By William Richter / Focus On Chula Vista
Do you smell that? Do you smell something that smells like fertilizer? You should. It’s the smell that bonds put out and the city of Chula Vista, Sweetwater Union High School District (“SUHSD”) and Southwestern College (“SWC”) are all testing the water to see if the time is right to issue new bonds:
Cities and school districts have been waiting for years to propose new bonds. They couldn’t propose them while we were in a recession but as the economy improves so do the chances for bonds to be approved by voters.
Bonds are basically huge loans which are advertised as needed to repair crucial infrastructure or build new construction but are, unfortunately, often misspent. Some misspending comes from gold-plated projects, and/or contractors who are able to change the costs easily after they get the contract. Regrettably, there is no accountability for the misspending after the money has already been spent and the elected officials have already moved on.
Scare tactics, guilt-trips and worse-case scenarios are usually used to manipulate voters into approving the new bonds. You do care about children, don’t you? If you did, how could you allow our future generations to study in such decrepit conditions? Often, the very same people who will get the contracts are the ones who pay for the marketing of the new bonds.
Once a bond has been approved, there isn’t much that residents can do to assure that the money will be spent wisely. Bond oversight committees are usually put in place but are fraught with deficiencies and usually lack any real power to control the process. It’s common for good oversight committees to be ignored. Transparency is also usually an afterthought and contractors will do what contractors do best: pad their invoices and perpetually issue cost overruns that are rubber-stamped because administrators don’t know how to say no.
What Are Bonds?
Pure and simple, bonds are loans that government entities (like cities and school districts) take out that taxpayers pay via their property taxes. These loans are usually needed because the entity would like to have new construction or remodel old infrastructure. Once the bonds have been approved by voters, residents pay for these bonds (with added interest) for decades to come.
Think of bonds as second mortgages or home lines of credit. Bonds will continue to be a monkey on the residents’ backs years way after the money borrowed has been spent. For example, take a look at a school district in San Diego that is paying $1 billion in interest for $100 million in borrowing:
Closer to home, here is one example of the bonds currently being paid by homeowners in Chula Vista. If you own a home, you will see it in your property tax bill. If you rent a home, you will be paying for it via your rent payment.
As can be seen, the bonds are from some of the very same entities that are coming around now with their hand extended begging for more: SUHSD and SWC. Note that these taxes are in addition to the regular property taxes paid to the County as well as any Mello Roos that the resident may still owe on their property.
These are the current bonds listed on the property tax roll:
Bond Name Year Approved Amount* Entity
Prop AA 2000 $89M SWC
Original Proposal: http://www.smartvoter.org/2000/11/07/ca/sd/meas/AA/
Prop BB 2000 $187M SUHSD
Original Proposal: http://www.smartvoter.org/2000/11/07/ca/sd/meas/BB/
Prop JJ 1998 $95M CVESD
Prop O 2006 $644M SUHSD
Original Proposal: http://www.smartvoter.org/2006/11/07/ca/sd/prop/O/
Prop R 2008 $389M SWC
Original Proposal: http://www.smartvoter.org/2008/11/04/ca/sd/prop/R/
Total: $1.4 Billion
(this does not include interest and it is still being paid by residents)
*Some observations of these numbers:
- There is, still, a total of over $1.4 billion of debt that is still owed
- CVESD borrowed $95 million in 1998 (the smallest amount), in 2016, we’re still paying that debt and in 2012, they passed another $90 M bond (Proposition E)
- SWC and SUHSD each borrowed over half a billion dollars.
William Richter is a Chula Vista resident, community advocate, and former commissioner on the Charter Review and Districting commissions. He has served on various nonprofit boards and currently volunteers his time helping his neighborhood in Rancho del Rey. He also writes at Focus on Chula Vista. This article was edited to combine two parts of this “Bonds Are Like Manure,” which will be a five-part series.