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	<title>routine maintenance &#8211; CalWatchdog.com</title>
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		<title>School bond problems go far beyond LAUSD purchase of iPads</title>
		<link>https://calwatchdog.com/2015/02/03/bond-problems-go-far-beyond-lausd-purchase-of-ipads/</link>
		
		<dc:creator><![CDATA[Chris Reed]]></dc:creator>
		<pubDate>Tue, 03 Feb 2015 19:00:41 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[Corruption]]></category>
		<category><![CDATA[Education]]></category>
		<category><![CDATA[Inside Government]]></category>
		<category><![CDATA[News Media]]></category>
		<category><![CDATA[Regulations]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Waste, Fraud, and Abuse]]></category>
		<category><![CDATA[Los Angeles Unified]]></category>
		<category><![CDATA[routine maintenance]]></category>
		<category><![CDATA[teacher pay]]></category>
		<category><![CDATA[bond scams]]></category>
		<category><![CDATA[30-year borrowing]]></category>
		<category><![CDATA[capital appreciation bonds]]></category>
		<category><![CDATA[CFT]]></category>
		<category><![CDATA[teacher union power]]></category>
		<category><![CDATA[Chris Reed]]></category>
		<category><![CDATA[John DeBeck]]></category>
		<category><![CDATA[CTA]]></category>
		<category><![CDATA[George Skelton]]></category>
		<category><![CDATA[iPads]]></category>
		<category><![CDATA[LAUSD]]></category>
		<guid isPermaLink="false">http://calwatchdog.com/?p=73274</guid>

					<description><![CDATA[Gov. Jerry Brown&#8217;s skepticism about state assistance for local school districts&#8217; construction projects appears to be primarily based on an intense disdain for adding more billions to what he likes]]></description>
										<content:encoded><![CDATA[<p><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-69496" src="http://calwatchdog.com/wp-content/uploads/2014/10/Los-Angeles-Unified-School-District-LAUSD.png" alt="Los Angeles Unified School District, LAUSD" width="300" height="300" align="right" hspace="20" srcset="https://calwatchdog.com/wp-content/uploads/2014/10/Los-Angeles-Unified-School-District-LAUSD.png 300w, https://calwatchdog.com/wp-content/uploads/2014/10/Los-Angeles-Unified-School-District-LAUSD-219x220.png 219w" sizes="(max-width: 300px) 100vw, 300px" />Gov. Jerry Brown&#8217;s skepticism about state assistance for local school districts&#8217; construction projects appears to be primarily based on an intense disdain for adding more billions to what he likes to call the state&#8217;s &#8220;wall of debt.&#8221;</p>
<p>But a counter narrative is emerging that suggests the real problem is that all school districts are being unfairly tarred with skepticism over their bonds because of high-profile problems that Los Angeles Unified has had with its use of $1.3 billion in bond funds to buy iPads and laptops. George Skelton&#8217;s <a href="http://www.latimes.com/local/politics/la-me-cap-school-bonds-20150202-column.html?track=rss" target="_blank" rel="noopener">latest column</a> &#8212; headlined &#8220;Don&#8217;t punish other districts for L.A. Unified&#8217;s problems&#8221; &#8212; makes this case.</p>
<p>However, those who pay attention to education issues (and/or Cal Watchdog) know that there are a wide range of scandals involving school bonds that go far beyond the controversial practice of using borrowed money to purchase short-lived technology. Here&#8217;s a short list:</p>
<p><strong>Capital appreciation bonds</strong></p>
<p>This is from a 2013 L.A. Times story:</p>
<div id="mod-a-body-first-para" class="mod-latarticlesarticletext mod-articletext">
<p><em>Two hundred school districts across California have borrowed billions of dollars using a costly and risky form of financing that has saddled them with staggering debt, according to a Times analysis.</em></p>
<p><em>Schools and community colleges have turned increasingly to so-called capital appreciation bonds in the economic downturn, which depressed property values and made it harder for districts to raise money for new classrooms, auditoriums and sports facilities.</em></p>
<p><em>Unlike conventional shorter-term bonds that require payments to begin immediately, this type of borrowing lets districts postpone the start of payments for decades. Some districts are gambling the economic picture will improve in the decades ahead, with local tax collections increasingly enough to repay the notes.</em></p>
