Poway's School Bonds By The Numbers

Will Carless's revelation in the Voice of San Diego, Where Borrowing $105 Million Will Cost 1 Billion: Poway Schools broke on August 6, 2012. Carless wasn't actually the first to write about the Poway bonds. A retired  reporter and current blogger from Michigan, Joe Thurtell, wrote about Poway's bonds back in May, 2012 (here, here and here). In a May 12th piece titled "CAB scam in Poway", Thurell had this to say about PUSD's ballot disclosure for Prop C:

The nicest thing I can write about the language used by Poway schools in San Diego is that it was shrewdly phrased. But when framed with the ‘no new taxes” promises flung out by bond supporters, the bond proposal amounts to a brazen lie.
Whether they put down “yes” or “no” on the 2008 ballot proposal, voters in the Poway school district in San Diego could not have known that the “legal interest rate” on some of the bonds they approved would amount to an eye-popping, wallet-ripping 2200 percent.
Nowhere in the ballot language was it spelled out to voters that the majority of the debt that was approved would be in the form of Capital Appreciation Bonds with interest rates so usurious that CABs were banned in one state — Michigan — when the monstrosity was exposed.
Neither promised “mandatory audits” nor “independent citizens’ oversight” captured the reality for citizens — that these pernicious instruments of debt could only fulfill the promise of “no new taxes” if property values increase by hundreds of percent.
 Nor were voters made aware that there is no escape from this hall of financial horror. A term of the bond official statement states that they may not be re-financed to better terms.

Last Monday, August 20th, the PUSD Board of Education carved some time out of their regular monthly meeting to respond to the furor over the Prop C school bonds. The district prepared a powerpoint presentation and later posted it on their website. All of the current board members (Andy Patapow, Linda Vanderveen, Marc Davis, Todd Gutshow and Penny Ranftle), former board member Jeff Mangum and Superintendent John Collins stand by the decisions to borrow $105 million that will cost almost a billion dollars to repay and won't be repaid until 2052, and cannot be refinanced.

The district's position, as I surmise it, from the powerpoint file:  The schools in the newer areas of the district that are paying Mello-Roos fees are much nicer. They wanted to get some equity in the buildings in the district, so they put all of the non-Mello-Roos properties into a School Facilities Improvement District (SFID).  (SFID= a Mello-Roos for-the-rest-of-us.) Twice the voters in the SFID  failed to approve  bond measures.   After a statewide voter measure (Prop 39)passed,  lowering the percent needed to pass a school bond measure from 67% to 55%, PUSD was finally successful in getting a bond passed in the SFID. Prop U ($198 million) was approved in November, 2002. It was supposed to provide enough funds to renovate all 24 schools within the SFID, but unprecedented and unforeseen increases in building materials made it necessary for PUSD to ask the voters in the SFID to approve another bond measure, Prop C ($179 million), in February, 2008.

Oh wait, let me change that. According to former PUSD trustee Jeff Mangum, it was the voters, not the school board that passed Prop C. Well, yes it was, but it was the school board that worded the ballot measure, and promised not to raise taxes. The ballot statement said that the estimated cost of Prop C would be $16 per $100,000 of assessed valuation (av)  bringing the total cost for Prop U plus Prop C to $55/$100,000 av. Yes, that is what the bond measure said. At the board meeting, Supt. Collins also pointed out that there was some small print in the measure that said the final maturity of the Prop C bonds might be either 25 yrs or 40 yrs after the last issuance of bonds and that the maximum interest rate could not exceed 12%. I did read that back in 2008, and as a result, I questioned PUSD trustee Todd Gutshow about it (see below). My concerns were strong enough to keep me from voting Yes on Prop C in 2008.

In their powerpoint presentation, the district also pointed out that the total cost of borrowing the $376,998,406 will come to $1.6 billion, which is  $4.2611 for every dollar borrowed.  Passing the bond measures allowed the district to capture $92,523,994 in state building funds, which is a pretty cool thing.  So, the district added the state funds and $73,556,321 in "other district capital facilities funds (creative use of mello roos funds? redevelopment money?) to the principal amount of the bonds, for an amended payment ratio of 2.9579, which is really, really not a cool way to frame this. First of all, the state funds were not "free", they were paid for by us, the taxpayers. Secondly, neither the state funds nor the other district funds were borrowed money, so to throw those figures in and then to recompute the return on borrowed money is completely misleading, in my opinion.

