No Capital Appreciation Bonds For San Diego, School Board Says
SAN DIEGO (CNS) - The San Diego Unified School District Board of Education does not plan to issue capital appreciation bonds under voter-approved Proposition Z, according to a presentation scheduled to be delivered to the board today.
District financial staff is preparing initial bond issuances allowed by the $2.8 billion ballot measure, which was approved by nearly 62 percent of voters in November.
According to the presentation, general obligation bonds will be offered to pay for the first projects, including a performing arts theater at Patrick Henry High School, facility and technological improvements at charter schools, and roof replacements at various campuses.
Capital appreciation bonds drew criticism last year when it was learned taxpayers in the Poway Unified School District would pay $981 million over 40 years for a bond issue that raised $105 million.
State Superintendent of Public Instruction Tom Torlakson and Treasurer Bill Lockyer recently sent leaders of local districts throughout California a letter asking them to avoid capital appreciation bonds until a law was passed to bring them under control. Some of the debt ratios were 10 to 1, they said.
A bill, co-authored by Assemblymen Ben Hueso, D-San Diego, Marty Block, D-Lemon Grove, Mark Wyland, R-Escondido, and Assemblywoman Joan Buchanan, D-San Ramon, was introduced last month to restrict terms of the bonds.
The SDUSD plans to generate an average of $275 million annually to pay for construction and maintenance projects by issuing bonds every other year until the authorization limit is reached, according to the presentation. It can be viewed online on the district website at sandi.net.
The first bond issue is scheduled to be brought before the Board of Education for approval on Feb. 26. The county Board of Supervisors is scheduled to consider final approval of the issuance next month.