By Karen Billing
With San Dieguito Union High School District’s general obligation bond on the November ballot, the district board said it wants to ensure voters that what has recently happened in the Poway Unified School District will not happen in the San Dieguito district. The board acted quickly to approve a new policy about using capital appreciation bonds (CABs) at its Aug. 16 meeting.
Eric Dill, associate superintendent of business, said there has been concern lately with school district bond financing structures using CABs, particularly those with terms greater than 25 years. Long-dated CABs can result in a higher debt burden for general obligation bond issuers than other financing alternatives, as Poway Unified School District recently discovered. Borrowing for the Poway District’s $105 million CAB over 40 years and not making any payments on the debt for 20 years will now cost taxpayers in that district more than $981 million by 2051.
“In reaction to that, we want to make sure we can promise fiscal responsibility and transparency,” said Dill.
The policy uses language cribbed directly from the San Diego County Taxpayers Association to ensure fiscal responsibility and transparency.
The policy states that the district will only pursue the issuance of CABs if it can be demonstrated that their use will result in less debt burden than other bond structures of financial alternatives. Additionally, any issuance has to have the approval of a Citizens Bond Oversight Committee, “no changes made in the dark of night without public knowledge,” Dill said.
The policy also states that the district will use realistic assumptions for growth in assessed values, not “pie in the sky” estimates, Dill said.
Should the bond measure pass, the district will begin upgrading technology and repairing older schools using today’s low interest rates and construction costs and avoid methods that result in unreasonably high interest ratios.
The policy will be on the website for people to easily find the district’s position on CABs.
“Our policies are always front and center on the website where people can find them,” Dill said.
Last week, a kickoff meeting was held for the new group promoting November’s bond, Friends of San Dieguito Schools, Yes on AA. Brad Shoen, a former president of the Torrey Pines High School Foundation, has taken the lead as chair. The group includes nine representatives from each of the district’s school sites.