Following the School Bond Money Trail
By Ann K. Williams
August 28 -- If the results of a recent poll are right, most Santa Monica and Malibu residents favor spending more money to improve local school facilities.
But say “school bond financing” and watch your listener’s eyes glaze over. Many voters don’t know where bond money comes from and where it ultimately winds up, let alone how the amount of a bond is decided in the first place.
Measure BB is a case in point. The $268 million Santa Monica-Malibu school bond – the fruit of more than a year’s worth of meetings – will be funded by tax monies that will show up on local property tax bills.
But the local measure is not a parcel tax, and it may be augmented by funds from Proposition 1D, which will be funded by the sale of state bonds to investors.
And while the ballot does list how Measure BB money can be spent, plenty of leeway is written into the language.
This ballot is the end process of more than a year of complex political analysis by school officials, board members, consultants and citizen watchdogs who wrestled with the numbers to come up with a figure that will meet school needs, have a chance of passing and can be spent down during the bond’s lifetime.
Back in July, 2005, the district’s Financial Oversight Committee pondered various money-making scenarios under the guidance of Tony Hsieh, Vice President of Piper Jaffray, a financial analyst and consultant to the district. (see story)
Like the rest of the nation, Santa Monica was experiencing a housing “bubble,” and taxes based on assessed value seemed like a good way to maximize the district’s return, Hsieh advised.
Even then, the district had a $514 million total bonding capacity, with $92 million outstanding. A year later, this summer, the district’s bonding capacity exceeds $580 million.
And the money potentially available to the district will grow, Hsieh said.
“You’ll see the paydown in the $92 million as well as the growth in assessed value, so (the difference) just gets wider and wider,” Hsieh said last July.
Had the district wanted, the bond could have been even higher.
“You can authorize more than assessed value supports, banking on assessed value growing,” Hsieh said. “You could always tack on more issues on the end if you wanted to increase bond size value.”
Time was of the essence last summer, as it was already foreseen that the state would put a bond on the fall ballot, making funds available to districts that pass “Proposition 39” bonds in November.
Not only does Measure BB need only 55 percent of the vote to pass, unlike other facility funding measures which need more than two-thirds of the vote, but if the local bond passes, the district can be among the first to apply for a chunk of Proposition 1D state funds.
At the same July 2005 meeting, Allison Kendall of Kendall Planning and Design urged the District to get started on a 20-year Facilities Master Plan process. Not only would the district and the community get a chance to envision their dreams for the area’s schools, if they worked quickly enough, they’d have a working list of proposals for a bond just in time for the November ballot.
Kendall’s accelerated schedule called for “proposals identified in the May-June timeframe, and then the priority setting and then kind of funneling that into a politically reasonable package” by July.
“It’s going to take a lot of people and it’s going to be very expensive,” observed Financial Oversight Committee Chair Paul Silvern.
Indeed, in December, the School Board approved a $1.1 million contract to hire a team of architects and public relations specialists to lead the district’s Facilities Master Plan process which is still underway.
Right on schedule, a series of Facilities Master Plan community meetings -- at which citizens were encouraged to “think big” -- were held through winter and spring of 2006. (see story)
And in June, 2006, a voter survey was unveiled by Richard Bernard of Fairbank, Maslin, Maullin and Associates, another of the district’s consultants, at a meeting of the bond feasibility committee, an expanded version of the already-existing ad hoc facilities master plan committee, led by Craig Hamilton and Gleam Davis. (see story)
Local voters, it seemed, could be counted on to pass a facilities bond as large as $400 million to upgrade bathrooms, fix leaky roofs and remove mold and asbestos from the walls, among other upgrades and renovations.
“Health and safety are a far cry from the big moves that we’ve talked about in the planning meetings,” Silvern said at this meeting.
But the list of rather mundane improvements that the poll showed voters liked best weren’t necessarily all the bond would cover, Bernard pointed out.
“The full bond language will contain a complete list of projects,” Bernard said. “This is not intended to limit what the bond will cover.”
And the full ballot language finally approved by the Board on August 3 does include references to green, energy-efficient building features, to technology updates, to class size reduction, as well as to “joint use agreements,” though these are not specified.
Also undefined are references to “staff training expenses,” “the reduction or retirement of outstanding lease obligations” and “facility assessment reviews.” And the bond’s demand for adherence to the “principles of Collaborative for High Performance Schools” is unlikely to mean much to the uninitiated.
The expenditures, whatever they may ultimately be, will be audited annually and overseen by a citizen’s committee. The bond specifically states that no Measure BB money can be spent on administrators’ salaries.
After discussion, the Board settled on $268 million as the amount not only most likely to be approved by the voters, but also likely to be spent during the bond’s lifetime, which is expected to last no longer than 11 years.
That translates to $30 per $100,000 assessed value on Santa Monica’s citizen’s property tax bills, or $150 for a half-million dollar house. That’s in addition to the Measure S and Y parcel taxes at $225 and $111.63 per parcel, respectively.
Since the draft Facilities Master Plan on record in the District Main Office lists projects totaling approximately $695 million, this fall’s bond, if it passes, will just begin to cover the changes the school community envisions.
In the bond feasibility committee’s June meeting, there was already talk about funding measures down the line.
Measures S and Y will run out in 2009 and 2011, pointed out District Chief Financial Officer Winston Braham.
“We are already working on initiatives for 2008,” added Bernard.
Copyright 1999-2008 surfsantamonica.com. All Rights Reserved.