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Schools bond practices to get one more review

Original post made on Jun 20, 2011

Government Financial Services, the consultants hired to review Pleasanton school district bond practices and go over them with a citizens committee, will meet with that committee again tonight. The consultant group is expected to answer questions posed last week by committee members, and questions emailed by members over the course of the last week.

Read the full story here Web Link posted Monday, June 20, 2011, 6:43 AM

Comments (37)

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Posted by Mike
a resident of Highland Oaks
on Jun 20, 2011 at 7:11 am

No one knows where the money went?



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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 7:45 am

I don't think it is no one, but apparently it isn't easily pulled together.


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Posted by Come on!
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 8:39 am

"Some questions, such as where the district spent the money it received through cash-out refinancing, are apparently outside the scope of what GFS was hired to do and will likely remain unanswered for now."

Luz Cazares should be able to answer right away. Either that, or why are we paying her so much? She is the financial person in the district, so Luz, do your job and release the information.

Chris Grant: you were a board member during this mess, so you too should release whatever you know... as taxpayers, we have the right to know what you approved to do with OUR money.

Can we sue Casey? Can we stop his pension to recover some of these costs? Or was it the previous superintendent, the one who went to Palo ALto who approved of this mess?


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 8:49 am

All Casey from what was presented. It may not even have been Cazares; I haven't looked for that answer yet. 2003-2005


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 9:01 am

Cazares started in August 2008 from Alameda newspaper. That there are closets full of bones that she has been able to make into a skeleton or two yet is not that big of a surprise. I will go far enough out on a limb to say I believe Casey was a my way or the highway leader. I believe we are only now finding answers because of the change in the governance team--board and superintendent.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 9:03 am

Should have said "from an article in the Alameda newspaper."


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 9:19 am

Why hasn't this committee asked the most basic questions. How much would the total cost of original bond measure have been if the district did not refinance the bonds? How much will the total cost of refinanced loans be?

I propose the reason they did not ask this most basic question is because they don't want anybody to know that the district did in fact act in a fiscally responsible manner by refinancing the bonds. I believe they would find that refinancing the bond measures has resulted in a net savings to the taxpayer even after taking cash out.

I believe the reason why this committee has not asked this basic question is because this committee is composed primarily of a select minority group who are trying to make the school board look fiscally irresponsible so they can further promote their single minded objective of reducing funding to the schools at any cost.


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Posted by Ruth
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 9:33 am

Yeah, nice try Brian.
Refinancing to reduce the obligation is absolutely the responsible thing to do.

Refinancing, AND TAKING CASH OUT without the permission of the public (who are ultimately responsible for the debt) is not OK.

The additional money was most likely used to fund pay advances for administration and certified staff.

If the obligation was extended by three years, that means the AVERAGE homeowner is on the hook for approximately an additional $2,500. I, for one, am looking for relief from this debt.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 9:39 am

Brian, that information can be found on the district home page at Web Link those questions were answered. It did cost us more and looks to have extended the life of the tax for years.

It is not the current school board or superintendent that committed the community to these payments.


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 9:41 am

Ruth

Show me where you get your information. Just because the loan is extended by 3 years does not mean it is going to cost the taxpayer more. For example if you spend $10,000 to pay off a loan in 1 year or the same amount to pay off the loan in 3 years, the cost is the same.

Show me how you calculate that the average home owner is on the hook for an additional $2500. Is this compared to the original bond measure? Where do you get your data?


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 9:43 am

Thank you Kathleen. I will review that data to see if it answers this basic question.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Jun 20, 2011 at 9:43 am

Stacey is a registered user.

Let's say you give someone $20 to buy something. They tell you, you're in luck, the price is now lower. It's only $10. They give you $5 back and then, when you ask them where the rest of the money is, they criticize you for asking. After all, you got some money back; look how much they saved you. You should be happy and quit complaining.

I don't think it is useful to speculate on what the extra money was spent on.


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 9:51 am

Kathleen

As far as I can tell, the GFS report does not contain any information on the total cost of the original bond measures that were refinanced nor the total cost of the refinanced loans. Is only shows how much the cash out option has cost relative to not taking cash out.

Is this basic question about total cost of the original bond measures compared to the total cost of the refinanced loans going to be answered at the meeting tonight?

In order for me to believe what you are saying, you have to show me proof.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 10:09 am

Brian, I am not the one providing the proof; just asking questions like you. Did you look at pages 2 and 11, and then page 7 in the second half of the deck? You are more than welcome to attend the meeting to hear the discussion and present your questions.

I am looking for a history of what happened that will always be available to the public and a policy for all refinancings going forward. I would like to know the money was used as specified.


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 10:10 am

Stacy

I certainly agree that the school district show be accountable for how they spend their money. However, let's bring this home.

