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Citizens committee to recommend oversight for future bond issues

Original post made on Aug 23, 2011

It took several meetings, but a citizens committee formed to look into cash out refinancing will issue its final report to the school board next month.

Read the full story here Web Link posted Tuesday, August 23, 2011, 6:48 AM

Comments (35)

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Posted by Mary
a resident of Del Prado
on Aug 23, 2011 at 9:02 am

It is a relief to hear that the committee has formed. Even though the district may refuse to provide some answers, the public will now have the opportunity to qualify their search for answers.

I do not understand how a public entity (ie. the schools) can get away with hiding information. Wish I knew more about the law.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 23, 2011 at 9:05 am

The committee did learn how much money was spent at each site. What we did not learn is exactly where those amounts were spent at each site (if there was more than one project . . . classrooms, multi-pupose room, etc.). One member of the committee had some documentation from the district that showed the specifics (i.e., Amador pool: $1.9 million), so interested community members can likely acquire that information.

Also, the committee learned that schools on the Measure A list showed up again on the Measure B list. I don't think it was made clear whether this was to complete unfinished Measure A projects or whether these were additional projects at Measure A sites.

The committee did vote to accept the recommended best practices (there was one adjustment suggested), and we also generally agreed the focus needed to be on how the district would move forward. For me, that means a culture of transparency on all financial reporting.

Bullets for the best practices were:
Focus on transparency and integrity going forward
Ethics training
Best practices related to debt issuances:
--Debt management policy
--Selecting and managing the method of sale of state and local government bonds
--Selecting financial advisors
--Selecting bond counsel
--Selecting underwriters for negotiated bond sales
--Pricing bonds in a negotiated sale
--Using variable rate debt instruments
--Analyzing and issuing refunding bonds

I couldn't immediately find the materials on line from last night's meeting where each of these bullets is explained, but have asked that they be posted as soon as staff can get to it given it's the first day of school.


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Posted by Surveys too?
a resident of Another Pleasanton neighborhood
on Aug 23, 2011 at 9:59 am

Might that also include blowing the whole budget on 'surveys' of bonds, over and over to get results they want. I've never been contacted in one of their surveys....do they avoid certain people. If ID said Pleas schools I sure would answer.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 23, 2011 at 10:15 am

@Surveys, do you mean the surveys for the parcel tax attempts? The consultants have run those, and it's supposed to be random calls. I don't think it would come up as PUSD because they aren't run out of the district or a school. If they ever do another survey, perhaps they could run something out here to get the word out to the general public. I would think the parents were made aware through school newsletters.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on Aug 23, 2011 at 6:57 pm

Kathleen,

So what are the specifics if you or anyone knows? How much money was spent? on what? how will the money be paid back? What procedures and safeguards are now in place to make sure this cannot happen again? Were they aware that what they were doing was wrong?


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Aug 23, 2011 at 7:04 pm

Stacey is a registered user.

"The committee did learn that some of the money from Measure B was spent on projects that were to have been completed with Measure A money."

Cost overruns from Measure A projects could have and probably did occur. I don't think that is anything unusual if it was made clear to voters that some of the Measure B funds would be used to complete Measure A projects.


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Posted by long time parent
a resident of Birdland
on Aug 23, 2011 at 7:47 pm

Actually most Measure A & B projects were under budget since they were matched by state bonds. At the time of the bonds, it was thought that Pleasanton would not get any state bonds. However, Pleasanton received quite a bit of money in state bonds. So the local bond money was matched with state bonds, lowering the amount of money needed by the local bonds that were approved by the Pleasanton voters some time ago.

Measure B did have a book of projects that the money would be spend on. The district finished those projects and had extra money left over (because of state bond money). Instead of not issuing more local bonds (and saving the Pleasanton property owners some money), the district started to spend the leftover bond money on projects that were not in the original voted upon project list. I guess the district felt they were entitled to that money.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 23, 2011 at 7:53 pm

@Boner, All the funds were spent on school upgrades (I don't have a list of the specific projects at each site). The payback is through taxes (Measures A and B bonds) approved by Pleasanton voters. Cash-out financings extended and/or increased the debt for taxpayers without a vote. Originally, Measure A was for $85 million; Measure B was for $70 million; the cash-out refinancing extended the debt payout to 2025.

Then attorney general Jerry Brown determined cash-out refinancing is unconstitutional. It isn't likely any entity will use this financing scheme again.