There was one page in the powerpoint presentation that had some new (to me) information. Apparently PUSD told the San Diego County Taxpayer Association (SDCTA) that they planned to use capital appreciation bonds (CAB) for Prop C. The president of SDCTA, Lani Lutar,  confirmed this in a tweet, but she added that the estimated total cost was to be under 500 million.  In a  comment on Carless's article, Lutar said that SDCTA will soon be issuing a policy brief on CABs, but that they oppose them for bond terms greater than 25 years.

It is important to note that under certain market conditions, limited use of shorter term CABs may result in a lower cost to taxpayers in comparison to other financing mechanism, so CABs should not be written off under all circumstances. Will Carless was incorrect in his response post. We regularly ask for financing and debt cost information as part of our review process. Our analysis included the total debt cost that was provided to us by Poway in 2008. SDCTA's current policy on CABs is as follows: SDCTA opposes the use of Capital Appreciation Bonds (CABs) with maturities greater than 25 years as a financing mechanism for General Obligation bonds because of the increased debt burden on taxpayers. CABs with maturities of 25 years or less should only be pursued if it can be demonstrated that its use will result in less debt service than other financing instruments. Other financing options that should be compared to the potential use of CABs include voter approved bond reauthorization or additional voter approved tax increases. Defensible assumptions for growth in assessed value shall be used for development of any proposed financing method.

Apparently Lutar's group missed the small print that said the Poway bonds might be issued for a 40 year term.

PUSD may have let SDCTA in on their expected use of  CAB bonds, but SDCTA did not share that information in their report recommending approval of the Prop C bonds. I saw nothing in the ballot statement about these CAB bonds, nor anything in the literature from the Yes On C committee.  Nor did Todd Gutshow mention it in the email conversation we had prior to the bonds passing (see below).  Why not? Why was the CAB financing such a secret?

In fact, PUSD had already issued a  CAB bond in October, 2006, several years before Prop C was even on the ballot.  The bond was issued for $3,080,766.  It was part of the series B bonds for Prop U. The payback (final accreted value) amount will be $19,050,000. That is almost a 6-to-1 payback. This bond can not be redeemed prior to maturity in 2013. But who knew?

In addition to underestimating the true cost of renovating 24 schools, PUSD grossly overestimated the growth of assessed valuation in the SFID. These are the figures that SDCTA included in their report, but the figures likely came from PUSD:

Poway, PQ and RB make up the SFID. Most of those areas are already "built out". There would be minor growth in the Poway Industrial Park, but even that was mostly built out. In fact, the census bureau found that the City of Poway lost population between 2000 and 2010. Where was the 5-8% growth from 2008 to 2015 going to come from?  Back in 2008, I asked Todd Gutschow about this and some of the other details in Prop C (my questions are in black. Mr. Gutshow's responses are in blue):

Date: Thu, 17 Jan 2008

1. What EXACTLY is planned for Valley School?  Are there 2 plans for Valley- one if Prop C passes and one if it doesn't?   Newly constructed classrooms? More portables? Newer portables?  

There are two plans for Valley. Much of the planned renovations for Valley will take place using funds from Prop U. If Prop C passes, additional work will be done. I do not know exactly what is included in either plan. As soon as I have that information, I will get it to you.  

2. How old are the portables at Valley? 

3. Are the new portables that have recently been brought over for the preschool NEW or are they old?      In other words, how old are they? 

4. Have they been moved from other campuses that were renovated?    I suppose this sounds like I am asking if Valley is getting north Poway hand-me-downs.

 It is my understanding that these portables were used at Poway High School. I do not know how old they are, but will find out.  

5. Can Prop C money be used for district buildings (lease or remodel?).That is, can it legally be used for these purposes?  