<p><em>CABs, as the bonds are known, allow schools to borrow large sums without violating state or locally imposed caps on property taxes, at least in the short term. But the lengthy delays in repayment increase interest expenses, in some cases to as much as 10 or 20 times the amount borrowed.</em></p>
<p><strong>Shady bond firms</strong></p>
<p>The Orange County Register, also in 2013, had a<a href="http://www.ocregister.com/news/bonds-496091-school-bank.html" target="_blank" rel="noopener"> long analysis</a> piece that pointed out how one Missouri firm orchestrated 60 dubious bond deals as a one-stop shop &#8212; coming up with the financial details, then helping market the proposals to voters. The story noted how this practice ignored state &#8220;laws, rules and guidelines&#8221;:</p>
<p><em>•It is illegal for California school officials to hire political consultants with public funds to help pass bond measures. Using the bank&#8217;s political consultants is not a legal way around that law, according to the state Office of Legislative Counsel.</em></p>
<p><em>•Finance experts advise school districts to sell bonds through public auctions to get the lowest interest rate and to employ independent financial advisers to review the details. Placentia-Yorba Linda, like most of Baum&#8217;s California school clients, did neither.</em></p>
<p><em>•State law requires that donated consulting work on an election be reported as an in-kind, or non-cash, political contribution. Baum did not disclose its consulting role on state campaign filings in three elections the Orange County Register reviewed.</em></p>
<p><strong>Use of 30-year borrowing to pay for maintenance</strong></p>
<p>School districts used to face tough rules on use of borrowed funds, including a requirement that school buses paid for with loans had to last at least 20 years. But as I wrote <a href="http://calwatchdog.com/2012/09/24/what-school-bonds-pay-for-from-san-diego-to-burlingame-the-crime-is-whats-legal/" target="_blank">for Cal Watchdog in 2012</a>, it&#8217;s now common for bond dollars to be used for &#8230;</p>
<p><em>&#8230; the most routine maintenance, such as painting and minor repairs. [San Diego Unified&#8217;s] Proposition Z, on the November ballot, also includes repair funds for schools that just opened five years ago.</em></p>
<p><em><img decoding="async" class="alignnone size-full wp-image-73287" src="http://calwatchdog.com/wp-content/uploads/2015/02/debeck.jpg" alt="debeck" width="104" height="117" align="right" hspace="20" />John DeBeck, a San Diego school board member from 1990-2010, told me using bond funds to supplant operating funds has gotten far more brazen in recent years. He said that bonds could easily be written to make the supplanting of general fund spending with bond fund spending impossible, but that such language was increasingly rare. DeBeck also said bond trickery used to be more likely from district staff, but now it was likely to be cooked up by staff in cahoots with trustees.</em></p>
<p><strong>What motivates bond maneuvers?</strong></p>
<p>DeBeck and several education insiders have told me that the bond shenanigans are driven by political pressure to free up operating funds in the general budget &#8212; pressure from teacher unions seeking higher pay.</p>
<p>This theory is disputed by some school district superintendents. They depict their bond decisions as being driven by unpredictable state financing and say iPads are paid off quickly, not over 30 years.</p>
<p>However, the DeBeck theory is in keeping with <a href="http://calwatchdog.com/2015/01/25/lao-report-hints-school-districts-not-even-trying-to-follow-law/" target="_blank">recent attempts</a> in districts around California to divert Local Control Funding Formula dollars from their intended use &#8212; to specifically help English-learner students &#8212; to teacher compensation.</p>
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		<post-id xmlns="com-wordpress:feed-additions:1">73274</post-id>	</item>
		<item>
		<title>Comic-book villainy on display in San Diego Unified</title>
		<link>https://calwatchdog.com/2013/06/16/comic-book-villainy-on-display-in-san-diego-unified/</link>
					<comments>https://calwatchdog.com/2013/06/16/comic-book-villainy-on-display-in-san-diego-unified/#comments</comments>
		
		<dc:creator><![CDATA[CalWatchdog Staff]]></dc:creator>
		<pubDate>Sun, 16 Jun 2013 13:00:54 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[Education]]></category>
		<category><![CDATA[ACLU]]></category>
		<category><![CDATA[Chris Reed]]></category>
		<category><![CDATA[employee compensation]]></category>
		<category><![CDATA[federal school lunch program]]></category>
