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Report: PUSD Loan Will Cost School District Nearly $1B

VOSD reports that a $105 million loan to the Poway Unified School District last year will cost almost $1 billion to re-pay.

As students in the Poway Unified School District began their summer break, recognized the district’s accomplishments in student achievement and relationship with the teachers union.

As the summer winds down, another report has attracted attention to PUSD, this one questioning the wisdom of the district’s borrowing money in 2011 using a capital appreciation bond.

Voice of San Diego reporter Will Carless posted a story Monday detailing the loan, which provided the district with $105 million last year, but payment toward the debt won’t begin for 20 years. Between 2033 and 2051, the PUSD will have to pay $982 million to pay off the loan.

For a full report on the bond, read the story on Voice of San Diego.  

Babs August 09, 2012 at 02:21 AM
Brian, Just in case it was not understood, "the mess they made" refers to the 64%. "A better educated electorate might change the reason (or how) many persons vote." - Lyn Nofziger Hence, with the cow out of the barn, maybe the focus can be "education" of the electorate. In the earlier posting, this was mentioned and bears repeating over and over again, "When someone states that this or that ballot initiative is FOR THE KIDS, it's time to look very closely at what is being proposed." In most cases, it's invalid reasoning.
Joe St. Lucas August 09, 2012 at 04:16 AM
It's going to make "real" bond issues impossible to pass no matter what it's for.
Bill August 09, 2012 at 04:25 AM
Everyone in Poway should remember these names: Mangum, Rantfle, Vanderveen, Patapow, Gutschow. They all had a hand in this incalculable disaster. Never, ever vote for them, for anything.
Poway Resident August 09, 2012 at 05:16 AM
I have always believed and spoken so highly of the integrity and heart of Poway to residents and non-residents alike. When I heard this story for the first time today, it made me sick to my stomach ... how could this be true? How could the City that I live in and have so highly promoted to others be on the verge of financial armageddon? How anyone, in good conscience, could sign away the dreams of our next generations? The first question I have is, since I have had the greatest respect for the Mayor and certain Councilmen, "How much did they know when they promoted and decided to present this as your solution to the taxpayers several years ago?" I realize that the voters casted the votes but, did the proposition disclose this asggregious debt burden ... in my opinion, it was hidden from the public. In matters of this magnitude, I want to believe that the Mayor and City Council are stewards of our future ... they should have been all over this! I was struck by at least one statement you made namely "And there’s no chance of the district refinancing the deal. The loan contains a provision strictly barring the district from refinancing its debt." I just can't accept that. For a City or anyone for that matter, to realize that they've been duped, which we have, I cannot believe for a second that there could ever exist such a provision that would not allow the borrower to refinance a debt. This is the venue of organized crime! Resident of Poway
Bill August 09, 2012 at 05:31 AM
It was not the city council. It was the school board of a couple years ago - Mangum, Vanderveen, Patapow, Gutschow, and Rantfle. Shame on them.
Tom Yarnall August 09, 2012 at 04:05 PM
As the apparent spokesman for Jeff Mangum I am surprised Dick Lyles has not responded. Perhaps the assistant mouth piece, Penny Rantfle, who was a Board member and supported the proposal, will come forward and explain the rational used to pass the measure. Was it the routine strategy of "just for the kids"? Ms. Randfle, are you with us?
Bill August 09, 2012 at 05:04 PM
Mr Yarnall You gave me a good laugh when one was needed. 'Just for the kids' Yeah, for the kids at the expense of their kids and grandkids. Lyles had an epic fail with the 'it wasn't on Mangum's watch' attempt. School Board minutes tell a different story. Next he or Rantfle will likely try the 'you just don't understand' approach. Problem is we DO understand. This is what happens when a cabal of monied residents manage to keep a stranglehold on elective offices. Terribly sad for Poway that the people who see themselves as Poway power brokers, claiming they know what is best for Poway, Don Higginson, Dick Lyles, Sue Herndon, Sharon Cafagna, the Mechlings, the Mullins, Mangum, Vanderveen, Rantfle et al, have done a number on us all. What remains to be seen is whether we will let them fool us again.
Fran August 09, 2012 at 05:21 PM
Careful Bill - Ladiboss might come over and post how grateful we should be for their pillored support and how our community would be at a loss without their help.
Tom Yarnall August 09, 2012 at 10:09 PM
Bill, I have no reason to question the honesty or integrity of any PUSD School Board member. I'm sure they all have very noble intentions, along with a big ego, in wanting to serve. I just believe they were duped into buying a fallacious plan that would pass their responsibilities on to a future generation. They took the easy way out. I believe it is fair to question a person's judgement on this issue,especially when they want to be on the City Council. their responsibilities until they were long gone.