It is my understanding that Prop C money cannot be used for building, leasing, or renovating the district office or other district administrative sites. Further, there has never been any discussion of using Prop U or Prop C funds for district offices. However, I need to verify what the language of the proposition allows from a legal standpoint (which I understand is the nature of your question).  

6. According to SDCTA info, Prop C will cost the taxpayers $497 million. If I had seen that earlier, I might have blogged about how a $40 million shortfall snowballed into a $500 million tax measure.  http://www.sdcta.org/Uploads/Documents/PropC.Poway_1.pdf  

I am a little surprised by your statement about the cost of repaying Prop C bonds. Any long-term borrowing (like a mortgage) always results in interest payments that are significantly more than the principal borrowed. The exact amount of interest will not be known until the bonds are issued. Also, I am not sure where the $40M shortfall number comes from. I realize that there have been several shortfall numbers floating around in the newspapers and various district materials, but the shortfall for the originally planned Prop U work is about $90M to $100M.    

There are some issues I still do not understand. According to the graphs on this document, assessed valuation is expected to grow by 7-8% during the next 3 yrs. That seems to me to be an overly optimestic  projection.  

Actually, 7% – 8% is reasonable based on the increases that we have seen the pass two years. According to the County Assessor, the 2007-08 assessed value for San Diego County grew by a little over 9%. I cannot find the growth for PUSD; however, generally, PUSD is a bit higher than the County in general. Even with market values falling, there remains a significant gap between the current assessed value and market value. As homes are sold or remodeled, the assessed value is up dated. I believe this will continue even with the current real estate situation.  

7. If Prop C did pass, and assessed valuation did not grow by 7-8% - if, in fact, it grow by 2% or less for the next 3 yrs, how does that affect the taxes the taxpayers will have to pay to pay off the bonds?  

If the assessed value base does not grow according to the estimates, then the district will not issue bonds. The district will only issue bonds when the assessed value base grows sufficiently to allow the combined payment for Prop U and Prop C to remain below $55 per $100,000 of assessed value. The district is 100% committed to keeping the combined tax for Prop U and Prop C below the $55 per $100,000 rate. By managing the timing of the bond issuances, the district controls the tax rate needed to repay the bonds. The district expects that Prop C bonds will be issued over the next 10 to 12 years, but that time could be extended if the assessed value base does not increase as expected. In the mean time, the district will borrow money using a bridge financing arrangement. The proceeds of the future bond issuances will be used to pay back this bridge loan. This mechanism allows the district to perform the work now (keeping the cost lower) while keeping its commitment to the taxpayers to maintain the tax rate at or below $55 per $100,000.  

8. Could taxpayers have to pay more than $55/$100,000 av?  

Legally, the tax rate under Prop 39 cannot exceed $60 per $100,000 AV. The district would not be able to issue bonds that would require a larger tax rate.  Prop U and Prop C are separate Prop 39 ballot propositions. Thus, it would be legal to increase the tax rate to $60 per $100,000 AV for each of them. This would make it possible to have a tax rate of $120 per $100,000.  Even though the maximum rate is much higher, the district’s plan for bond issuance, as I stated above, will keep the combined tax rate for both Prop U and Prop C at or below $55 per $100,000. The district will not issue bonds that would require the combined tax rate for both Prop U and Prop C to go above $55 per $100,000.  

9. More than $60/$100,000 av?Legally is there a limit? I know the limit for a bond proposition is an $60/$100,000 of estimated assessed valuation. But if the estimates are way off, what happens?  

As I stated above, under Prop 39, bonds cannot be issued until the actual assessed value base is sufficiently large to keep the tax rate at or below legal limit.  

10. If Prop C passes, and the district borrows money now- eventually they will have to pay back the loan. The assessed valuations may not be anywhere near projections, and 11-14 yrs from now the interest on the bonds could rise substanially. So, legally, even though PUSD said it is not their intent- is it still possible that taxpayers will be paying off both Prop U and Prop C bonds simultaneously- and for way more than $60/$100,000 av?  