If you agree to pay $20,000 for a new car and through the hard work and dedication of the people that make that car, they are able to reduce costs to $10,000. So, they pass on some of the savings to you and only charge you $15,000 even though you had already agreed to $20,000. Wouldn't you be happy? Isn't that still a net savings to you?

I understand that now, after AG Brown's clarification of the rules, the school district must give back all it's savings when it refinances loans or bonds to the taxpayers. That does not mean that their past actions of taking cash out when refinancing have cost the taxpayers more money that what the original bond measures would have cost. In fact, I believe that their actions have had net effect of saving taxpayer money relative to just leaving the original bonds run to maturity.

Prove me wrong.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 10:15 am

Brian, Aren't you are asking all your neighbors to be happy about paying for your deal?


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 10:29 am

Kathleen

I am saying that saving the taxpayers $5,000 instead of $10,000 is still saving the taxpayer money relative to doing nothing. Although this is not savings as much as could have been saved had they not taken out cash, it is still a savings.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 10:53 am

Yes, but it turns out, as the consultant told us, there was/is a moral obligation to refinance whenever it made/makes sense and to pass on all the savings. And really, it was required If additional projects were needed, a new bond could/should have been put before the community.

Only 70 of 1,000 school districts used cash out. Yes, it is likely not every one of the thousand has bonds, but the cash outs were not common practice and many were told not to do them. Clearly there was a reason.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Jun 20, 2011 at 11:31 am

Stacey is a registered user.

Brian,

That's right. You agreed upon a price for a new car and only that new car. That's not what happened here. You may never had made an agreement on that price if you knew you were buying a new car and a new scooter.


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 11:54 am

Stacy

Most people wouldn't be upset about getting a new car and a new scooter for the price they had agreed to pay for the new car only. Generally, I like getting more than what I pay for.


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Posted by Ruth
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 11:59 am

And I like paying less when appropriate and knowing exactly what I'm paying for. Especially because that is the law.


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Posted by Yet Another Teacher
a resident of Hart Middle School
on Jun 20, 2011 at 12:18 pm

Kathleen: Your suspicions about Dr. Casey are well-founded. Dr. Casey was full of bonhomie in public, but he was very effective at shutting down dissent and debate both at the central office and at the campuses. Many people had good reason to fear Dr. Casey's vindictiveness.

One good example was the so-called "strategic plan" for the district that was produced under Dr. Casey's close direction. Dr. Casey was careful to hand-pick people who were loyalists to his point of view, and he ignored alternate views from his principals, his teachers, and the parents of the district. That was standard operating practice for the Casey administration.

Where was the Board in all this? They rubber-stamped what Casey did because he was also very careful to control the flow of information to the Board. Very few Board members have either the time or resources to conduct independent inquiries into important matters, and during Casey's time with the district, the Board accepted his, erm, "stories" very willingly.

Two of Casey's enforcers who did the actual work of retaliation against would-be whistleblowers were Cindy Galbo (still with the district) and Clem Donaldson (who retired with a pension that is, amazingly, larger than Casey's).

It was Casey's constant dissembling, and the subsequent exposure of his many misrepresentations, that have largely eroded public trust in PUSD. I feel sorry for Ms. Ahmadi, the current Superintendent, and for Luz Cazares, who are left to clean up Casey's mess. Neither of them deserve this train wreck, but they have it, anyway.

Luz Cazares had nothing to do with the cash-out refinancing. I know for a fact that Luz has spent years trying to uncover the many mysteries of Dr. Casey; he pulled so many tricks (the elementary school, lying about the extent of layoffs in the district to try and get the first parcel tax passed, refusing to take a symbolic pay cut while asking teachers to take a substantial one through furlough days, etc.) that it's hard to know where to begin.

And no, I am not and never was a fan of Casey, Galbo, or Donaldson. I'm glad Casey and Donaldson are gone; they did incalculable damage to PUSD.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 1:28 pm

YAT, when you least expect it, some common ground. It will be small agreements like this that i hope will help the district move forward. I would place this in the hands of those who wielded the power. I think this was a very bad 8 years for PUSD. I continue to have high hopes for Ms. Ahmadi, her staff, and the board. Their success and that of students are inextricably linked.


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Posted by jill
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 2:33 pm

YAT, I agree completely with your assessment of the "cast of characters" in the administration as I was there also. Adding to the Strategic Plan committee. The other reason that Casey hand-picked members of those committees is because there were stipends that went along with them. Just like Clem, Casey's associates were given differential treatment financially.

There is the problem with the board also. For too long we have had board members who do not question anything that staff said. There is still somebody on the board from that era. There were a couple of board members that asked questions and would challenge statements of Casey but most of the board ended up being cheerleaders for Casey.

