No CABs for Ramona

By Maureen Robertson

As they campaign for approval of a $66 million school bond on the Nov. 6 ballot, Ramona Unified School District leaders want voters to know they are not contemplating a bond program like the one that has drawn national attention to Poway Unified School District.

In an effort to assure voters that they don’t plan to use capital appreciation bonds (CABs) to finance the proposed school bond, trustees met Tuesday morning to add a paragraph to the district’s business regulations that states CABs should only be pursued if three conditions exist:

1. If it can be demonstrated that their use will result in less debt service than other bond structures or financial alternatives;

2. If the citizens’ bond oversight committee, which will be established if voters approve Proposition R, reviews them; and

3. Defensible assumptions for growth in assessed value are used to develop any proposed financial method.

At issue in Poway Unified is a $105 million CAB that will cost taxpayers a reported $1 billion to repay.

David Ostermann, assistant superintendent of administrative services for the Ramona district, explained during the 10-minute special meeting that, unlike a typical home loan where the borrower pays principal and interest every month, with a CAB, the borrower doesn’t pay principal or interest for a specific time—20 years in Poway’s case. Even though there are no payments for 20 years, interest is accruing, “so that interest bill gets bigger and bigger and bigger.”

Ostermann projects a 2 to 1 debt ratio for Ramona’s proposed bond, noting that the debt ratio for Poway’s is 10 to 1.

San Dieguito Union School District approved a similar resolution last Thursday, Superintendent Robert Graeff told trustees. The San Diego County Taxpayers Association, which Graeff said has endorsed Proposition R, suggested the language used in the resolution, he reported to trustees.

In a 3-0 vote, with trustees Dan Lopez and Rodger Dohm absent, the board approved the resolution.

“We’d like to assure you and the community that if, in fact, the voters approve our bond program in November, it will not look in any way, shape, or form like the program currently at the source of a major controversy in Poway Unified School District,” said Graeff.

Related posts:

  1. County treasurer-tax collector calls for school bond reform
  2. Budget talks turn to school bond for Ramona
  3. Trustees poised to place $60M bond on November ballot
  4. Survey shows support for a school bond
  5. Trustees ask voters for $66 million

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Posted by Maureen Robertson on Aug 22 2012. Filed under News, Ramona. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

5 Comments for “No CABs for Ramona”

  1. Local

    Like anyone in their right mind, would trust the School District. People need to understand, the amount that is Bond is going to raise Property Taxes. As a retired person, living on a fixed income, I cannot afford this increase. This bond must not pass.

  2. MJW

    If you own a home or have business or have a job or are raising a family and would like Ramona to be a sustaining community… vote for the bond. It is one of about one option to keep Ramona on the map and prevent it from becoming a spec of dust. As a former resident and soon to return, I fear for the town of Ramona. If some stimulation from the school district and controlled growth does not occur, who will turn out the lights? Your children or grandchildren? Something to think about…

    • Local

      If this Bond passes, we will not be able to own a home. Seniors and people on fixed incomes cannot affort this. PLEASE

    • sandra j

      The property value argument is ridiculous. No one who can afford to live in Poway is settling on Ramona just because of our schools. We're already near the bottom of the barrel, and that's *with* excellent schools! Our test scores continually rank near the top, and that has not helped retain our values or kept businesses in Ramona. After the financing debacle next door in Poway, families there will be forced to relocate to Ramona just to stay afloat. Don't forget, nearly half of the money from this bond is already spent, and for what? Our district *can* get by on what they have and continue to provide excellent education. They just don't want to.

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