The first part of your statement is correct. Prop U and Prop C bonds will be paid off simultaneously at some point. Right now, almost all of the Prop U bonds have been issued and the tax rate is approximately $44 per $100,000. Thus, it would be possible to use the remaining $11 per $100,000 to issue and pay for a portion of the Prop C bonds. As the Prop U bonds are paid off and/or the assessed value base increases, additional Prop C bonds will be issued. Interest rates on bonds are fixed. They cannot rise once the bonds are issued. Thus, bond repayment amounts are fixed once the bonds are issued. This sets the amount of tax that must be collected each year to fund the bond payments. This allows the district to issue bonds only if a tax rate of $55 per $100,000  or less generates enough tax revenue to fund the new issuance plus any other outstanding bond issuances.  

11. From SDCTA:The interest rate on any bond, which is established at the time of the bond issuance, cannot exceed 12% per annum.  The total debt service of this bond proposal is estimated to be $497.4 million; $179 million principle plus $318.4 million in interest. What is the projected interest rate on the bonds  that went in to the projected $497 million payback? What is the possible payback amount if the bonds were issued at 12 % ?  

I do not know the exact model used to estimate the bond repayment. I will have to check on this for you. 

So, as it turns out, PUSD did issue bonds that will cost the taxpayers more than $55/ $100,000 of av. We are currently paying $55/$100,000 right now and we haven't even paid off all of the Prop U bonds yet.  Just how much will it cost you? I haven't seen an all-in-one debt chart that includes both Prop U and Prop C debt service.  I had to improvise a bit, and I may need to revise later if I find more bonds that need to be paid. My figures are pretty consistent with the projection that Supt Collins used.

Debt Service Payments

2012    about    $11 million.

2021    almost   $22 million

2027    approx. $33 million.

2031    over      $45 million

2051    almost   $55 million

Assuming that the assessed value of your home and the other homes in the SFID, have the same relative value in the future as they do today, you would pay about twice what you are paying now in 2021, three times as much in 2027, 4 times as much in 2031 and 5 times as much in 2051. The owner of a house assessed for $300,000 currently pays  $165. that would creep up each year. By 2021 it would be $330, by 2027 it would be $495, by 2031 it would be $660 and by 2051 it would be $825.

My assumption is unlikely. In fact, it is absurd. All of our assessed valuations won't stay the same, relative to each other as they are today. Houses that sell will be reassessed upward. Properties that are not sold can be reassessed 2% (from Prop 13) yearly unless the purchase price exceeds the resale price- then they can be reassessed downwards. Periods of inflation would also drive up the assessed value and it would make the school tax payments less onerous because the dollars would be worth less. We bought our house in Poway 36 years ago. It was a new house and it cost $36,450. There were periods of inflation and there were a few recessions since then, although none so steep or so severely affecting housing prices as the period we just went through. Nevertheless, I think it is likely that the total assessed valuation in the SFID will increase and that inflation will make that $55 million payment not seem as huge as it seems today.  

The people who will be hit quite severely with the increased school tax payments will be new homeowners and businesses who purchase property in the district in a future time of rising prices. They will pay higher property taxes because of Prop 13 and they will pay a larger proportionate share of the school tax because the Prop 13 assessed valuation is based on the purchase price of their homes. It will be a double whammy. 

I am grateful that Todd Gutshow even responded to my request for information back in 2008. Todd and I plan to get together soon and talk about how things have turned out. One of the things I am concerned about is what is going to happen when the portables at Valley school crap out. And what the district intends to do to make sure the building stay in tip top shape for as long as it takes to pay for them. 

I also wanted to know why the district moved forward to buy a new headquarters with some money they had in another fund AFTER they issued a CAB bond in 2006 for $3 million.  We have to pay back $19 million, in 2031 for that bond. That is more than 6 times the amount borrowed. And it is not re-financeable. It seems like we had already dug ourselves in a hole in 2006, and we just kept digging. Why was the school board so optimistic that Prop C would not raise the tax rate on the bonds?

I will keep you posted.

