Instead of Voting for Endless School Facility Bonds

Author Dawn Urbanek | urbanek@CUSDWatch.com | (949) 547-1540

Links are live at: CUSDWatch: School District Debt Oversight

Documentation:

CUSD Solar Panel Project- Dysfunctional CA

Prop 39 Green Energy Projects Timeline Part 1

Prop 39 Green Energy Projects Timeline Part 2

The video can be viewed at this link:

https://www.youtube.com/watch?v=_h0QXYb5cjY&feature=youtu.be

INSTEAD- Lets fix what's wrong with CUSD so that we can work together FOR OUR CHILDREN AND OUR COMMUNITIES.

The interests of students and taxpayers are not being represented because of the way CUSD chooses to operate. A review of the timeline for the Capistrano Unified School District's Prop 39 Solar Panel Project shows that District Staff applied for $24 million in CREB Bond debt without Board approval.

Staff runs the District. Staff has no fiduciary duty to students or taxpayers, only Trustees who are elected by the people have a fiduciary duty. Staff executes contracts and then; after-the-fact, brings them to the board for approval (supposedly within 60 days of execution).

In the case outlined below, Staff applied for $24 million in CREB Bond debt on June 13, 2017, without Board approval. And then on July 26, 2017 had the discussion about CREB bonds. When Trustees indicated they were lukewarm and needed more time to study the issues surrounding Staff's proposed solar panel project Superintendent Vital pushed to consider at least applying for the CREBs while the issues were studied. It was represented to Trustees that there was no downside to applying for the CREBS while they were still gathering information. That was a mis-representation of fact because there were expenses in hiring Government Financial Strategies and Dannis Woliver Kelly to do the work to apply for the bonds.

Staff placed these contracts on the Consent Calendar at the September 11, 2017 CUSD BOT meeting Agenda Item #4 page 81

ICA 1718118 $325,000.00 Contract with Government Financial Strategies to provide financial advisory services and analysis review and evaluation of a District Wide Solar Project.
Funding: Prop 39/General Funds

PSA 1718110 $50,000.00 Contract with Dannis Woliver Kelley to provide Bond Counsel services for CREB Bonds (Clean Renewable Energy Bonds).
Funding: General Funds

$375,000 is a substantial amount of money to loose if Trustees did not ultimately approve moving forward with the Solar Project.

How are taxpayer interests protected when two employees of the District can take on $26 million in new debt without full disclosure to the Board?

Staff also failed to mention to the Board that in additional to CREB Bonds, doing the solar panel project would entitle CUSD to $10 million in matching funds and $8.3 million in subsidies. The $18.3 million; like all Prop 39 funds went into the General Fund with no limitations on how that money could be spent.

So CUSD used long term debt to get $18 million in short term cash flow which was never disclosed in the discussions of the CREB bond application.

This way of doing business has to end if CUSD is to be trusted with any more bond debt.

This is the discussion CUSD should be having with its "Elected Officials".

California is $1.3 trillion in debt because of Community College and K-12 school district bonds . If Capistrano Unified is allowed to increase its debt without proper oversight, it will effect the ability of the County of Orange and local Cities to raise new revenues.