Did they know . . . maybe. Many districts did cash-out refinancings; very few have interested citizens that have pushed long and hard for the answers we are now getting in Pleasanton. The recommended best practices and changes in the governance team will hopefully change the past culture.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 23, 2011 at 8:00 pm

Stacey, We don't know if overruns from Measure A projects were paid with Measure B, and Measure B did not list the Measure A schools.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on Aug 24, 2011 at 8:00 am

Kathleen,

So really as of now we really do not know the total amount of the expenditures? Should be a maximum of 155 million? Shouldn't the people involved in this be held accountable for their actions?

I honestly believe this is one of the biggest issues facing us in that politicans and trusted officials commit us, the taxpayers, to debt knowing that they will not be around nor held accountable once the bill comes due. Just in little Pleasanton we now have an unfunded 280 million pension deficit, an unknown mandate by our recent council to move our CO2 emission back to 1990 levels and now this one. Someone needs to be accountable for bad decisions other than the taxpayers.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 9:20 am

The consultant showed us what was spent at each school, but not how much for each particular project at each school. So if classrooms were renovated and a new multi-pupose room built, we know the total, but not the breakdown for each.

IMHO, the last thing PUSD needs is another lawsuit. Also, I believe the limitation on when Pleasanton could seek restitution has passed. Most of those "representing" taxpayers in Pleasanton have since retired or left the board.

We were given a lot of materials. Here is a link to the first data: Web Link You can find more at the home page www.pleasanton.k12.ca.us Just scroll down to the section on bonds. They have not yet posted the best practices being recommended to the board at their September 13 meeting. It's complicated--seems like we still owe about $80ish million, but the payback is based on property tax growth of 4% a year. :0/


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Posted by Brian
a resident of Another Pleasanton neighborhood
on Aug 24, 2011 at 12:05 pm

Kathleen

I believe you are in error when you say that the cash out refinancing extended debt payout to 2025. The GFS report shows that the original bond measures would have been paid off by 2025. After refinancing, the debt will be paid off by 2023.

Refinancing has resulted in steadily rising payments between 2004 and 2013 relative to the original bond measures, peaking in 2013 at ~50% higher payments than the original bond measures would have been. After 2014, there will be a dramatic drop in payments with payments ~50% lower between 2015 and 2023 than what would have been the case with the original bonds.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on Aug 24, 2011 at 12:50 pm

Kathleen,

A couple of points I want to make I guess. First, our elected officials both council and school board continue to make poor decisions which leave long lasting impact on the taxpayers. Realizing that many of the people on both boards are completely lacking in business experience and have to rely on "expert consultants" there still needs to be some level of corporate compliance otherwise there are absolutely no checks and balances. I can list a few poor decisions based on inexperience but there are others, 2 failed parcel tax measures which were pushed forward when the PUSC paid consultants said would fail cost around $750,000, Unfunded pension liabilities approaching say $200,000,000, our recent CO2 mandate or plan and there is no monetary number attached to that one at all and there really should be because I will bet that mandate will cost residents significantly more than $200,000,000 in increased water, electricity, etc. rates as well as the city will want to add staff for the "audits", lost lawsuits cost who knows how much, and now we have the "misuse" of tax payer funds. Someone must be held personally accountable for these terrible decisions which are impacting our futures in this city. Either we need to put qualified people on these councils and boards or we need to remove their power to enter into financial agreements without the consent of the shareholders and in this case the shareholders should be the voters and only after a detailed independent financial analysis is made.

My second point is that after having looked at your attachment and reading what has been written there has got to be more information related to the projects undertaken, completed, bid process, etc. The city should have an asset record for any expenditure over $1,000 or whatever threshold established if for no other reason than depreciation. Something is really amiss here if they do not have this information (I suspect that know everything) and more importantly or troubling if they refuse to release the information because that means something is terribly amiss here.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 2:09 pm

Boner, I'd be the last to argue with you about the "feed me Seymour" (Little Shop of Horrors) approach of government.

First, these bonds are the school district's, not the city's. Second, the information is available and can be requested (there are laws about public information requests). The committee's charge and the scope of work for the consultant was limited. The goal was to find clarity on what happened, to support or refute concerns of citizens (all parents or former parents of PUSD students), and to prevent the past practices from recurring. The actual charge to the committee is on the agenda. I think even the most vocal of those in the group were satisfied with the outcome, albeit despite some frustrations. Committee members, the consultant, and the public will be allowed to speak on the topic September 13.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 2:27 pm

Brian, Sorry, you're right. The lower payments will be great if every property owners stays put until 2023. There is a concern about the assumption of 4% growth per year in property values. It's not clear to me what will have to change if the growth in value isn't realized.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on Aug 24, 2011 at 3:08 pm

Kathleen,

don't for a minute think that I am being critical of you because that is not the case and I appreciate your being involved on this as well as the informative discussion I enjoyed during the parcel tax discussion.

