Clariece Tally: PUSD Trustees Betray Parents, Students

If Will Carless, investigative reporter for Voice of San Diego, had detonated a nuclear device at the , he would not have created more collateral damage than he did in his well-researched and powerful article, Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools.

Without Carless exposing the details of the 2011 bond financing by the Board of Education, Poway voters and property owners may never have known how deeply they had been deceived—well, not for at least another 20 years. 

To simplify the events: In 2008, the PUSD needed money to finish numerous facility upgrades that were supposed to have been paid for by Proposition U, which passed in 2002.  Why those Prop U upgrades went over budget by tens of million of dollars is a completely different discussion and pales in comparison to this discussion.

In 2007, the school board (President Jeff Mangum and Trustees Linda Vanderveen, Andy Patapow, Todd Gutschow and Penny Ranftle) decided to ask voters for money to finish school repairs and upgrades and to essentially extend the pay-off date for the Proposition U bond. However, by 2007, people were tired of being taxed to death with little to show for it and the country was in the initial stages of an economic free-fall.

So the school board promised that passing the bond would allow them to finish the projects with no tax increase. The length of the taxation would be extended but the tax itself would remain the same. It didn’t seem like such a bad deal at first blush. 

However, instead of disclosing to voters the trustees’ intent to use a highly risky financial instrument known as a capital appreciation bond, they simply said on the ballot the funds would be raised with “general obligation bonds.” They certainly knew including the words “capital appreciation bonds” would have been a red flag that the district planned to mortgage our future to the hilt. Capital appreciation bonds are the equivalent of what sub-prime loans were to low-income borrowers and collateralized mortgage bonds were to lenders during the housing bubble of the last decade.

And look where that got us.

So between hiding critical information and repeating the predictable mantra “it’s for the children,” we were intentionally deceived to the tune of a billion dollars. Right, billion with a “B.”

Predictably, Poway has become the laughingstock of the financial world. CNBC intoned this is “the worst loan ever!” The Financial Times said, “At best, this is a case of kicking the can down the road; at worst, a case of the government dancing with loan sharks.”  Now, bad financial planning by school districts can be referred to as “pulling a Poway.” 

We are a city that has prided itself on our community spirit; our ability to come together in the midst of disaster, to comfort each other in the face of tragedy; and our quality of life rises above the rest of the county. Now we are city that is leveraged to the hilt and will find future bonds out of the question (think infrastructure and storm drains). 

Not surprisingly, PUSD officials have gone into spin mode. Todd Gutschow, still a trustee, said, “We could have authorized more taxes, it would just have been breaking the promises we made to the community.” Jeff Mangum, president of the board at the time and now running for Poway City Council, posted on Facebook: “Short answer is I don’t know anything about it yet. It was passed in 2011 when I was no longer on the Board.” (No, Mr. Mangum, it was passed by the board in 2007 and the voters in 2008.)

I would welcome a statement from the PUSD superintendent and trustees who put this on the ballot in Feb. 2008—with an explanation as to why they have impoverished our children and grandchildren without our fully informed consent. I would also like a real discussion about concrete solutions on how we correct this financial disaster and how we can prevent this from happening to anyone else.

Unfortunately we have already learned the loan cannot be pre-paid or refinanced, so we need to start planning for the future payments now. And the very tax increase that the board said they wanted to avoid will undoubtedly come to fruition, either by a voter referendum with the money earmarked for future payments or by the far more drastic step of the County Tax Assessor forcing a tax on property owners to ensure repayment.

Either way, we need to begin a process of earmarking dollars now. As a result of their actions Mangum, Vanderveen, Patapow, Ranftle and Gutschow have virtually guaranteed us a triple-digit tax increase to cover their mess.   

We deserve answers. There needs to be full disclosure of the details on how this happened. It is abundantly clear we cannot trust the district to provide anything other than intentionally vague information and references to “we did it for the children.” Fortunately the law provides an investigative mechanism, and as an individual citizen or as a group we have the power to request a grand jury investigation against the Poway Unified School District, then-president Mangum and Trustees Vanderveen, Patapow, Ranftle and Gutschow. Because we can no longer trust the individuals or the district to give us honest answers, we will have to rely on sworn testimony and the power of the subpoena.

Sadly, what bothers me most about this situation is not the future increase in taxes or the fact that yet another politician has mortgaged our future—I’ve come to expect that from Sacramento and Washington. No. The real travesty is that this fraud was perpetrated on our community by a few of its own. People we believed to be trustworthy and above reproach—Mangum, Vanderveen, Patapow, Ranftle and Gutschow

Never again should any of you hold office in this community. We cannot afford to have our trust violated again. Shame on you.