Plesanton school board to consider borrowing from technology fund to pay for facilities plan Schools & Kids, posted by Editor, Pleasanton Weekly Online, on Mar 13, 2012 at 8:34 am
The Pleasanton school board tonight will look at the possibility of borrowing money from a fund set up with the sale of property -- known as the Sycamore fund -- to pay for a facilities master plan already approved by the district.
Read the full story here Web Link posted Tuesday, March 13, 2012, 7:16 AM
Posted by Radumton, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 8:34 am
"...some of the projects listed in that report would be in places where homes couldn't be built and in other places were construction is unlikely at best."
Amazing how Pleasanton Unified says that in the Radum CA quarry site (Web Link) between the Pleasanton Garbage Service Dump and the new Livermore Outlet Mall/Livermore Airport (where there are all those For Sale or For Lease signs for Industrial Sites) the school district says entire residential subdivisions are now being built in the Livermore Airport Protection Zone (I wonder if some of the houses float or are under water?)
How can that be when the Livermore Municipal Airport, City of Pleasanton, City of Livermore and Alameda County know nothing about this according to Figure 4-1 here? Web Link (Fig 4-1)
Posted by Kathleen Ruegsegger, a resident of the Vintage Hills Elementary School neighborhood, on Mar 13, 2012 at 9:19 am Kathleen Ruegsegger is a member (registered user) of PleasantonWeekly.com
Key sentences: "In 2001, the Sycamore fund stood at more than $7.2 million. Now it's down to a little over $4.9 million, with more than $2.4 million owed by the district."
Another bad habit remains after the retirement of the last superintendent--borrowing. If the district hasn't paid the $2.4 million back yet, how are we to believe it will ever be repaid? And why would we borrow at a time when technology in the classroom (iPads for instance) is advancing? Where does the district reserve stand? How 'bout we take the $250,000 out of the paychecks of those who insisted on this study?
Is the entire cost of early retirement explained? Is it a golden handshake and lifetime benefits?
It will be business as usual until this community demands otherwise.
Posted by Percy Abbicott, a resident of the Bordeaux Estates neighborhood, on Mar 13, 2012 at 9:28 am
It could only be paid back if the economy improves. But we know it won't improve for a very long time. It'll be business as usual until we have a Republican President and Congress. It pains the heart to see the economy get worse, month after month, especially in this region. I like the idea of taking $250,000.00 out of the paychecks of those who are suggesting this. Can we get that put on the agenda for tonight? Probably not! Oh well, business as usual.
Posted by Fed Up!, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 9:52 am
@ More Debt, I'm pretty sure Hintzke and Arkin will be the ones to vote "no" on this - as they have on so many STUPID things that the 3 stooges have voted "yes" on and passed. I hope all those who voted for the stooges are happy. THAT MONEY IS FOR TECHNOLOGY!!! Not a plan we don't/didn't need at the moment. PUSD was just forced to cut more tech. money from the budget. I hope the citizens who actually vote in Nov. election keep what is going on in mind and don't vote 2 more stooges in - I hope that both Hintzke and Arkin run again for the board. We need them on there.
Posted by Kathleen Ruegsegger, a resident of the Vintage Hills Elementary School neighborhood, on Mar 13, 2012 at 10:08 am Kathleen Ruegsegger is a member (registered user) of PleasantonWeekly.com
"Percy," Wouldn't be counting on a Republican president and congress anymore than those in power now. It was a lousy idea to move ahead with this study when there was no money for it and more cuts were obviously on the horizon ($5.3 million shouldn't have been a surprise).
Posted by Stacey, a resident of the Amberwood/Wood Meadows neighborhood, on Mar 13, 2012 at 10:13 am Stacey is a member (registered user) of PleasantonWeekly.com
Can't scrap the facilities master plan as it will be needed, but it can definitely be delayed, especially at this point in time when there's still too much uncertainty as to what the revenue from the State is going to look like.
Posted by MOM, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 11:09 am
It all goes back to what they think the community(parents) will pony up more money for later. I'm sure they think of 'course parents will contribute for technology in a couple of years... who doesn't want the best technology in their schools?'
But will parents contribute for a high priced consultant study? I don't think so.
Don't spend money you don't have. Sure, I would like to update and expand my house. But I don't have the money to pay for it or money for the extra monthly payment of a loan.... so I'm not calling any architects. Seems like the school board needs to learn that lesson.