My only point is that as a city we are losing revenue and at the same time that is going on our city council and our school board are just wasting money and not controlling the expenditures of money which has been approved. If these people are going to run for office they have to be accountable for what they have and the decisions they make as well as their predesors otherwise we have this George Bush, Bill Clinton, Jimmy Carter did it think where nothing get corrected. At some point someone or someone's are going to get sued personally for these decisions and it will be very unfortunate. In order to protect against that my suggestion would be a complete financial impact report and review before improving any legislation.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 3:43 pm

Boner, No worries; I was agreeing with you.


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Posted by Phillip
a resident of Mission Park
on Aug 24, 2011 at 3:58 pm

Yep, if I were a school board member that's what I'd want. An advisory committee made up of steve, arnold, kathleen, stacey and other right-wing loonies. I'd reserve for them the phone booth at the Arco station as a meeting place.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 5:04 pm

Phillip, It was three meetings and the group worked with a consultant who will recommend best practices based on their expertise, not the committee members' experience. Hardly a right wing group. Fiscal transparency isn't onerous. Taxation is an oddity where you pay the bill based on all kinds of variables and then have to request a statement to know whether it was accurate. In the case of the bonds, the variables were changing without the agreement of those paying.


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Posted by Phillip
a resident of Mission Park
on Aug 24, 2011 at 7:09 pm

Yes, I'm certain the committee is there only to help the board do its job. As the article suggests, it must be thrilled to have to deal with the right-wing nutjobs.


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Posted by Mary
a resident of Country Fair
on Aug 24, 2011 at 8:01 pm

Phillip,

You lost all serious consideration when you use names "right-wing nutjobs?" Come on use your words if you want ot be taken serious. Ok back to the adult conversation.


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Posted by Sandra
a resident of Another Pleasanton neighborhood
on Aug 24, 2011 at 8:42 pm

Thank you PW for finally acknowledging that the actions of PUSD were, in fact, illegal. And it appears there are still numerous questions about exactly how and where the additional money was used. Additionally it seems there is an earnest and ongoing effort to plaster over those cracks before any more of the flaws in the structure are exposed.

I agree with the posters above that have stated that government entities in general, and the PUSD in particular suffer from a crisis of confidence and credibility. And the primary reason is that most responsible for questionably, and at least in this case, outright illegal activities are not held accountable for their actions.

At minimum the district should adopt a policy of FULL financial transparency to the public and create a committee of independent citizens to oversee the financial audits. Failing to do so continues the legacy of the district's questionable past.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 24, 2011 at 10:53 pm

Sandra, I don't think staff is trying to hide anything. They have worked with concerned citizens to clear up bad past practices. There were over 200 districts who were advised to do cash out refinancings. That's not to say this was acceptable, but with new policies in place, I would hope this leadership team will regain the community's confidence.

I personally would not support a citizen's committee to oversee financial audits (although there was a suggestion for the Measure B bond oversight committee to be reinstated). Audits are reported to the board and are available to the public.

Phillip, Yes, please don't bother posting, at least not with all the name calling. I think you can take exception to what is said by others without it and maybe even make a point worth considering.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 25, 2011 at 7:14 am

It was just a suggestion for a polite exchange of ideas, "Phillip." Thanks for tipping your hand.


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Posted by Phillip
a resident of Mission Park
on Aug 25, 2011 at 7:29 am

Ok, thanks Mom.

Ever notice how some of the world's most aggressive cultures are also the most "polite?" Kindly please step aside thank you while my crew of right-wing know-nothings try to get involved with your kids and their teachers.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on Aug 25, 2011 at 8:17 am

Kathleen,

It would be possible to put restrictions on politicans in terms of how much $ or debt they are authorized to commit taxpayers without it going before the voters. If you consider the stakes and what is involved here it would be good protection for the voters as well as for the elected officials. Some of these union contracts, dependent upon the duration, commit taxpayers to millions if not hundreds of millions of dollars worth of debt. Just a thought but things are pretty much of a mess right now and in my view due to lack of knowledge and accountability.


