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City Council Agrees – PUSD is broke

Original post made by tax revolt 2, Country Fair, on Apr 23, 2009

The City Council voted 4-0 confirming that PUSD can’t 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 it’s annual debt payment.

What made matters worse, is that discussion of this item at Tuesday’s 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 Pleasanton’s 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 can’t 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 that’s done. Recall PUSD Trustees starting with Mr. Kernan.

Comments (5)

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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 24, 2009 at 8:20 am

Stacey is a registered user.

I didn't have a real opinion on the City loaning money to PUSD, but I wonder why the District can't just sell the Neal property to pay off their debt?

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Posted by Phil
a resident of Bordeaux Estates
on Apr 24, 2009 at 8:41 am

This is good coverage of this event.

Stacey does it seem wise to sell a future school site if the housing cap is about to be overturned. Build more houses on that site and a few thousand more elsewhere in Pleasanton and were do the kids will go to school. With the shortage of sports fields where will all of those new teams play?

I would be willing to bet that Signature properties would be happy to take that site off the districts hands in exchange for the legal fees. Gee do you think that was the plan all along???

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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 24, 2009 at 8:45 am

Stacey is a registered user.


Then why did the District never build the school? Why did they sell Sycamore then?

If houses get built on the Neal site, voila, there's developer fees.

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Posted by Scott Walsh
a resident of Pleasanton Valley
on Apr 24, 2009 at 9:03 am

We do not need more houses right now because develoment fees aren't sustained--we need a variety of "sustained" revenue streams to counteract the "bad times". Hotel tax, property tax is down, new busineeses coming to Pleasanton are few. The City Economic Team should be working in "overdrive" right now coming up with new innovative ideas. As I understand it, they, Pam Ott and folks are also "Special projects" people. Other cities are out-recruiting us for those new businesses who are looking for a place to settle. Then we also shoot ourselves in the foot with referendums and lawsuits. Go figure.

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Posted by John
a resident of Birdland
on Apr 24, 2009 at 4:46 pm

Try to build anything and the people of Pleasanton will start to cry about growth, traffic, and everything else. School dist. sells the land to help with funds and everyone will say no we do not want more homes. Yet they do not want a parcel tax. Seems to me like the school dist. and the city can't win in this town. If you think that people are not trying as hard as they can then you do not know these people.

Sorry, but further commenting on this topic has been closed.

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