Bad News Bond

Bureaucrats at the Santa Ynez High School are pushing to add $40 million more in debt payments onto local taxpayers, via . Rather than give you a balanced view of the facts about Measure L2012, the school district decided instead to mail slick brochures to convince you to vote for the higher new taxes.

Elections Department official reports show money being funneled through a so-called “citizens committee” which is actually headed up by school administrators. There are no Valley citizens whatsoever listed on the reports. What the reports do show is that the contributors are exclusively corporations and vendors who do business with the school district and stand to profit handsomely from the bond issue.

For example, the architect from Fresno gave $7,500 and the bond finance attorney from San Francisco wrote a check for $6,000 in an attempt to get you to vote for this bad news bond. Just the bond financing costs alone are expected to be over two-million dollars once the interest if figured in – every penny of it paid by you the taxpayer to big-city, high-priced consultants and Wall Street bankers.

We are all for the kids, and many of us have given a lot, but this new tax scheme is not something for the kids. Instead, it’s a get-rich scheme for others who do not even live here. Worse, it’s way too much spending on non-critical items and lacks plans, bids, and proposals for public review. Vote No on Measure L.

P.S. About the $40 million total: Getting numbers from the school district about total costs with interest figured in, and financing costs for selling the bonds, has proved to be impossible. Public records act requests for bond financing information come back as “Not Available,” which by the way is not in accordance with the law. If they have the documents, they have to provide them. (Another person asked for bond-project information in August, and was told it would be available on November 1st. Hardly a “prompt” response by the school.)

The Impartial Analysis by County Counsel in the voters sample pamphlet says up to 40 years on the bonds. The tax-rate statement in the voters sample ballot says the sale of the bonds will be spread out over 6 to 7 years. If they are 30-year bonds, that would make 37 years of debt. I have asked about term of this debt at their meetings, but they will not answer. So I have had to make some reasonable calculations.

The bond is for almost $20 million, and the bonds are likely somewhere between 30 and 40 years. At projected rates of, say, 4.25% for this kind of bond, that works out to paying about $40 million over 35 years. Basically, the interest costs are double the amount of the bond. Put another way, for every one dollar borrowed, two dollars are paid back. Even if the interest rate is a bit lower, or the bond term a bit shorter, we are still in the $35-$40 million range. Far more, obviously, than the $19.8 million “face value” of the loan.

Again, I have asked the school for any estimates; nothing was given out. – Kevin