Bloomberg News reports today that the Acalanes School District (ASD) is one of about 200 California school districts involved in bond scams that have been condemned by Attorney General and former Governor Jerry Brown as unconstitutional. The finance schemes are said to have cost California taxpayers close to $1B.
According to the Bloomberg report:
None of these deals should have been done, Brown says. The constitution bans school districts from taking on additional debt in a refinancing of taxpayer-approved bonds without a public vote.
In every case, the prohibited transactions added to school district debt and increased property taxes for at least the next decade, bond records show. Banks pitched the deals to schools on the premise that refinancing would save taxpayers money and provide extra cash.
The deals were dominated by UBS AG and Piper Jaffray Cos., which collected fees up to four times the U.S. average for bond sales, public records show.
“This was a hell of a cute scheme,” says Lee Buffington, treasurer of San Mateo County, just south of San Francisco. “These guys had a gold mine going and thought nobody was watching.”
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To the Editor:
In an attack on working families, the Acalanes Union High School District wants to make a temporary property tax go on forever.
Currently, the Acalanes district collects a property tax of $189 per parcel per year. The tax is set to expire in June 2011.
On the November 3, 2009, ballot, the Acalanes district is asking voters to make the $189 tax permanent.
The district should extend the exisiting tax for a brief period. If, subsequently, the economy improves, the district may find it asked for unneeded money.
Richard S. Colman
Orinda, CA
Aug. 26, 2009