PUSD's Prop C: The Naysayers Were Right

Last week, Voice of San Diego investigative reporter, Will Carless, published a piece on on a creatively financed PUSD school bond: "Where Borrowing &105 Million Will Cost $1 Billion: Poway Schools".  Carless lays out the details of the last bond sale authorized under Prop C, a school bond approved by the voters in 2008. PUSD financed $105 million through a capital appreciation bond (CAB) that will be paid off in 2051. The payments do not start for 20 yrs, although interest continues to accrue. The bond payments will eventually be about $50 million/yr., which is almost half the amount being financed. Unless we have massive inflation or massive new construction in the older areas of the district, we're screwed.  And not just us. Our kids and grandkids, and great grandkids are going to end up paying almost a billion dollars for this bond.

Carless' article created a lot of buzz. The article was reprinted in the Chieftain, as was a followup article by Carless. Poway Patch ran a blurb and an editorial piece (here and here).  PUSD released a statement in response to Carless' article.  I have some things to say about the bond sale, but I am not going to rehash everything that was in Carless' article or other articles. I am going to focus on some issues and nitty gritty details that are part of what I like to call "the bigger picture".

Mello-Roos, SFID, Prop Y, Prop U and Prop C
Many years ago, a developer in California could not build a housing development if the local schools were overcrowded. Then, the  California legislature allowed developers to form Mello-Roos districts to pay for the new schools. Home purchasers in Mello Roos districts pay yearly fees to pay for the bonds that built the schools in their areas.  PUSD has 14 Community Facility Districts (CFD, aka "Mello-Roos" districts) that were formed between 1987 and 2006. (There are possibly more formed between 2006-2012).  There are no Mello-Roos districts in the City of Poway. In 2000, PUSD decided the older schools in the district needed some upgrades. PUSD formed a School Facilities Improvement District (SFID), a type of CFD, from the older developments in Poway and PQ and RB that were not in a Mello-Roos district. PUSD put a school bond, Prop Y, a $156 million bond on the ballot. Prop Y got 62.93% yes votes, but it needed 67% to pass.

In Nov, 2000, California voters passed Prop 39, which allowed school bonds to pass with 55% voter approval. These bonds were capped at an amount that could be paid for by a tax rate of $60/ $100,000 of assessed valuation.  And, uh, there had to be a citizen's oversight committee.

PUSD could not get a $156 million school bond measure passed in 2000 because it required a 2/3 majority to pass, but in 2002, a $198 million bond measure passed with 57.4% of the voters approval. PUSD promised not to exceed a tax rate of $55/ $100,000 of assessed valuation. Prop U was supposed to pay for expanding and renovating 24 schools, but in Feb, 2008, PUSD asked SFID voters for $179 million more to finish the job.  Great job by the oversight committee, eh? Prop C passed with 63.9% approval.

Prop C misinformation
Personally, I think PUSD planned 2 bonds all along. I am sure there were cost overruns, and for some reason PUSD decided to improve every school in the district during a time of high labor and high materials costs.  Prop U + Prop C allowed the district to sell  a total of $372 million in bonds. A $372 million bond would still have required a 2/3 majority to pass, but by breaking the amount into 2 smaller bonds, PUSD could get them passed with 55% approval.

Another reason I believe they planned 2 bonds all along is because PUSD claimed that they were renovating the oldest schools first, but, in fact,  they didn't. For example, Valley School was one of the schools that did not get renovated until after Prop C passed, even though it was older than some of the schools that were renovated first. Why? Perhaps because voter approval of school bonds was more iffy in the Valley school boundaries, so Valley renovations became contingent on passing a second bond.

It is just my opinion that PUSD planned 2 bonds from the get go, but it is a fact, not an opinion that PUSD and the citizen group, "Yes on C" headed by Sabrina Butler, misrepresented Prop C to the voters. The Yes on C group  repeatedly presented Prop C as an "extension" of Prop U, instead of a separate bond measure.  They also said that it would extend Prop U "for 11 yrs". People were led to believe that if they extended the first bond measure for a few years, we could finish the job. It is kind of scary to to imagine why the well educated people of Poway didn't realize that borrowing $179 million a few years after borrowing $193 million was going to be like extending the first bond for a few years.