		<category><![CDATA[laptops]]></category>
		<category><![CDATA[routine maintenance]]></category>
		<category><![CDATA[San Diego Unified]]></category>
		<category><![CDATA[30-year bonds]]></category>
		<guid isPermaLink="false">http://www.calwatchdog.com/?p=44281</guid>

					<description><![CDATA[June 16, 2013 By Chris Reed It&#8217;s time for a tale of comic-book villainy from San Diego Unified, the state&#8217;s second-largest school district and one in which voracious unions so]]></description>
										<content:encoded><![CDATA[<p>June 16, 2013</p>
<p>By Chris Reed</p>
<p>It&#8217;s time for a tale of comic-book villainy from San Diego Unified, the state&#8217;s second-largest school district and one in which voracious unions so dominate decision-making that a stunning 92 percent of the operating budget goes to employee compensation.</p>
<p>When 11 of every 12 dollars goes to pay and benefit, the squeeze on the rest of the budget is enormous. And so you see students <a href="http://www.10news.com/news/aclu-reminds-parents-of-illegal-school-fees" target="_blank" rel="noopener">forced to pay for educational supplies</a>, in defiance of the California Constitution. And so you see 30-year-bonds used to pay for <a href="http://web.utsandiego.com/news/2012/sep/22/vote-no-on-san-diego-school-bond-it-props-up-a/" target="_blank" rel="noopener">routine maintenance and short-lived electronics</a> like laptops and iPads.</p>
<p>And you see money specifically designated to be used to subsidize school lunches for tens of thousands of students from poor families grabbed for adult employees &#8212; over and over and over.<br />
<img decoding="async" class="alignleft size-full wp-image-42524" alt="san_diego_unified" src="http://www.calwatchdog.com/wp-content/uploads/2013/05/san_diego_unified.jpg" width="250" height="253" align="right" hspace="20" /></p>
<h3>Adult employees 3, poor schoolkids 0</h3>
<p>This is from my <a href="http://www.utsandiego.com/news/2013/jun/15/san-diego-unified-gives-lunch-funds-to-employees/" target="_blank" rel="noopener">U-T San Diego editorial</a>:</p>
<p id="h761101-p1" style="padding-left: 30px;"><em>&#8220;On scams and scandals large and small [in California], the motivation is often protecting the interests of public employees, whether or not it serves the public interest. &#8230;</em></p>
<p id="h761101-p2" style="padding-left: 30px;"><em><span style="font-size: 13px; line-height: 19px;">&#8221; &#8230; when it comes to sheer obnoxiousness, a local example is tough to beat. We refer to the three reports this year of San Diego Unified improperly diverting money to adult employees from school lunch programs meant to help low-income students.</span></em></p>
<p id="h761101-p5" style="padding-left: 30px;"><em>&#8220;In February, a state Senate report blasted the district for improperly taking at least $4.5 million in federal lunch funds to help pay for the salaries and benefits that consume more than 90 percent of the district’s operating budget.</em></p>
<p id="h761101-p6" style="padding-left: 30px;"><em>&#8220;Last month, the state Department of Education demanded a refund of $13.4 million from San Diego Unified because it had used funds from a federally reimbursed state program meant to subsidize lunches for poor children for other purposes, starting with $10.9 million in employee salaries.</em></p>
<p id="h761101-p7" style="padding-left: 30px;"><em>&#8220;Last week, the district announced it would stop using funds that are supposed to subsidize lunches for low-income students to pay for gifts to encourage good “attendance” and other positive behavior by cafeteria workers. About $300,000 had been diverted for that purpose over the past 12 years.</em></p>
<p id="h761101-p8" style="padding-left: 30px;"><em><img loading="lazy" decoding="async" class="alignleft size-full wp-image-44295" alt="nslp_icon" src="http://www.calwatchdog.com/wp-content/uploads/2013/06/nslp_icon.jpg" width="126" height="127" align="right" hspace="20" />&#8220;We suppose this represents progress, because in the first two cases, the school district flatly denies it has done anything wrong — even though the state laid out a lengthy, specific, unrefuted list of district violations in its May 15 letter demanding repayment of the $13.4 million.</em></p>
<p id="h761101-p9" style="padding-left: 30px;"><em>&#8220;Nevertheless, San Diego Unified officials seek to depict these reports as inter-government squabbles over accounting procedures. Instead, they’re more properly seen as a pathetic serial scandal involving a district that repeatedly raids funds meant to help tens of thousands of low-income students so it can give the money to adult employees.&#8221; </em></p>
