Thursday, September 11, 2014

If We Build It . . .

First Posted Jan 2014
In regards to CUSD building a Performing Arts Center . . . some in the community optimistically believe: "If we build it they will come!"

In regards to the bond debt (to fund the building of a Performing Arts Center) . . . some in the community also believe: "If we ignore it (the debt) . . . it will simply go away."  

"Hun­dreds of Cali­for­nia school and com­munity col­lege dis­tricts have fin­anced con­struc­tion pro­jects with cap­it­al ap­pre­ci­ation bonds that push re­pay­ment far in­to the fu­ture and ul­ti­mately cost many times what the dis­trict bor­rowed." --Los Angeles Times Nov. 28, 2012

2007: CUSD financed/borrowed $300,983.00 --a portion (or tranche) of the allotted $13.5 million Measure A bond money. The amount assigned to the taxpayer  to "Payback" for this 2007 loan (Capital Appreciation Bond): $840,00.00 (serviced over 9.8 years)

2008: CUSD financed a 2nd portion of the Measure A bond allotment--$2,003,738.00.
The taxpayer  "Payback" for this 2008 loan (CAB):  $10,996,171.00 (serviced over 25 years)


Capital Appreciation Bonds have been a tremendous source of income for someone (or some group of investors) ... but not for the taxpaying citizen of Calaveras County who voted for the Measure A bond.

The voting citizens and community members voted for and approved a "School Repair and Construction Bond" worth (or valued at) $13.5 million. So far, as taxpayers, we are aware that CUSD has financed (or borrowed) $2,304,721.00 (of the $13.5 million) and the taxpayer payback--with interest accrued over time--for that portion of the Measure A bond is $11,836,171.00 (nearly $12 million)

One can only imagine the actual or full "payback" dollar amount for the Measure A bond. The taxpaying citizen, unfortunately, is not aware that they are responsible for all debt accrued (or acumulated) during the financing of the Measure A bond, not just $13.5 million that was approved or allotted.

Simplified Example: 

CUSD borrows $250.00 from Lender: . . . . . . . . . . . . . . . . . . . . . . . . . . $250.00
Lender assesses fees and interest rate over time for $ borrowed:. . . . . . . .$750.00
Lender assigns total value of debt to CUSD for payment: . . . . . . . . . . . . .$1,000.00

CUSD turns and passes bill to Taxpayer for "paypack" . . . . . . . . . . . . . . .$1,000.00

[The Calaveras taxpaying citizen was fully expecting to pay back $250 dollars ... not $1,000.]

The exact figures (or depth of taxpayer bond debt) have yet to be disclosed. A request, however, has been made of the school district to provide an accurate accounting of the Measure A bond debt.

Do not take my word for granted; please follow up or research this information for yourself. Besides being noted or documented in the Los Angeles Times, the figures and dollar amounts mentioned above can also be obtained or viewed by requesting information from the CUSD Director of Fiscal Finances.

Theses figures appear in the budget years 2007 and 2008. The Measure A bond was passed in 2006.

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