I think it is quite important that Ahmadi is going to have to work hard to build some trust. Probably going a bit overboard in disclosures and listening to the community. I had a lot of high hope for Ahmadi as well as Cazares but their behavior during the last parcel tax turned me off. While they should have been factual; they were answering questions in a blatantly biased method which did nothing to build trust. Whether we are for or against more money from the taxpayers, I feel that once a decision to put something to the ballot has been made, the administration should really just be there to answer questions honestly; even if it makes some people question the tax. Their lobbying was no different than the administration campaigning for specific board members. While it is probably not illegal, they should have taken the high road and stay out of the politics. They claim they are a district of character. They need to act that way.


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Posted by WoW!
a resident of Another Pleasanton neighborhood
on Jun 20, 2011 at 7:52 pm

This thread has taken an *interesting* turn - very enlightening. THANK YOU, YAT for clarifying many people's suspicions!


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 20, 2011 at 9:00 pm

Interesting evening.

Was the term extended as a result of the refinancings? No for Measure A; shortened for Measure B. Caveat, the refinancings did increase debt for taxpayers to cover in the short term. Measures A and B saw rates ranging from $57.30 to $121.10 per $100,000 AV. Savings start to show up in 2015.

Savings of $9M vs cash out of $7M.

Compensation to bond counsel and underwriter is not cheap, but not wildly out of line.

More to come in August on where the money was spent. Update of materials so far will be presented to the board tomorrow night. I believe tonight's charts will be posted on the web.


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Posted by Steven
a resident of Pleasanton Meadows
on Jun 20, 2011 at 11:54 pm

I have had the opportunity to hear Dr. Casey come and talk to our business group, several times.

Casey was arrogant as hell, every time!!!

Time to adapt a better attitude at PUSD. Time to really adapt the "let's do what is REALLY good for the kids", and NOT "what is good for my pocket!!!"

I hope Mrs. Ahmadi is reading these postings. Although, I tried to talk to her at one of those business meetings and she didn't seem to want to listen... Time will tell.


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Posted by Yet Another Teacher
a resident of Hart Middle School
on Jun 21, 2011 at 7:02 pm

Superintendent Ahamadi is in a very difficult position. The previous board froze the Casey Administration in place just before Casey left, by extending the contracts of the assistant superintendents by three years. That means Ms. Ahmadi is not free to pick her own people, as Dr. Casey was.

So Ms. Ahmadi has to work with Casey's crew, some of whom are working to keep her from listening to good advice. Many teachers tried to warn Ms. Ahmadi that Parcel Tax: The Sequel was NOT politically advisable at this time, but Ms. Ahmadi chose to listen to Casey's people. The results were sadly predictable.

Ms. Ahmadi needs to gather her own facts and begin listening to the principals, teachers, and parents, not the holdovers from Casey's administration. So far, our new superintendent hasn't done that, and has made some missteps because of that. There's still time for her to correct course.

As another example--and I won't name the campus because I promised I wouldn't (but it's NOT Hart Middle School!)--during the midst of this financial crisis, the administration at one campus was using funds from the principal's discretionary fund to buy brand-new computers for the administrators and redecorating the offices of the principal and the assistant principals. The cost of these new computers (which the principals didn't need) was $12,000. At the same time, many teachers did not have working computers in their classrooms (but yet this same principal berated the teachers for not submitting their grades electronically). The parents' organization at that campus has been working their butts off to raise money for a new computer lab, but I wonder what they would have said if they'd known about the $12,000 for new computers for the principals or the $6,000 office remodeling funds?

This is one example of how funds are wasted in PUSD. Ms. Ahmadi needs to start scrutinizing and questioning everything in this district. We are fortunate that most principals and teachers in PUSD are conscientious in trying to get the most "bang for the buck", but there are several campuses where morale is lower than a snake's belly in a wagon rut. For the entire run of Dr. Casey's administration, PUSD has suffered because of nepotism and certain favored people (administrators and teachers) being able to act without accountability, and it's time for it to stop.

Ms. Ahmadi can start with the central office and work her way out from there. But as I said before, it's going to be very difficult with so many of Casey's handpicked people still in place. I wouldn't take the job of PUSD Superintendent for double the salary.


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Posted by Interested
a resident of Another Pleasanton neighborhood
on Jun 21, 2011 at 8:50 pm

Wow, YAT. Are you the same YAT that so eloquently defended PUSD against the witch hunters? What happened. Are you being blackmailed, or are you not who you say you are?


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Posted by resident
a resident of Another Pleasanton neighborhood
on Jun 21, 2011 at 10:17 pm

... or perhaps the truth is just the best course for everyone concerned.


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Posted by Yet Another Teacher
a resident of Hart Middle School
on Jun 22, 2011 at 8:38 am

I have not changed my tune, just emphasizing the bad parts. Please re-read what I just wrote:

"We are fortunate that most principals and teachers in PUSD are conscientious in trying to get the most "bang for the buck", but there are several campuses where morale is lower than a snake's belly in a wagon rut. For the entire run of Dr. Casey's administration, PUSD has suffered because of nepotism and certain favored people (administrators and teachers) being able to act without accountability, and it's time for it to stop."

