Modesto City Schools asking for voter support, but doesn’t want to talk?
As we deliberated the merits of Measures E and D, the Modesto City Schools board of trustees did an odd thing. It voted to gag itself.
What is the board worried about? Are new superintendent Sara Noguchi and trustees John Walker, Amy Neumann and Cindy Marks – those most in favor of self-imposed silence – afraid someone might say something too revealing?
Are they worried we’ll ask even more questions about those bond measures on the Nov. 6 ballot? Absolutely.
At an editorial board meeting in September, we asked our guests why two bonds instead of one? After all, both E and D benefit Modesto City Schools Elementary School District; why split them up?
The answer: Combined, the two bonds will generate $131 million.
OK, but why two bonds instead of one? Silence.
Could it be that some of the bonds won’t be sold immediately and could be held for future sale? That’s a fairly common practice (or “trick” if you prefer), according to those who track such things. If sold later, with interest rates rising, will they cost homeowners more?
We asked what, specifically, will the bonds pay for?
We were referred to a binder – 2 inches thick – that details $1 billion in fixes and deferred maintenance across all district facilities. It appears to be the same binder the board used in 2016 when negotiating with teachers over pay raises. The schools were in such bad repair, went the logic, that teachers should take less so the district could do more maintenance.
Instead of a list, many of those projects have been assigned “letter grades” denoting urgency. Which projects got an A? Which ones got Fs? More bluntly, which ones will come first? No answer.
Call it a gag reflex.
Until voters passed Proposition 39 in 2000, school bonds were a much-abused jackpot for bankers and bond-sales firms. New laws limited interest rates, what bonds could be used for, and set up oversight committees. They also require districts to tell voters exactly what they’re getting for the money. Except many don’t.
Adjust your gags, because here’s another question: Are the bonds a good deal?
Modesto City Schools estimates a debt-to-principle ratio of 2.0, meaning the cost to repay them will be 100 percent. The bonds package (city school’s term) will raise $131 million; but property owners will repay $262 million.
There are 106 school bond measures across the state, worth $15.6 billion – including four in Stanislaus County, two in Merced and one each in Ripon and Escalon. The average debt-to-principle ratio is 1.975 but many districts estimate they’ll do better. Palo Alto Unified is borrowing $460 million, and will pay back $805 million – a ratio of 1.75; South Bay Union in San Diego is borrowing $18 million and paying back $31 million, a ratio of 1.72.
If Modesto City Schools got South Bay’s deal, it would be repaying $225 million – a $37 million savings. Even getting the average would save roughly $3 million.
(Atwater is getting the area’s best debt-to-principle ratio at 1.29, followed by Salida at 1.92, Escalon 2.01, Riverbank at 2.03 and Ripon at – gasp! – 2.29.)
Will Modesto’s bonds be sold through competitive bids or negotiated sales (usually resulting in higher costs)? Will the district pay for an unnecessary bond rating? What costs will be rolled into the bonds?
Bond watchdog Richard Michael’s “permanent hobby” is running the California School Bonds Clearinghouse, which makes state data more readable. He got interested when his school district sent around a slick mailer promoting a bond measure.
“I asked the (district’s) chief business officer, ‘Where is the specific list of projects?’ He told me, ‘We don’t have to give you one,’” recounted Michael. “This is what they do. This is why I’m fighting this the way I am.”
San Francisco’s TBWB has run 200 “successful public finance ballot measures that have raised billions in voter-approved revenue,” including the last bond measures for Modesto schools and now Measures E and D.
What a coincidence. That’s the same company that provoked Michael’s anger. Is it also a coincidence we got the same answer (albeit, more politely) from bond proponents?
“If there’s no list, there’s no accountability,” said Michael.
Modesto’s elementary schools desperately need updating. Fifteen are more than 60 years old, four are 70-plus; Wilson School is 89 years old. Problems that didn’t exist when schools were built can be deadly today. Cars and buses crowd entrances, creating danger. In 2014, a kindergartner was killed by a vehicle while leaving school.
What parent wouldn’t chip in to find remedies?
Measure D, would provide $74 million to improve safety, fix leaking roofs, update emergency systems and replace old electrical systems. All are necessary. But why not level with us about exactly which parking lots will be reconfigured, which leaky roofs will be fixed, which electrical systems will be rewired? And what will Measure E pay for? When?
Until the district answers those questions, we’re against these bonds.
What’s that? It’s hard to hear you with that gag in your mouth.
This story was originally published October 5, 2018 at 2:16 PM.