Bill August 09, 2012 at 10:28 PM
Mr Yarnall I cannot disagree. But aren't they supposed to be deliberate enough, wise enough and paying attention enough not to be duped? They have a fiduciary duty to do their due diligence and clearly they failed.
Bill August 09, 2012 at 11:45 PM
A few random but interesting tidbits in the "what did they know and when did they know it." Jeff Mangum who was Board President when the Board voted to put Prop C on the ballot was asked in a Facebook post visible only to friends which was forwarded to a friend of mine "What is the story that PUSD is borrowing several hundred million but will be owing $1 Billion?" Mangum responded "Short answer is I don't know anything about it yet." Then astonishingly he says "it was passed in 2011 when I was no longer on the board." Perhaps he is forgetful. It was passed by PUSD in 2007 and by the voters in 2008. Maybe he meant he didn't know anything about the payment terms attached to the measure? Oops. His own BFF Marc Davis who replaced him on the PUSD board in 2010 said in separate emails to several constituents who were inquiring about the debacle (paraphrasing) "I wasn't on the board until 2010; the 2007 Board proposed Capital Appreciation Bonds; EVERYONE including district officials knew Proposition C bonds were going to be 40 year negative amortization bonds." Maybe Davis' statements will jog Mangum's memory.
Bill August 09, 2012 at 11:53 PM
Follow the money: According to an archive from the U/T all the PUSD Board members were on the receiving end of largesse from developers who made millions in the first bond issue Prop U. Tallied together there's something in the neighborhood of $5K in donations to campaigns, dinners, etc. to the Trustees. No wonder they were anxious to pass another Prop. It won't make you rich but it pays reasonably well. And virtually all the Trustees have significant personal wealth already any way.
Tom Yarnall August 10, 2012 at 01:19 AM
Yes, follow the money and you will find who controls Poway politics. That is why we need council districts so those with the money has less control over those who struggle to make ends meet.
Poway Resident August 10, 2012 at 06:13 PM
Dear Mayor Higginson, Echoing comments from others, I believe that the residents of Poway would be well served to receive a direct statement of the union from your office. If the facts are true, we want that confirmation from you. If the facts are incorrect, we look to you for clarification and reassurance. As I'm sure you can see, this issue is rapidly gaining momentum and, as more people become aware of what has apparently happened, the level of panic and anger is increasing exponentially. I have always hoped, and sometimes expected my elected officials to provide us with leadership, honesty and courage. We don't want this sugar-coated. Please just tell us what we're up against so that we can collectively plan for our futures. Residents of all ages are waiting for a response. Thank you.
Joe St. Lucas August 11, 2012 at 06:01 PM
The San Diego County Taxpayers Association "Targeting Waste, Promoting Efficiency", endorsement at http://www.sdcta.org/Uploads/Documents/PropC.Poway_1.pdf
Bill August 12, 2012 at 05:15 PM
There's now a Facebook page about this debacle called THANKS A BILLION! Visit it. LIKE the page. Spread the word!!! https://www.facebook.com/ThanksABillion
Tom Yarnall August 13, 2012 at 04:33 PM
Poway has made it to the national networks: http://www.foxbusiness.com/investing/2012/08/08/california-school-districts-spend-1-billion-to-borrow-100-million/ If you are mad about the "ostrich" type decision made by Collins and company, you will be madder when you see the details.
Tom Yarnall August 13, 2012 at 04:53 PM
Following is a quote from the Chieftain: "Poway residents Linda Vanderveen and Andy Patapow both said that the stability of the board’s makeup over the years has contributed to the district’s academic successes and its ability to weather a series of financial storms." Wither a series of financial storms??? These people are actually proud of kicking the can down the road for the grand kids to deal with. I hope there is time for someone else to file and give the voters an opportunity to get rid of these inept members.
Bill August 13, 2012 at 05:01 PM
Vanderveen and Patapow along Mangum, Gutschow, Rantfle CAUSED the storm. Sad to say filing period closed last Friday. Have only heard of one challenger. If you do Facebook visit the THANKS A BILLION page and LIKE it. With enough people we can show all those PUSD noTRUSTees a real storm.
Tom Yarnall August 13, 2012 at 05:38 PM
Should there be someone out there that would like to serve, and have good credentials, I suggest a write in campaign. Even though it's not the most effective way, it is one way to cast a protest vote instead of just not voting. Anyone interested should register as a write in candidate. Should a qualified candidate come forward I will be willing to make a contribution to their campaign.
Clariece Tally August 13, 2012 at 05:41 PM
I will be on Fox & Friends tomorrow (Tuesday) at 5:15 a.m. talking about this. Hope to heavens I can string a sentence together at that hour.