In my experience, MOST of the employees in PUSD give outstanding value for the money. MOST of the central office and campus office staffs do the work of 2, 3, or even 4 people. MOST teachers pour their hearts and souls into their jobs. MOST campus principals are conscientious and hard-working.

I am focusing on the SOME, the minority who were protected by Dr. Casey and who continue to live in an accountability-free zone. Unfortunately, since one of the worst campus administrators was just promoted to a plum district office job, I'm afraid that Ms. Ahmadi's administration continues to be Dr. Casey's administration in all but name. This continuation of "business as usual" has lots of causes, but the main ones I can identify are:

1. The central office administration, with the exception of Ms. Ahmadi, are all holdovers from Dr. Casey's tenure.

2. The ingrained culture of PUSD, which has far too much "good ole boyism" for my comfort.

3. The failure of the Board to take a more active role in demanding a review of personnel practices in PUSD, especially in the hiring of district office administrators.

4. The weakness of the APT (Association of Pleasanton Teachers) in pushing for changes that would stop bad teachers from becoming bad principals who then become bad district administrators. The current leadership of APT describe themselves as "mediators" between teachers and the administration, when in fact our union dues pay them to be our advocates. The current APT President is perhaps not interested in returning to the classroom after his term expires, which means his next stop is...the central district office.


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Posted by janeions.this
a resident of Birdland
on Jun 22, 2011 at 9:09 am

Once again this thread has meandered off topic and has become a mudslinging vehicle. Dr. Casey is gone. The current administrators, some who were here before Dr. Casey, are doing a fine job. They have a sincere interest in listening to the community and take action where necessary. By the way....Chris Grant was not on the school board during the time in question. According to last night's report, the cash out refi was a common practice and had not been ruled unconstitutional at the time in which PUSD did their transactions. In fact, the last cash out transaction took place well before the Attorney General began his review and then took another 2 years to rule on it. I do believe PUSD had every good intention and acted within the law as it was known at that time. Let's move forward, learn by this, and establish some best practices to govern our financial procedures.


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Posted by Yet Another Teacher
a resident of Hart Middle School
on Jun 22, 2011 at 10:34 am

Jane wrote: "The current administrators, some who were here before Dr. Casey, are doing a fine job. They have a sincere interest in listening to the community and take action where necessary."

I strongly disagree. Some of the current administrators are well-known for shutting down debate, excluding critical viewpoints, and pretending to listen to the community.

I and many other teachers (and parents) can recount endless examples of meeting with administrators, giving our point of view, and then being told that the administrators are going to do what they decided to do weeks or even months before the meeting took place.

Dr. Casey is gone, but the damage he did to PUSD in its culture and practices is not gone, and some of his people continue to run PUSD just as they did before, the new Superintendent notwithstanding. I want Ms. Ahmadi to have a chance to run the district her way, for better or worse.

You can call my criticisms of Dr. Casey et al "mudslinging" but my statements are my honest opinion, based on many experiences on various site and district committees, and from careful observation.

I know that the "party line" is that "Casey is gone, Ahmadi is here, it's a brand new day in PUSD", but those of us who see the same people being rewarded for incompetence and even dissembling know better.


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Posted by DJohns
a resident of Amador Valley High School
on Jun 22, 2011 at 11:19 am

DJohns is a registered user.

Janeions.this,

You are wrong; PUSD broke the laws that were in place.

Last nights meeting clarified that the AG interpreted the law that was already in place. The district broke the law and participated in an unethical practice to circumvent the law that required getting voter approve for millions of taxpayer dollars.

To continue justifying this unethical behavior suggests that nothing has changed, the culture remains the same.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Jun 22, 2011 at 12:11 pm

Stacey is a registered user.

I don't think the district actively sought out the cash-out scheme. It's been noted in the news that the bond counsels and banks solicited many districts with this scheme.


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Posted by DJohns
a resident of Amador Valley High School
on Jun 22, 2011 at 1:54 pm

DJohns is a registered user.

How they learned of this clever way of circumventing the law does not matter. They refused to allow an oversight committe to be reconviened while they were participating in this illegal practice.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Jun 22, 2011 at 2:35 pm

Kathleen Ruegsegger is a registered user.

Even if you can throw this to bond counsel, it is clear that putting taxpayers further in debt should have had thoughtful consideration and a parade down Main St with floats saying, "heres what we are thinking!" Doing it six times in a few years feels more like someone was in a big hurry to take advantage, particularly because the constitution and Ed and gov codes were already in place.

That said, I'm glad to get this loudly on record and look forward to seeing what the best practices will be. And I think it will be helpful to Ms. Ahmadi and Ms. Cazares.


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