Dear Editor –
Read the article [School Board Discusses Bond for Infrastructure, Nov 17, 2023] about the school district’s $358B General Obligation Bond. Towards the end of the article it stated some of the reasons the Board is proposing such a large bond measure. The article stated that both Santa Monica and Beverly Hills (USDs) have done three bonds in the last 15 years.
With a little digging, I found out that this was not quite true. According to the State’s EdData website, Santa Monica-Monica USD has passed three large GO bonds of $385M in November 2012, then a $485M and a $195M during the November 2018 election. Beverly Hills USD has only passed two GO bonds in the last 15 years, according to Ed Data: It passed a $334M bond in November 2008; a $260M bond FAILED in November 2016 election; and later, voters went on to pass a $385M bond in June 2018.
It really makes me wonder why the Board and its advisers would choose to compare the CCUSD with two of the more higher-valued school districts in LA County as a comparison. According to the LA County Tax Payer’s Guide 2022-23, Beverly Hills USD has almost 2.85 times the assessed valuation (AV) than that of the CCUSD and the Santa Monica-Malibu USD has an assessed valuation of over 4.6 times that of the CCUSD. These perennially Top 10 districts have much higher assessed valuations than ours and they could easily afford to borrow a half-billion dollars or more on their facilities upkeep. Our having much less overall assessment makes it much more costly for local property owners to afford as the Board tries “to keep up with our wealthier neighbors.”
BHUSD – $41.951B
CCUSD – $14.725B
SMMUSD- $69.038B
This is one of the reasons the Board had to choose to impose California’s highest tax rate available ($60) for a unified school district.
I doubt the hired bond adviser will want the Board or district administration to remind local voters during the bond campaign that the district’s latest Unaudited Actuals for 2022-23 shows that we are already paying over $7.1M in annual payments for the other, still-outstanding bonds’ principal totaling $113M in long-term district debt: A $40M bond passed in November 1996, then refinanced in 2005 which will finally be paid off in 2032; also included is three separate bonds issued during the $106M GO bond program between 2014 to 2018 and which will run another twenty to twenty-five years until 2046 thru 2050.
Even if the district were to receive a relatively low 2% average bond interest rate on its $358M bond loan–the average, weekly interest rate is now just under 3.5%–local property owners will be paying well over a half-billion dollars before all these five bonds’ principal and interest are paid off.
With an estimated average annual increase of 4% in our city’s total assessed valuation (actual past 20-year average is 5.6%) and while having to pay $60 per $100K of assessed valuation (the maximum tax rate allowed) our local assessed valuation could quadruple at that rate and local property owners collectively could end up paying an average yearly tax of 24M annually for the next 37 years–totaling nearly $900M by 2061.
The Board’s resolution passed last week legally describes how the $358M bond would be spent and what community oversight would be in place for public accountability. It also states that the district’s annual goal is to collect $22M for the life of the bond. What is missing is that it says nothing about what would happen with excess revenue they would be collect! ($890M collected at the annual $60 tax rate, minus $475M to pay off the latest bond = $415M in excess revenue collection!
If the $60 tax rate were to remain in place throughout the 37-year life of this large bond, what, then, would happen to the over $400M in excess revenue? Where and how would this excess revenue be spent? Could it be set aside and then spent on employee housing?
These and other significant questions need to be addressed and answered before putting this bond measure on the ballot.
George Laase
