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Report: PUSD Made Potentially Illegal Moves for Cash

A new report questions the maneuvers Poway Unified officials made to get more upfront cash out of a controversial bond deal.

Poway Unified School District officials may have illegally upped costs in the now-infamous billion-dollar bond deal by “artificially inflating interest costs” to pull out $31 million in cash upfront, according to a new report by Voice of San Diego.

The report springs from the controversy around a 2011 bond deal that was supposed to be for $105 million but is likely to end up costing taxpayers nearly $1 billion to repay because of an extended re-payment term that hasn’t even begun.

By inflating interest rates, the district was able to borrow $31 million more than voters authorized, costing taxpayers an extra $219 million to repay, according to the report. School districts have typically used this tactic to cover ancillary costs like attorneys’ fees, but Poway Unified borrowed much more than the $1.7 million needed to issue the bonds and used the rest to pay the interest on other loans, according to VOSD.

While a San Diego Superior Court judge approved the bond, California Attorney General Kamala Harris’ office said that the district was “not authorized by law” to use the upfront cash as it did.

Read the full report on VoiceofSanDiego.org

Clariece Tally September 24, 2012 at 06:27 PM
It just keeps getting better and better doesn't it? At what point do we demand the resignation of Dr. Collins? You'd have to be an absolute fool to elect Jeff Mangum to the City Council. The $31 million cash up front was also used to pay the 13% premium from the 2009 Series A. Please let me know how the Board didn't know that the 2009 Series A bond had a 13% "premium" on it? Please explain how any of this is remotely okay? Please justify this as being "for the kids."
Babs September 24, 2012 at 08:34 PM
Past time for a Grand Jury Investigation Remove the PUSD Board and Supervisor NOW! In days gone by, we were afraid of dying in sin or dishonor. Nowadays, we are afraid of dying fools. The fact is that there appears no Extreme Unction to absolve us of PUSD's gross fiscal foolishness (Collin and Mangum included). We and our children will not continue to be made national fools. It's time to clean house. Hopefully, we will not be fools and elect any of these people to any public office ever again.

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