By James R. Riffel, City News Service
San Diego County Treasurer/Tax Collector Dan McAllister proposed legislation Tuesday to bring California’s government and education codes into alignment regarding how school districts issue bonds.
His action comes amid a furor over a capital appreciation bond issued by the Poway Unified School District that will leave taxpayers in that area on the hook for paying back $981 million over 40 years, in exchange for borrowing $105 million to construct school facilities.
“We’re trying to bring some sense and sanity to the issue,” McAllister said.
Among other things, he said his legislation would:
• limit school district bond financing to 25 years;
• require terms to be approved by the county Board of Supervisors, county Superintendent of Schools or a community college district governing board;
• have the superintendent and school board members put in writing their understanding of the interest rate and funding ratio, and that they’ve communicated the figures to their constituents; and
• make sure that districts are able to refinance their debt.
The Poway bond cannot be refinanced or paid off early.
McAllister said other districts have bonds with similar terms to Poway’s, but all of them have an opt-out clause that lets them refinance or pay them off early.
“So I’m disappointed a little bit that that’s not here, because it does lock in, or seems to lock in, the people of that school district for a long time to come,” McAllister said.
He said he sent a letter to the county Office of Education, the primary business official at each of the 42 local school districts and state officials, notifying them of his proposals.
McAllister said he made a presentation last week to local district officials in which he asked them to work with his office earlier in the bonding process, not just when terms are already set in stone. The Treasurer-Tax Collector’s Office helps to administrate school district bonds.
He said he told the districts that debt repayment ratios of greater than 7-to-1 are unacceptable, and Poway’s is more than 9-to-1.
Residents in the district, which includes the city of Poway and the northeastern suburbs of the city of San Diego, blasted members of the Board of Education at a meeting Monday night. The trustees said they continued to back the deal, which they said was within the parameters set by voters in a 2008 election.