The City Council voted 4-0 confirming that PUSD canít pay $800,000+ on an annual debt payment. The City will bailout PUSD with a $1.2M revolving loan.
In 2002 and 2003, PUSD made a real estate bet that development in Pleasanton will continue at a pace for 20 to 30 years that would produce development school impact fees greater or equal to $1.2 M. This bet on future revenues was used to secure a $20M fund from outside investors. This year, with the collapse in construction, only $600,000 is expected in impact fees. After paying $203K for lease payments on portable buildings, that leaves $398K for debt service, with PUSD looking for approximately $800,000+ to make itís annual debt payment.
What made matters worse, is that discussion of this item at Tuesdayís Council meeting turned into a thirty minute Measure G and PUSD propaganda show (watch it here Web Link) complete with how much PUSD is hurting from the economic malaise and the California State budget fiasco, how programs and services at PUSD are threatened, and how this community must rally to do everything it can to help the kids. And this (the bailout) is the way the City can help.
This is complete political crap. The PUSD operating budget and capital budget are separate and have nothing to do with each other. This is confirmed by the yes on Measure G website FAQs.
The bailout is nothing more than adding to the financing house of cards the City and PUSD built. A portion of the $20M fund was used to finance the never-built Neal School and the legal issues on this matter continue costing PUSD to this day. Betting on future development dollars is Pleasantonís local version of the financial shenanigans that caused the national residential and commercial real estate collapse.
Our feel-good Councilmembers and Mayor have all endorsed Measure G and are covering their backsides, along with 11-year PUSD Board Trustee Kernan. They are trying to figure out how to get out of the mess they have created.
Claiming this has everything to do with kids and community is political grandstanding, diversionary pontificating, and an outright lie.
PUSD and the City made a real estate bet, and they lost. PUSD is broke. They canít pay their capital debt payment, and need a loan from the City. Given the dire prognosis of the state of California as spoken by Councilmember Thorne and City Manager Fialho, they should not be surprised if PUSD is back before the Council asking for more bailout funds.
Save Pleasanton Schools. Demand structural reform from the PUSD Board of Trustees.
No on Measure G. No on Props 1A-1E. And when thatís done. Recall PUSD Trustees starting with Mr. Kernan.