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Posted by Jake
a resident of Ironwood
on Aug 25, 2011 at 8:41 am

Yes, Boner is right. We need to place restrictions on politicians who are in the back pockets of the corrupt unions. We can't vote them out but we can sure kick up a fuss. What these corrupt unions don't realize is that we're their boss, and we pay them. They are unsustainable and as unfunded liabilities they are acting irresponsibly and unaccountably with our money. One restriction would be to fire the politicians, just like in the private sector. Unless they can show they're bringing the taxpayer profits in a value-additive way, they should be eliminated. This is why public education is such a scam. There is no profit in it. My taxpayer money doesn't go to my son's classroom where he's repeating fourth grade for the third time because of bad teachers. Rather, the money is fungible and goes to other areas, like teacher salaries and pensions. There needs to be language specific enough so that my kid gets the tax money being squeezed from my pocket.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 25, 2011 at 10:23 am

Phillip/Jake, Even teachers need to know, for themselves and their students' education, that the district is spending its funds responsibly. That requires transparency.

Boner, For the bonds, there are constitutional limitations that a few in the bond business determined they could loophole their way past and they recommended them to, my guess, unsuspecting/less diligent(?) school districts.

All the accounting right now is: the district got X, and the district spent exactly that X. It is what is expected/required. How we get that process to mean more to the taxpayer is a challenge. If you are happy with your child's teacher, you're happy; if you're happy with the school, you're really happy; if your children have graduated, maybe you're happy knowing parents are happy. If you express concern or seek in depth data, well, you must be a nutcase, and a right-wing one at that.

So while we talk about changing the culture and practices at the district, can/should we get the community to participate on a more regular basis and not just when there is a request for more funding? There is a lot of focus on this now and many communities are far more engaged at all levels. I hope the interest remains if we find ourselves out of the hole.

PUSD once had that trust and I really do believe the current leadership is working to reestablish it.


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Posted by Sandra
a resident of Another Pleasanton neighborhood
on Aug 26, 2011 at 1:01 am

I don't understand why education professionals are so opposed to sharing detailed operational expenses and object so vehemently to any suggestion of oversight. If there is nothing to hide it shouldn't present a problem. Right?


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Posted by Fred
a resident of Apperson Ridge
on Aug 26, 2011 at 6:05 am

@ "I don't understand why education professionals are so opposed to sharing detailed operational expenses and object so vehemently to any suggestion of oversight."

Yeah, I know. Who WOULDN'T want a bunch of uneducated right-wing dummies overeseeing them? Teacher: Let's see, should I give Sandy a C or a D? Oh, I know, I'll ask the oversight committee which knows better than I do.


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Posted by Kathleen Ruegsegger
a resident of Vintage Hills Elementary School
on Aug 26, 2011 at 8:16 am

Sandra, For certain things, like the bonds, citizen oversight is the law. All financial transactions should be explained fully in the presentations to the board. There are districts that do thorough reviews. What I have seen is that with the data readily available to the public, there are fewer questions and greater trust.

I'm sure Fred/Jake/Phillip knows that grades and student information are not available to the public for obvious reasons, as is also true for everything except salary and benefits from personnel files. After that, pretty much every piece of paper is within the realm of public information.


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Posted by Sandra
a resident of Another Pleasanton neighborhood
on Aug 26, 2011 at 8:32 am

Financial oversight of district operations is a far cry from the day to day decisions made by teachers in the classroom Fred. But your comment does serve well do illustrate my point. The business of education has a fiefdom mentality that starts at the classroom level and permeates up through all levels of operations. Tenure fortifies this position at the classroom level, but those protections are not extended to administration.

Bottom line is that the public has the right to know how their money is spent. That may offend your sense of independence and control Fred, but if you wish to stay in the business of education I suggest you get used to the scrutiny. It's a trend that will likely advance in the years to come.


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Posted by steve
a resident of Parkside
on Aug 26, 2011 at 8:57 am

Fred, those so-called uneducated right-wing dummies are paying your salary and benefits. Show some respect. Your response is typical of the responses we taxpayers have come to expect from the unaccountable public sector. No doubt your attitude will help you garner lots more support for whatever your cause is.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Aug 26, 2011 at 11:03 am

Stacey is a registered user.

Fred is being disingenuous. Employee unions also like to have access to such detailed operational expenses.

Sandra, why shouldn't classrooms be little fiefdoms? They're at the end of the value chain. What would the business of education be without what goes on inside the classroom?


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Aug 26, 2011 at 11:09 am

Stacey is a registered user.

Speaking of fiefdoms and transparency issues, this is how our wonderful California Assembly operates. Web Link


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