Posted by it's better, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 12:12 pm
sorry, when I said scrap, I meant until after the election (that is what Arkin had proposed) when we know more about funding. Plus we need to learn more from the city before spending this money makes sense.
Posted by Stacey, a resident of the Amberwood/Wood Meadows neighborhood, on Mar 13, 2012 at 12:38 pm Stacey is a member (registered user) of PleasantonWeekly.com
Does borrowing from the Sycamore fund increase PUSD's debt service ratio and affect future borrowing? For example, will it be more expensive for taxpayers to borrow money to build a new school because of new debt owed to the Sycamore fund? Which is the tougher decision to make: delay funding of the facilities master plan until a clearer picture of revenue emerges or increasing borrowing costs?
(See also Web Link from the recent bond oversight consultant for best practices on debt limit policies.)
Posted by Radumton, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 1:08 pm
Stacey, the district has used Certificates of Participation that they don't have the money to pay back. It is like going down to the pawn shop by mortgaging facilities that the taxpayers have already paid to have built in the first place.
It only takes the vote of the Board to take public property down that has been paid for to the pawn shop and get a loan. The Certificates of Participation scheme works like this: The School owns a piece of property, a middle school, for example.
Without the opportunity to have the voters vote on it, the Board gives title to the middle school to some outside corporation/trustee so the Board doesn't really own it any more. Then the school board has to pay 'rent' in the form of COP payments to lease that space so that students can be educated, paying the rent to these investors from the General Fund.
Default on the COP payments and no more middle school. It is seized.
Posted by long time parent, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 1:21 pm
Borrowing from the Sycamore Fund does not increase the debt ratio. It is an internal borrowing.
Was also told that the COP debt is not counted as part of the debt ratio. The COPs are technically not a loan. They are a leaseback. The district transfers the asset (in this case Harvest Park Middle School) to a corporation, and then we make "lease" payments on it. Once the "lease" is completely paid off, the asset (Harvest Park) gets transferred back to the district. I was sent a copy of the official COP document from Piper Jaffray and it states "Neither the Certificates nor the obligation of the District to make lease payments constitutes a debt of the District... within the meaning of any constitutional or statutory debt limitation or restriction." It seems that a COP is another way to get a loan but not count it against your debt limit (sneaky way to get around it). I think this is the same firm that did the cash-out refinancing of our Bonds, which was deemed illegal.
Posted by Stacey, a resident of the Amberwood/Wood Meadows neighborhood, on Mar 13, 2012 at 1:30 pm Stacey is a member (registered user) of PleasantonWeekly.com
I agree that the COP method of financing seems dubious since it allows an agency to take on public debt without a vote of the people as required in the California Constitution. Besides that though, the districts ability to afford debt is of greater concern.
Do you know what the current PUSD debt service ratio is? I was unable to find it in the latest "debt study" board packet nor in the budget. Compare with the City's budget document which lists projected debt service ratio through to 2013 (a healthy 2-3%): Web Link
A lender would look at PUSD's debt service ratio to determine the district's borrowing costs. I'm wondering if borrowing from another fund increases that ratio.
Posted by Stacey, a resident of the Amberwood/Wood Meadows neighborhood, on Mar 13, 2012 at 1:33 pm Stacey is a member (registered user) of PleasantonWeekly.com
"Neither the Certificates nor the obligation of the District to make lease payments constitutes a debt of the District... within the meaning of any constitutional or statutory debt limitation or restriction."
Oh, it's debt alright; just not considered to be debt that needs a vote of the people.
Posted by Radumton, a resident of the Another Pleasanton neighborhood neighborhood, on Mar 13, 2012 at 2:33 pm
Stacey, you are right, it is debt in that payments are owed to a third party. But the District promised 'housing futures' in the form of taking the theoretical 'holding capacity' of land to hold houses (even when the land isn't even zoned for residential and some that is not even in the city limits) as security that they would have adequate incoming developer fees to pay back payments of the underlying COPs.
And they say the source of the information for these 'housing futures?' The city of Pleasanton.
And just like the Berkeley chief of police is in hot water for sending an officer to a reporter's house in the middle of the night to issue a 'story correction,' this school district administration is more concerned about "try(ing) to get ahead of the inaccurate media spin" than addressing legitimate public questions about PUSD's process for justifying debt and its plans for repaying it.