Carlsbad Unified committee lobbies residents to pass Measure HH

Carlsbad Unified committee lobbies residents to pass Measure HH

Moorlach report finds 2/3 of Californias 944 school districts bleed red ink

Sen. John Moorlach released his latest fiscal report, Financial Soundness Rankings for Californias Public School Districts, Colleges & Universities. SEE REPORT HERE. It follows his March 2018 reports on the states 482 cities that found 2/3 of them in the red; of 58 counties, 55 suffered deficits and only three enjoyed positive balance sheets. His May 2018 report on the 50 U.S. states found only nine were financially healthy, with California ranked among the worst, in 42nd place.

The Moorlach Report is a flashing caution light to almost every public education budget in California. Unless things can change quickly, taxpayers can expect new levies, and post-secondary students and parents should fear higher tuition. This article was released by the Office of Senator John Moorlach.

Editor’s Note: Los Alamitos Unified School District is ranked 426, Savannah Elementary School District is ranked 408, Cypress Elementary School District is ranked 423, and Anaheim Union High School District is ranked 463.

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As we deliberated the merits of Measures E and D, the Modesto City Schools board of trustees did an odd thing. It voted to gag itself.

As a result, local bond measures have proliferated, particularly since 2000, when voters lowered the threshold for approval of school bonds to 55 percent, rather than the two-thirds super-majority that had been required. Repaid from property tax increases in the local district, local school bond measures typically pass at high rates.

What is the board worried about? Are new superintendent Sara Noguchi and trustees John Walker, Amy Neumann and Cindy Marks – those most in favor of self-imposed silence – afraid someone might say something too revealing?

Are they worried well ask even more questions about those bond measures on the Nov. 6 ballot? Absolutely.

At an editorial board meeting in September, we asked our guests why two bonds instead of one? After all, both E and D benefit Modesto City Schools Elementary School District; why split them up?

Critics of that system say it favors wealthier districts that have bonding capacity to raise more money and specialized staff to navigate the cumbersome application process. Districts that have applied, meanwhile, complain the state has released only a fraction those matching funds.

Could it be that some of the bonds wont be sold immediately and could be held for future sale? Thats a fairly common practice (or trick if you prefer), according to those who track such things. If sold later, with interest rates rising, will they cost homeowners more?

We were referred to a binder – 2 inches thick – that details $1 billion in fixes and deferred maintenance across all district facilities. It appears to be the same binder the board used in 2016 when negotiating with teachers over pay raises. The schools were in such bad repair, went the logic, that teachers should take less so the district could do more maintenance.

Instead of a list, many of those projects have been assigned letter grades denoting urgency. Which projects got an A? Which ones got Fs? More bluntly, which ones will come first? No answer.

Michael said school safety has become a hot-button issue following recent, tragic school shooting incidents and he believes the reason so many districts cite safety and security in their bond proposals is that it helps appeal to voters.

Until voters passed Proposition 39 in 2000, school bonds were a much-abused jackpot for bankers and bond-sales firms. New laws limited interest rates, what bonds could be used for, and set up oversight committees. They also require districts to tell voters exactly what theyre getting for the money. Except many dont.

Modesto City Schools estimates a debt-to-principle ratio of 2.0, meaning the cost to repay them will be 100 percent. The bonds package (city schools term) will raise $131 million; but property owners will repay $262 million.

There are 106 school bond measures across the state, worth $15.6 billion – including four in Stanislaus County, two in Merced and one each in Ripon and Escalon. The average debt-to-principle ratio is 1.975 but many districts estimate theyll do better. Palo Alto Unified is borrowing $460 million, and will pay back $805 million – a ratio of 1.75; South Bay Union in San Diego is borrowing $18 million and paying back $31 million, a ratio of 1.72.

If Modesto City Schools got South Bays deal, it would be repaying $225 million – a $37 million savings. Even getting the average would save roughly $3 million.

At least 50 school district bond measures have ballot wording – some of them share exact phrasing – that explicitly states the bond funding would go toward improving schools safety and security systems.

(Atwater is getting the areas best debt-to-principle ratio at 1.29, followed by Salida at 1.92, Escalon 2.01, Riverbank at 2.03 and Ripon at – gasp! – 2.29.)

That to me is just a predatory tactic by people who want to get something passed, Michael said. Many of these schools have had safety (and security projects) on their previous bond measures.

Will Modestos bonds be sold through competitive bids or negotiated sales (usually resulting in higher costs)? Will the district pay for an unnecessary bond rating? What costs will be rolled into the bonds?

The Lowell Joint School District in Los Angeles County is asking its voters to approve a $48 million bond that would partly repair termite damage, dry rot and deteriorating roofs in its six schools.

Bond watchdog Richard Michaels permanent hobby is running the California School Bonds Clearinghouse, which makes state data more readable. He got interested when his school district sent around a slick mailer promoting a bond measure.

State law requires school districts that have passed bond measures to form local, volunteer oversight groups to monitor how they spend bond dollars through public meetings.

I asked the (districts) chief business officer, Where is the specific list of projects? He told me, We dont have to give you one, recounted Michael. This is what they do. This is why Im fighting this the way I am.

San Franciscos TBWB has run 200 successful public finance ballot measures that have raised billions in voter-approved revenue, including the last bond measures for Modesto schools and now Measures E and D.

A UC Berkeley study in 2012 put the statewide backlog of needed repairs and renovations at $117 billion over the next decade.

What a coincidence. Thats the same company that provoked Michaels anger. Is it also a coincidence we got the same answer (albeit, more politely) from bond proponents?

Modestos elementary schools desperately need updating. Fifteen are more than 60 years old, four are 70-plus; Wilson School is 89 years old. Problems that didnt exist when schools were built can be deadly today. Cars and buses crowd entrances, creating danger. In 2014, a kindergartner was killed by a vehicle while leaving school.

Measure D, would provide $74 million to improve safety, fix leaking roofs, update emergency systems and replace old electrical systems. All are necessary. But why not level with us about exactly which parking lots will be reconfigured, which leaky roofs will be fixed, which electrical systems will be rewired? And what will Measure E pay for? When?


Posted in Carlsbad