Comments on: The right way, the wrong way, and the Poway of school bond financing

By: Chris Cruse

Chris Cruse — Thu, 23 Aug 2012 18:13:42 +0000

Wayne, the people who voted for and have to pay for the bonds are in a SFID (school facilities improvement district). The SFID includes all of the city of Poway and the older housing areas in nearby communities that are not in a Mello-Roos district. These areas are already developed. Poway leaders have repeatedly proclaimed that the city is nearly built out. Census data shows that the City of Poway lost population from 2000-2010. Nevertheless, PUSD projected 5-8% growth in assessed valuation in the SFID for the first seven years after the bond was passed. San Diego County Taxpayers Assoc endorsed the bond measure, even with the wild growth in assessed valuation projections.

In 2006, before the housing meltdown, Poway had already issued a CAB bond under Prop U. The $3 million bond was due in 2031 and could not be refinanced. Folks in the PSID will have to pay back around $19 million for that. That is more than 6-to-1.
So PUSD was already doing CAB bonds BEFORE they went back to the voters and asked them to approve the second school bond, Prop C. But they never mentioned the possibility of having to pay back Prop C with CAB bonds to the voter, although now they are saying they told SDCTA that is what they planned to do.

By: Rex The Wonder Dog!

Rex The Wonder Dog! — Thu, 09 Aug 2012 21:43:25 +0000

Lou Dobbs had it on FBC yesterday. Kept calling Pow-way, Poe-way 🙂

By: Wayne Lusvardi

Wayne Lusvardi — Thu, 09 Aug 2012 19:17:46 +0000

From Fox Business News:

The San Diego Unified School district borrowed $164 million up front, but will owe a whopping $1.3 billion at the end of its long-term bond. Oceanside Unified sold a $30 million bond, but will owe nearly ten times as much decades later, $280 million total. And Escondido Union School District likewise borrowed $27 million and will owe $247 million total. The bonds are a “kick the can” move to avoid dinging taxpayers now with higher property taxes. Oh, and the bonds are not callable — they can’t be paid off early or refinanced.

By: Wayne Lusvardi

Wayne Lusvardi — Thu, 09 Aug 2012 19:17:17 +0000

Mike
The boundaries of the Poway School District and the City of Poway are not the same.

Poway School district has 33,000 students but City of Poway only has about 48,000 population.

Poway School District serves many surrounding cities and unincorporated areas. Those areas may have more land for future growth and development.

But this economic recession – it is really a “managed depression – is probably going to last a long while — maybe as long as 2032 for real estate. California’s anti-urban sprawl law – SB 375 – also will divert new development into “blue” coastal cities not inland areas like Poway. So Poway could be stranded with debt.

By: Mike

Mike — Thu, 09 Aug 2012 16:48:29 +0000

I am a poway resident. I have a two year old! This bill will definitely hit home. I am sure these board members made this deal because they are such real estate experts. They figured poway will definitely grow and absorb these costs… Poway will double in value!!! …. Well I got news for you.. Poway is out of land!! And developing anything is very difficult… Let alone in the high fire zones that they probably see future expansion..And with 30% of poway still underwater on there mortgage I foresee forclosures hold values down for at least another 7 years.. It seems to me chapter 9 needs to happen now!!! Before this high intrest rate spirals out of control and we will be negotiating a intrest rate on 1 billion instead of 150 million…

By: Vince Peterson

Vince Peterson — Thu, 09 Aug 2012 05:25:03 +0000

I live in Poway.

Excellent coverage of this disaster. But I wish in all the coverage reporters would start naming the school board trustees who foisted this debacle on residents.

The measure was approved by the trustees in November 2007 to be placed on the ballot in Feb 2008. The trustees at that time were: President – Jeff Mangum, trustees Linda Vanderveen, Penny Rantfle, Andy Patapow and Todd Gutschow.

It is worth noting Jeff Mangum is now running for poway city council. Vanderveen and Patapow are running for reelection to the school board. The only running any of them should be doing is to avoid being tarred and feathered.

By: Rex The Wonder Dog!

Rex The Wonder Dog! — Thu, 09 Aug 2012 01:32:41 +0000

The stoopidity of this deal is just mind boggling, even for idiots who work in gov.

A $105 million deal with $1 billion in interest…..the school board should be recalled, and IMO charged with fraud.

By: Steve Rider

Steve Rider — Wed, 08 Aug 2012 23:44:47 +0000

A classic example of politicians kicking the problem down the road. By the time the payments start kicking in, the elected officials that setup this deal will be long gone. Literally passing debt to our children. Unfortunately this is all too common.

By: Rex The Wonder Dog!

Rex The Wonder Dog! — Wed, 08 Aug 2012 21:30:15 +0000

In a Chpt 9 muni BK there is no selling off of assets. Real property never gets liquidated-it is exempt. Bondholders will get nothing

By: Wayne Lusvardi

Wayne Lusvardi — Wed, 08 Aug 2012 21:20:06 +0000

I should have added that such a financing scheme is ripe for a future declaration of bankruptcy and sticking bondholders with the loss. But what if the bondholders end up owning all those school facilities and the land?