meetings after the terms were revealed, has a debt ratio of over 9-to-1.
The district is also not allowed to pay off the bond early, according to McAllister.
“I will work diligently with my colleagues to pass this important piece of legislation,’’ Hueso said. “This measure has already received an overwhelming amount of bipartisan support and I plan to push it through with the help of my colleagues in Sacramento.’’
The assemblyman is expected to introduce the bill in the first week of December.
Related posts:
- School bond legislation proposed
- PUSD releases statement on school bonds
- PUSD not alone in high-interest financing
- Council to consider refinancing City Hall bonds
- PUSD hires forensic accountant to review bonds
Short URL: http://www.pomeradonews.com/?p=28822
Posted by Staff
on Sep 20 2012. Filed under Local News, Poway.
You can follow any responses to this entry through the RSS 2.0.
You can leave a response or trackback to this entry
We should bring back the 2/3 majority requirement for bond issues. If this existed the Poway bond never would have occurred.
In 2008 PUSD urged voters to approve $179M in borrowing "for the kids". With that approval PUSD borrowed $219M. THIRTY ONE MILLION more than the voters authorized. Cost to Poway taxpayers? ONE BILLION, TWO HUNDRED MILLION!
And it involves the 2009 Series A bond as well. Tell me how Mangum didn't know now. What the PUSD Board did was criminal.
http://www.voiceofsandiego.org/education/article_...
In the final analysis, the responsibility rests with the voters, who elect good people with no business background, no financial experience, who have never run anything where the term "Billion" or even "Million" is ever mentioned.
These are (generally) honorable people, over their heads and susceptible to the bladmishments of professional staff and slick bond salesmen.
They can add can't they? I'm not a rocket scientist and even I can figure out that 9 to 1 and no call is just bad management. And they all have some type of business or legal background. Look at their resumes. And the premiums – really? An extra $200 million in payoff by taxpayers because the Board was swindled in 2009 and 2010? Is that the excuse they're to use? That they're rubes or too dumb to have figured it out? That's rich.
All of the reporting thus far indicates that the PUSD Board took every legal advantage, and then stretched it just a wee-bit more. They were warned, even by the State Attorney General but took her failure to prosecute them as a green light.
That is a tendency of attorneys. They know where the legal line is and walk it like a tightrope, with the knowledge that if they slightly overstep they will get "professional courtesy," while the rest of us avoid the line with so much room to spare that if we stumble a couple of steps and fall, even our hair does not cross the legal line.
And that is a good reason never to elect an attorney to anything. As to businesspeople, running a Mom and Pop shop (and I have), is vastly different from running a multi-hundred-million dollar corporation. (Done that, too)
Elected officials rely on staff, I might add a staff that does not work for the elected officials.