PUSD granted extension to respond to critical bond report
By Steve Dreyer
The date by which the Poway Unified School District must respond to a San Diego Grand Jury investigation on the use of controversial bonds to finance school construction has been extended to Sept. 17.
A spokeswoman for the jury said the extension, from the original due date of Aug. 20, was granted by the presiding judge of the San Diego Superior Court. A similar request from the Julian Unified School District was also approved. The remaining 45 school districts in the county all submitted their responses on time, she said.
The grand jury’s report, released in late May, called for “countywide school bond reform.” Those reforms should include “greater citizen oversight of bond requirements and increased transparency of total bond costs and future outlays,” the report said.
The Poway district has come under extensive public criticism for proceeding with a $105 million CAB that will eventually cost nearly $1 billion over the next 40 years. The voter-approved bonds were used to complete renovations at several PUSD campuses. However, district taxpayers will not begin paying on the bonds for 20 years, until after previously approved construction bonds are retired. As the grand jury report notes, the payoff ratio of the CABs is over 9 to 1.
The report notes that hundreds of California school and community college districts, including 44 in San Diego County, have financed construction with CABs and that three in the county have payoff ratios higher than the PUSD’s 9:1 — Santee School District, 16:1; San Ysidro School District, 14:1 and Southwestern Community College District, 11:1.
The report’s overall tone regarding the use of CABs by school districts was very critical, with the grand jury endorsing most of the reform proposals advanced earlier this year by county Treasurer-Tax Collector Dan McAllister. These included:
• Reducing from 40 to 25 years the maturity time for bonds issued;
• Reducing the maximum allowable interest rate from 12 percent to 8 percent;
• Including a callable feature (the ability to refinance) in all debt issuances. The PUSD bonds are not callable.
• Establish a “prudent” debt service ratio not to exceed 4:1.
Under the law, all 47 school districts in the county are to respond in writing to the report. Each recommendation made by the grand jury must been addressed in the response.
