Claremont Insider: Lies, Damn Lies, and CUSD Bonds

Wednesday, August 11, 2010

Lies, Damn Lies, and CUSD Bonds

Now that the Claremont Unified School District's bond is set for the November 2 election, we think it's time to pause and consider how the district arrived at their figure of $95 million.

When CUSD last sought a bond, in 2000, it was for $48.9 million. In its bond resolution language for the 2000 bond, the district laid out, school by school, a laundry list of repairs, upgrades, and retrofits that the bond was going to pay for.

This time, however, there is no such list. This lack of specifics is what should worry property owners within the district's boundaries. When the matter came up before CUSD's board of education on July 22, board member Jeff Stark said that the district couldn't give any list until after they approved going forward with the bond. However, the district's own bond resolution from 2000 refutes Stark's claim about the specifics.

You can see the 2000 CUSD bond resolution here and the 2010 resolution here.

The dissembling from Stark is especially telling because Stark was the co-chair on the 2000 bond campaign. It's also not the first misinformation deployed by the district in their current pre-campaign campaign. Remember those two loose wire photos from 2000 and from this year, both from Condit Elementary School?

So where did the $95 million price tag for this year's bond come from? It takes a little digging to find an answer - but not much. Solving the mystery requires only a few mouse clicks.

It turns out, as several readers have pointed out, that the $95 million is just about the limit of the total bonded indebtedness that the district can legally incur, and the law determining the dollar amount is buried within the current bond resolution's language. Section 1 of the resolution said that the CUSD board is acting "pursuant to Education Code Sections 15100 et seq., 15264 et seq., and Government Code Section 53506."

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Section 15106 of the Education Code states:
15106. A unified school district or community college district may issue bonds that, in aggregation with bonds issued pursuant to Section 15270, shall not exceed 2.5 percent of the taxable property of the school district or community college district, or the school facilities improvement district, if applicable, as shown by the last equalized assessment of the county or counties in which the district is located.

So CUSD's total bonded indebtedness is limited to 2.5% of the assessed value of all the property within the school district's boundaries. Now when this came up during at the July 22 school board meeting, Jeff Stark (apparently the voice of authority on the bond issue) claimed it would take a long time to get that information. He seemed to be saying the district had no idea what the assessed valuation was, and no one at the meeting ever mentioned the 2.5% limit.

Despite the district's and Stark's game of hide the ball, one can get a fairly close estimate of the district's indebtedness limit by looking at the total assessed valuation for property within Claremont, a number that's readily available from the Los Angeles County Office of the Assessor's website.

The assessor's report for 2009 on page 16 of the PDF file lists the assessed valuation for the city of Claremont as $3.55 billion. The school district includes a small number of properties in Pomona or in unincorporated county areas, so the assessed valuation for the city will be slightly less than the number CUSD will use for this bond.

2.5% of $3.5 billion is gives you a bond limit of $88.75 million. Then, if you allow for the non-Claremont properties within the district and the 2% adjustment per year Prop. 13 allows, you get pretty close to $95 million.

So the district didn't arrive at that $95 million by looking at how much money it would cost to complete a certain number of projects. Instead, they just figured the maximum they can legally ask for and used that limit for the bond. There is no list of projects because they have no specific ones in mind. They're just maxing out their line of credit with no explanation for where all of that money will go.

If someone were to ask a banker for a business loan and offer no plan for how they were going to use that money, they'd quickly be shown the door. But with this school bond, CUSD expects voters to sign off on just such a loan. Given the district's track record of misspending the last bond, voters would be foolish to buy into the district's intentional misrepresentations about the need for this one, especially when they've started off with some real whoppers before the campaign ever officially began.