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School Board Approves $55 Million in Bonds

Also Gives Green Light to Priority Maintenance and Repairs


Thursday, May 9, 2013
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After submitting their financial advisors to an inquisition, the Santa Barbara school board approved the issuance of $55 million worth of bonds on Tuesday night. What would normally have been a pro forma decision turned into a multi-meeting discussion due to a confluence of events including intense public scrutiny the last few months of capital appreciation bonds (CABs). Because they don’t have to be paid off for decades, these bonds allow districts to limit tax rates, but they accrue gargantuan amounts of interest.

At a board meeting last month, Trustee Ed Heron delivered a peroration in which he read from several documents ​— ​emails with the district’s former business manager, campaign literature from 2010 Bond Measures Q and R, and newspaper editorials (including one he wrote) ​— ​promising taxpayers that rates would not increase. Heron, who also said he would not approve a financing scheme involving CABs, was concerned about the moral implications of ignoring those promises. It turns out, however, that without CABs, and with the real estate market having nosedived, it is impossible to sell more bonds without raising tax rates.

Other trustees pointed out that tax rates depend on some factors that a school board cannot control and that, furthermore, they also made promises to the community to repair and upgrade schools. Parents from Washington and Adams elementary schools, who have been waiting for years for new libraries, showed up to the last board meeting to make that point. In the end, Heron did not oppose the new bond sales, but he did say, “I just need to apologize to all of the supporters of the bond issue in 2010.” The board voted unanimously to sell $35 million worth of bonds for secondary schools and $20 million for elementary schools, all traditional current interest bonds.

The board also approved a list of priority projects based on discussions with principals and an audit of the system’s facilities by consulting firm Telacu. They include items like fire-alarm replacement at Monroe Elementary School and roof repairs at secondary schools. They also include the libraries. According to the Telacu report, the district’s needs total nearly $300 million.

Comments

Independent Discussion Guidelines

Apology is not enough ...
I will never vote for a School bond again.
Shameful.

loneranger (anonymous profile)
May 9, 2013 at 9:10 p.m. (Suggest removal)

Why is money wasted on outside consulting firms? Why don't they just ask the teachers, custodians and staff? Many of the problems are obvious and have been complained about for years.

Ken_Volok (anonymous profile)
May 9, 2013 at 11:56 p.m. (Suggest removal)

Ken, about 20 years ago my dad and some other civic-minded folks formed an ad hoc group call the A.P.S. (Alameda Padre Serra) Bandits. They wanted to fix the but trolly on top of A.P.S. They estimated the cost to be $800.

The City of Santa Barbara stepped in and slapped a notice on the trolly stop saying (if I remember correctly) "under penalty of prosecution, no further work will be done at this location". Then, the City gave the project over to Towbes construction--for a fee lf $10,000.

Remember Ken, NEVER question any expenditure, especially if it's being done in the interests of "the children".

billclausen (anonymous profile)
May 10, 2013 at 2:28 a.m. (Suggest removal)

The voters said NO to the first bond request that would increase the tax amount. The school board 'lowered' the amount to be what the current tax was and got it approved the second time, or so we thought.

Tricked fair and square comes to mind.
Followed by...
Trick me once shame on you.. Trick me twice shame on me.

The voters said NO to higher tax and the school board decided to trick us into paying more.

A better idea would be to spend the money as it comes in with no interest paid. With the current scenario you will run out of money years before the bond is paid off and be crying for more...
NO, NO, NO..

loneranger (anonymous profile)
May 12, 2013 at 9:43 a.m. (Suggest removal)

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