SDCTA
The San Diego County Taxpayers Association is not a citizen watchdog group. Far from it. Back in 2008, I blogged about the SDCTA board of directors and their vested interests in Poway School bonds. As it turned out, I missed a few connections.  April Boling is currently on the SDCTA executive committee. In the past, she has been president and held other board positions. Boling is hardly nonpartisan. She has served as campaign treasurer for several local Republican candidates and PACs She was also campaign treasurer for Steve Vaus' successful Recall Rexford committee. Apparently she was also the "contact person" for the "Friends of Poway Unified School District", a 527 political organization advocating for school bonds in Poway in 2002 (Prop U) and in Nov 2007 (Prop C).

SDCTA supported both Prop U and Prop C. Here is how SDCTA summarized the fiscal impact of Prop C:

Fiscal Impact:
Passage of this bond proposal will generate revenue from five issuances over an 11-year period between 2008 and 2019, totaling $179 million. Poway residents would continue to pay $55 per $100,000 of assessed property for an extended period, through 2044, under this proposal. The average assessed value of a home in Poway in 2000 was $200,000. The District has experienced an average assessed value increase of 9.36 percent annually over the last four years. As of March of 2006, the average assessed value of a home in the District is $337,401; therefore a homeowner can expect to pay an additional $185 a year in property taxes.
Table 1 outlines the projected increase in assessed value during the life of the bond. 

The interest rate on any bond, which is established at the time of the bond issuance, cannot exceed 12% per annum. The total debt service of this bond proposal is estimated to be $497.4 million; $179 million principle plus $318.4 million in interest.

The SDCTA projections are irresponsible. Housing bubbles don't last forever. Maybe they were planning on revamping Poway Rd with 5 story buildings or something, but the outrageous growth rates from 2008 to 2012  turned out to be way off. And it throws off all the calculations for the rest of the bond payback period. Currently, assessed valuation in the PFID is closer to $20 billion than to the projected $25 billion.  That shortfall ripples through the entire payback period, making it impossible to payback the loans at the promised tax rate.

Will Carless' article pointed out that PUSD won't even start paying back the $105 million bond until 20 yrs from now. Here is the chart that shows the payments from the audit report on PUSD's website:

From 2034 to 2052, the yearly payments on this bond will be about $50 million/yr. Currently, taxpayers in the PFID are paying about $11 million per year.  That means the assessed valuation of properties in the PFID need to more than quadruple in the next 20 yrs. Either that, or the tax rate will have to quadruple.

So why did PUSD structure a bond so that we don't start paying it off until 20 yrs into the future? Because, we will be paying off other bonds until 2034. The $105 million bond was the last bond sale of Prop C, but it wasn't the first. PUSD issued $74 million Prop C bonds in 2009. They are also CAP bonds.  According to the Jan 2012 audit report, PUSD does not plan to pay back those bonds until 2018.

Look at the period between 2028-2032. The repayment amount is over $107, million, or about $21 million/yr. Assessed valuation would have to almost double in the next 16 yrs to meet those payments. That will be difficult, because of the slowed economy, because most of Poway and the PFID is "built-out" and because Prop 13 limits increases in assessed valuation to 2%/yr. for properties that are not resold. We might be in trouble, paying off the bonds well before 20 yrs from now.

From the chart, you can see that the payments for the Series A Prop C bonds don't begin until 2018. I think that is because we will still be paying off Prop U bonds until then. One series of Prop U bonds will be paid off in 2017, another in 2027, and the last Prop U series will be paid off in 2032. The last Prop U audit report on PUSD's website, dated June 30, 2007, shows Prop U bond payments through 2032.

The chart for the Prop U bonds is slightly different than the one for the Prop C bonds in that it lists the years as fiscal years. Therefore 2012- 2017 is a span of 5 yrs in the Prop U audit, whereas it would be 6 yrs in the Prop C audit. I am hoping that some of these Prop U bonds were refunded, because I don't think we will be able to manage both the Prop U and Prop C bond payments between 2018-2033.