<h3>Even for California, this is pathetic</h3>
<p>Even by the appallingly low standards of California governance, this is pretty extreme.</p>
<p>San Diego Unified&#8217;s leaders should be ashamed. If they&#8217;re capable of being ashamed.</p>
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		<post-id xmlns="com-wordpress:feed-additions:1">44281</post-id>	</item>
		<item>
		<title>Schools chief who tolerates bond scams wants to float own bond</title>
		<link>https://calwatchdog.com/2012/12/05/schools-chief-who-tolerates-bond-scams-wants-to-float-own-bond/</link>
					<comments>https://calwatchdog.com/2012/12/05/schools-chief-who-tolerates-bond-scams-wants-to-float-own-bond/#comments</comments>
		
		<dc:creator><![CDATA[CalWatchdog Staff]]></dc:creator>
		<pubDate>Wed, 05 Dec 2012 14:30:18 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[Education]]></category>
		<category><![CDATA[Politics and Elections]]></category>
		<category><![CDATA[construction" bonds]]></category>
		<category><![CDATA[Chris Reed]]></category>
		<category><![CDATA[CTA]]></category>
		<category><![CDATA[routine maintenance]]></category>
		<category><![CDATA[school bonds]]></category>
		<category><![CDATA[school financing]]></category>
		<category><![CDATA[Torlakson]]></category>
		<guid isPermaLink="false">http://www.calwatchdog.com/?p=35182</guid>

					<description><![CDATA[Dec. 5, 2012 By Chris Reed The use of 30-year school &#8220;construction&#8221; bonds to pay for routine maintenance and short-lived electronics like laptops is a huge, ongoing, but basically uncovered]]></description>
										<content:encoded><![CDATA[<p>Dec. 5, 2012</p>
<p>By Chris Reed</p>
<p>The use of 30-year school &#8220;construction&#8221; bonds to pay for routine maintenance and short-lived electronics like <a href="http://www.utsandiego.com/news/2012/oct/28/school-bonds-deserve-a-close-look/" target="_blank" rel="noopener">laptops</a> is a huge, ongoing, but basically uncovered scandal in California. Since automatic annual pay raises for most teachers don&#8217;t get suspended when revenue is flat or declining, in many state school districts, California&#8217;s recent budget woes have lead to compensation eating up 90 percent or more of the operating budget.</p>
<p>So what do schools beholden to teachers unions do to cover costs that used to be in the operating budget? They make kids illegally pay for some school-related program, constantly pester parents with fundraising efforts and, oh yeah, use 30-year borrowing to pay for <a href="http://www.calwatchdog.com/2012/09/24/what-school-bonds-pay-for-from-san-diego-to-burlingame-the-crime-is-whats-legal/" target="_blank">basic upkeep and electronics</a> that aid in learning but last two years or less.</p>
<p>How does the state&#8217;s top educator feel about the latter practice? When I interviewed him, he <a href="http://www.utsandiego.com/news/2012/nov/24/state-schools-chief-unbothered-by-abuse-of/" target="_blank" rel="noopener">all but said ho-hum</a>.</p>
<p style="padding-left: 30px;"><em>&#8220;&#8230; state Superintendent of Public Instruction Tom Torlakson expressed more sympathy for the irresponsible officials who engaged in it than for the taxpayers who are brutalized by it. He cited the &#8216;stress&#8217;</em><em> officials faced because of the state’s budget woes and implied it was understandable and reasonable for routine maintenance becoming a &#8216;</em><em>capital improvement&#8217; cost paid for with bonds.</em></p>
<p id="h506028-p5" style="padding-left: 30px;"><em>&#8220;Torlakson declined to offer the slightest criticism of the folly that is 30-year borrowing to pay for products that will be broken in four years or less. His concession to appearances: &#8216;I’ve asked my staff on school construction to look into this and figure out where the line is on what’s eligible.'&#8221;</em></p>
<p>And now what does Torlakson want to do? Float a possibly unaccountable bond <a href="http://latimesblogs.latimes.com/california-politics/2012/12/california-schools-chief-new-bond-measure.html" target="_blank" rel="noopener">of his own</a>, one in the megabillions.</p>
<p>No, it&#8217;s not a case of, &#8220;If you can&#8217;t beat &#8217;em, join &#8217;em.&#8221; Torlakson is all for the scams. It&#8217;s more like, &#8220;Hey, I want a piece of that action!&#8221;</p>
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