School bond should pay off district loan
By Mischa Dobrotin
I think the Ramona community agreed that we need and have a high quality school system. Good schools graduate knowledgeable students, are an asset to the community, and help to maintain property values. They are also something we can be proud of.
However, the Ramona Unified School District is on the verge of a financial disaster. The problem was created by a prior school board which entered into a certificate of participation (COP) when a previous school bond was rejected by the Ramona community. This COP was for the amount of $25 million and has to be repaid by the school district. Today’s repayment cost is about $34 million and, due to accruing interest, will increase as the years pass by.
This COP was primarily used to construct two schools, and part of the money was used for additional classrooms and other items for the other schools. While it did bring in millions of dollars in matching state funds, it saddled the school district with a formidable debt. With the decline in school enrollment, and a slump in construction, the school district does not now, nor is projected in future years, to have the money to pay off this COP.
Because of this COP, the financial projections for the school district are that the district will run out of money in about three or four years. Should that happen, the state of California may be forced to step in and take over management of the school district.
If that happens, the state will make a loan to the school district on the order of $20 million, but then will immediately set up a recapture plan, under a state representative, whose primary duty will be to recapture the money to repay the state loan. His or her primary concern will not be in the educational aspects, not in the financial condition, wages or other financial aspects of the school system, but rather solely in the recapture of money to repay the state loan. Under this circumstance, the school board, the school superintendent and the entire Ramona community have virtually no say with regard to the financial aspects of the Ramona Unified School District.
We, the Ramona community, can help ensure that we will continue to have our high quality school system by agreeing to pay off the COP.
A bond issue is necessary to raise the money for the repayment of the COP. Restricting the bond issue to the necessary amount to pay off the COP will minimize the cost of the bond issue.
The school board is preparing to ask the Ramona community for a bond issue. They are proposing a partial payment of the COP, with other portions going to various other items such as deferred maintenance.
The complete repayment of the COP should be the objective of the bond issue. Prior bond issues have failed in the Ramona community for various reasons, including vague identification of the uses of the money, and the adding of various nonessential items. If only a partial repayment of the COP is made, it only kicks the problem into future years, after the present school board and school superintendent have retired, bringing the same financial problem right back to the Ramona community.
The Ramona school board can set the uses of the money from the proposed bond issue. If they do not pay off the COP in its entirety, and/or add other large uses for the bond issue money, I feel they will risk another rejected bond issue.
Mischa Dobrotin, a Ramona resident, is a graduate of Ramona Unified School District’s Class of 1951.
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