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:
Voters may be asked to decide how to spend money
Chula Vista’s Taxes May Skyrocket To Fund Bond Measures For Infrastructure, Schools
School board considering another bond
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:
Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools
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.
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“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. ”
This is quite a statement to make with zero documentation to back it up. It would be good to have some details to back up your opinion.
Tim I have to agree with Bill on this statement. I was on the Sweetwater Union High School District Bond Oversight Committee from 2009-13. We had no authority other than to review spending after the fact. The district paid no attention to our concerns of contractor change orders and cost overruns. They would not provide us with detailed financials, always blaming the districts antiquated accounting system. We made repeated requests for more detail on expenditures and we received delayed or no responses. My experience was exactly as Bill described.
Unfortunately, due to greed and corruption, there has to be oversight on those that make the decision to spend these funds. Oh, dies that mean the old board if trustees at Sweetwater Union High District?
Typically, any debtor who borrows money including bonds will pay 3 times the face value of the bond in interest5 to Wall Street or even more. When will these city entities wise up and start their own public bank to pay for infrastructure in which case all the interest would be paid back to the City of Chula Vista instead of leaving for Wall Street. Have these guys learned nothing from Occupy Wall Street, Bernie Sanders, Elizabeth Warren and Ellen Brown?
I find it difficult to believe that all these entities are under the impression that the public is going to fund up to five bond measures when we are already paying real estate taxes, Mello-Roos and several bond already.
So–is each of them thinking they need to make the best case, so their bond measure “wins”?
We the public need much greater controls over how these bond monies are spent. We also need control over how Mello-Roos funds are spent, because that is one enormous mystery. Or perhaps it would be better to call the situation a House of Horrors insofar as the accounting (at least for Sweetwater Union High School District) has been completely without rhyme or reason for decades. This sort of sloppiness, lack or professionalism and contempt for the public must end.
The campaigns to pass all the past and current school bonds were financed by construction company bosses whose main interest was to fill their coffers. We all now know that those crooked bosses and the board members eventually were convicted.The loss to the students, the teachers, and the taxpayers was in the tens of millions of dollars. Because of their corruption,construction costs sky rocketed and school improvement goals fell short of those promised to the public during the bond election. Now it’s the union bosses who are behind the drive to place OVER ONE BILLION DOLLARS in school bonds on the ballot. They propose to do work that should have been done with the previous bond money. Sadly they are using the students and teachers to sell them to the public. Don’t be fooled, JUST SAY NO MORE.
School maintenance, repair, construction and “infrastructure” bonds are one huge money shuffle. The shuffle starts when someone decides to run for a school board. They quickly find that to do so they will need money, and that the only regularly available source of school board campaign funds are from contractors who specialize in school construction. The contractors fund the school board candidates campaign, with the quid pro quo that once in office, the school board member will author and/or support new school construction bonds earmarked to go to the contractors who helped them get elected.
If you don’t want to help subsidize this kind of money shuffle, simply vote no on any future school bond initiatives. If you’re not sure, and think that perhaps schools are not getting enough money to pay salaries and maintain the schools, take a close look at your own property bills. See how much of you own property tax money is already going to the school districts for previously approved school construction bonds, then vote no.
Don, thank you for writing this article and exposing the misuse, abuse, and corruption regarding the people who fund the election campaigns of school board members and school bonds. The financial reports in the Registrar of Voters Office will show that the campaigns of previous board members and bond elections for Southwestern College, Sweetwater, San Ysidro and Chula Vista School Districts were heavily funded by the construction bosses and those associated with their companies. That group was eventually indicted and convicted. If you check the financial reports for the new school board elections, I venture to say that the construction bosses’/companies’ investment of manpower and money on their campaigns was replaced by that of the union bosses who have now been paid off by securing Public Labor Agreements(PLA). Surely they will also want a BIG pot of money, so for that reason they will make a big push for a new round of school bond elections AND ALL IN THE NAME OF THE KIDS. Don’t take for granted that the public will see through all of this and vote against more bonds. Especially after the union bosses and their organizations pay for a media blitz ABOUT HOW BAD THE KIDS NEED THE “IMPROVEMENTS”
Don’t misunderstand me, I support unions to protect the employees from capricious and abusive administrators and to promote/enforce appropriate working environments, but I don’t support any bureaucracy/organization who wants to shortchange the students and the hard working employees who work directly with them.