SaraAM August 15, 2012 at 06:01 AM
Thank you Mr. LyIes for presenting the facts that many are too eager to overlook because it doesn't further their cause (I'm guessing that "Bill" is a major supporter of a a certain other Poway city council candidate, hence why he is salivating over this opportunity to inaccurately trash Mangum).
Clariece Tally August 15, 2012 at 01:34 PM
SaraM - Mr. Lyles presented no facts. First, the bond measure passed in 2008 was bereft of any financing information. It basically said the district was going to buy a car and finance it. The first CAB was issued in 2009 with the follow up CAB issued in 2011. The Trustees in 2007 passed the bond request and had it put on the ballot. Financing does not happen overnight. It takes months for opinions to be issued and details hammered out. The fact that the Trustees never disclosed to voters their intent to use CABs that push debt out over 25 years and at a rate of NINE to one is what we're talking about. No one here is talking candidates. We're talking fraud by elected representatives. Educate yourself.
SaraAM August 15, 2012 at 02:38 PM
No one here is talking candidates? Really? You don't have all the facts either and are closely linked to Steve Vaus, so why on earth would I trust what you have to say? I'm still doing my research to find out the details and truth, but let's be honest: the amount of blame that Mangum is getting for this compared to everyone else is in large part because of his campaign against Vaus. I know how politics work.
Bill August 15, 2012 at 02:57 PM
SaraAM This discussion has solely been about holding former PUSD Trustees accountable for their actions. Some of those former Trustees happen to be running for reelection and one for City Council. Speaking for myself, I believe they are not to be trusted and unworthy of support but there has been no mention by anyone of any other candidate until you came along.
SaraAM August 15, 2012 at 04:39 PM
That's the beauty of politics though, isn't i? Nobody here has to mention other candidates by name (though if you do a little research on Poway patch and Facebook, you can see that several of these people who have commented are Vaus supporters), they just have to bash Mangum despite not having all of the facts. Dirty politics, as usual.
Clariece Tally August 15, 2012 at 05:22 PM
My article fully vetted by both the local editor and the regional editor, and other outside news sources have also confirmed. But by all means try and deflect from Mangum. He was the Board President in 2008 when this bond was placed on the ballot. He was still a Trustee when they financed the 2009 CAB. The 2011 financing has its roots in the earlier CAB and the creation of the financing began in 2010 - it was only completed in 2011. The only dirty politics here is the disception by the Trustees. But go ahead and try to deflect this to others unrelated to the debacle. That's dirty politics. I voted for Mangum - I trusted him too. And that trust has been irretrievably violated. Never again should any of these people hold the public trust by holding any elected office. Hell I don't even want them running an FFA carwash.
Joe St. Lucas August 15, 2012 at 05:22 PM
You have until Oct 23 to file nomination papers as a write-in candidate. Silly as it sounds, you can't just put someone's name on the ballot and get it counted, you have to file as a write-in. I'd suggest that if someone wants to run as a write-in for the PUSD board since the normal period has ended, that they consider this early. Hate to get too many write-ins and "dilute" the vote and wind up w. the incumbents getting re-elected. http://www.sdcounty.ca.gov/voters/Eng/reports/General_Election_candidate_schedule.pdf
Mike H August 24, 2012 at 03:22 AM
Why can't city go bk? They could reorganize the debt or set up a prepayment plan... Does anybody know, why this isn't being suggested,? Obviously our small co can never pAy such a large number.
wayneh October 17, 2012 at 11:06 PM
This has nothing to do with the City of Poway. It is the Poway Unified School District, a completely separate entity that encompasses areas of Poway and the City of San Diego. Yes, Jeff Mangum voted for the bonds as did the majority of the voters who passed the bond issue. Once a bond issue is passed by voters it is then put out to market and sold. In 2010, while Mangum was still on the PUSD Board, the bond could not be sold due to conditions in the bond market at that time. And yes, he voted for this bond to be financed. However, when the final vote was take in the spring of 2011 and the bond was actually funded, Mangum was no longer on the board. The decision to use CAB funds to finance the bond was decided at that time. The choice was between a non-callable CAB or a CAB that would be callable in 10 years. That CAB would have cost about $100 million more than the non-callable one that the 2011 Board members decided to go with (no Mangum). If the Board had not selected 1 of these 2 options, then PUSD would have been in default and the State of California would have taken over the school district. In my opinion, the biggest mistake that the board made was not having a PUBLIC meeting in 2011 to present these options to the PUBLIC and have the people tell the Board what we wanted them to do.

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