San Diego Unified School District board President John Lee Evans will ask his fellow board members to prohibit the use of controversial capital appreciation bonds for the bond measure the district hopes to pass later this year, known as Proposition Z.
The district will ask voters in November whether they approve San Diego Unified borrowing an additional $2.8 billion that will be spent upgrading schools and will also possibly free up money that can be spent on teachers.
San Diego Unified has used capital appreciation bonds several times in the past. In 2010, the district borrowed $164 million from investors using the bonds. That loan will cost taxpayers $1.2 billion to repay.
Evans said he plans to ask the board to limit the district’s bond sales to more traditional bonds, avoiding the exotic financing that the district has previously undertaken and that has proven so controversial for nearby Poway Unified School District.
San Diego Unified came under fire for its bond financing plan this week.
This is from a San Diego County Taxpayers Association press release:
On Tuesday, Channel 10 News Investigative Reporter Mitch Blacher interviewed San Diego Unified School District Superintendent Bill Kowba regarding the District’s $2.8 billion Proposition Z school bond measure. During the interview, Blacher repeatedly questioned Kowba regarding the financing of the proposed bond. The Superintendent shockingly confessed: “We don’t have a financial plan built looking out into the future.”
Nothing in Proposition Z prevents the District from taking on high interest debt which could triple Proposition Z’s cost for taxpayers. Sadly, the District is already using and abusing this type of high-interest financing right now! It was recently reported that San Diego Unified issued a $164 million bond that will cost District taxpayers over $1 billion.
San Diego Unified’s press release had this quote from Evans:
In light of the recent focus on the use of CABs, I want to make the intent of the Board and the policy of the District clear. I am putting forward a resolution that will clearly state that it is the intent of the Board that Proposition Z will not use Capital Appreciation Bonds.
Will Carless is an investigative reporter at Voice of San Diego currently focused on local education. You can reach him at email@example.com or 619.550.5670.
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