The bottom line is that the voters approved the sale of $377 million in bonds that were to be paid back over an almost 50 year period. It doesn't seem unreasonable that $377 million would generate over a billion dollars in interest over 50 yrs. While it doesn't seem unreasonable, it does seems stupid to have agreed to finance the bonds over such a lengthy period of time.


The Citizen's Oversight Committee
I'm not sure exactly what they are overseeing. The Prop C oversight committee members are Andrew Berg, Ramon Ruelas, Chrissa Corday, Bill Bonner, Lee Dulgeroff, Kathy Frost, Jerry Ricks, Roger Moyers, and John Strula II. They had meetings. Here are the minutes of their last meeting. It appears the committee and the district spent their time congratulating each other on what a successful job they have done. There is not a single word from anyone on the committee as to how this impossible financing becomes possible.

What Really Sucks
Prop U and Prop C paid for some new schools, some new buildings and modernizing of some portables. I know that Valley School got some old portables from Poway High. The district also spent money on technology equipment. There is no way in hell that those portables, refurbished or not will last until 2051. Technology is pretty much outdated the minute it is bought. Certainly, computers and other tech stuff won't last until 2051. So what will happen when the portables rot and the computers are dinosaurs? The fact that the tax rate on the current bonds may double or quadruple in future years is not going to endear the voters to another bond to replace aging portable classrooms.

The Contractor
Echo Pacific Construction did most of the contract work for Prop C. The district used a lease/leaseback agreement to avoid public bidding. New projects that came along, like astroturfing the sports fields were considered amendments to existing contracts. Echo Pacific Construction figures into an ongoing investigation of bidding issues at several other school districts. They know how to play the game to get the contracts. I am not insinuating that anything illegal was done in the PUSD contracts. I am just saying that they are involved in an investigation. And that they have close ties with several influential people in the community.

The Politics
There was opposition to Prop C.  A few libertarians (from outside of Poway) organized the  ballot statement in opposition to Prop C. The issues were pretty much related to the government-is-too-big theme. A local, grassroots group,  South Poway Residents Association (SPRA) studied the issue, polled their members and voted against endorsing Prop C.  They issued a press release with their reasons for opposing Prop C. I think one of the biggest issues is that they worried that their taxes would double in order to pay for the 2 separate propositions. Unfortunately, SPRA was belittled for their position and they were told that they didn't care about "the kids".

I blogged about Prop C here, here and here in 2008.  I received a phone call from a woman who was on the "Yes on C" committee and who happened to be a lawyer. She accused me of putting up illegal signs in Rancho Penasquitos and she also threatened to sue me over my blog. I put up no signs regarding Prop C anywhere. I should have reported her to the county bar association. I have no idea how she even got my phone number. Imagine what might have happened if we had had a sane and reasonable discussion of how we would pay back these bonds?

The point is, people did bring up issues. There were other voices that demeaned and disallowed our concerns. The Poway City Council members all endorsed Prop C, according to news accounts. When there was an empty seat on the council, Merrilee Boyack proposed that it be filled by Sabrina Butler, whose main credential was that she was the leader of the  "Yes on C" group. Now Merrilee Boyack is apparently very upset about the bond issue and is posting on facebook about it and sent out  "scathing emails". Where was Boyack when Prop C was proposed back in 2008? It is all too obvious that those who are currently making the most noise about the Prop C CAB bonds are people who support Steve Vaus for council, and see the opportunity to hang this mess around the neck of Jeff Mangum, a former school board member who is also running for council. Neither Boyack nor Vaus complained about the bonds back in 2008 or paid any heed to the voices that expressed concerns. I would not be surprised if Boyack and Vaus and Vaus supporters show up at the next school board meeting for a little kabuki theatre. It worked so well before. Remember the Rexford firetruck story? Color me jaded, but I have doubts about the genuineness of those who are just now complaining about the school bonds.

In retrospect, there are probably many lessons to learn from the whole bond mess. Maybe if the political process in Poway was more inclusive, we would be able to make better decisions. But I don't see that happening anytime soon.