The city of Richmond, California (in the San Francisco Bay Area) is the type of place where the so-called “One Percent” is much malingned. Richmond is the most populous city in the United States to have a Green Party mayor, and the mayor welcomed Occupy protestors to the city. Voters in Richmond will have the chance on November 6 to enact the nation’s first city soda tax (along with voters in El Monte, California).
Richmond’s supposed unemployment rate went from about 7% in 2006 to 18.5% in January 2010. Unemployment has now improved to between 14% and 15%, but obviously economic circumstances have taken a grim toll on the people of Richmond.
ASKING FOR MORE MONEY – SEVENTH TIME IN FIFTEEN YEARS – IT’S NEVER ENOUGH
So now the elected school board of the West Contra Costa Unified School District – based in Richmond – is asking voters for the SEVENTH time to approve a measure that would allow the school district to borrow money from investors through bond sales. (The district also includes El Sobrante, Pinole, Hercules, El Cerrito, North Richmond, and Kensington.)
The amount to be borrowed this time is $360 million. That does NOT include interest payments and financial transaction fees.
The school board tells voters it’s “For the Children of West County.” Most voters aren’t exactly clear on what bonds are, but they sound like free money from the government to help the children.
Ordinary voters have generously agreed FIVE TIMES since 1998 to let the school board of the West Contra Costa Unified School District sell bonds to borrow money for construction. The total amount of the five approved bond sales is $1,270,000,000.00. Only once did voters in the West Contra Costa Unified School District not approve a bond measure – in a special election in 2003 in which two-third of voters were required to approve the measure, rather than the 55% customarily sought today by school districts and community college districts.
Here’s a chart of the five bond measures approved for the West Contra Costa Unified School District since 1998:
Date of Election
Opinion of WCCUSD Voters
|June 2, 1998||Measure E||Approved by 76.0% of voters|
|November 7, 2000||Measure M||Approved by 77.5% of voters|
|March 5, 2002||Measure D||Approved by 71.8% of voters|
|November 8, 2005||Measure J||Approved by 56.9% of voters|
|June 8, 2010||Measure D||Approved by 62.6% of voters|
But $1.27 BILLION is NOT the real amount taxpayers owe to investors who bought these school bonds.
According to a June 7, 2012 statement related to an upcoming sale of bonds issued by the West Contra Costa Unified School District, the district’s total annual debt service for these five sets of bond sales is $1.77 billion.
Taxpayers owe $1,774,072,000.12 because of interest payments to investors.
The $1.77 BILLION also includes fees for bond counsel, disclosure counsel, financial administration, escrow agents, rating agencies, printing, and insurance. Lots of people get a cut of the action.
Ironically, the West Contra Costa Unified School District is enriching the One Percent who buy these bonds. Commercial banks, insurance companies, mutual funds, and wealthy individuals buy these bonds, not to help the children, but to make money through the interest payments funded by taxpayers.
OF COURSE THE BOARD OF THE WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT SOLD CAPITAL APPRECIATION BONDS
It’s frustrating to try to figure out what has been going on regarding bond sales in the West Contra Costa Unified School District, because reports and audits prepared for the district are inconsistent or fuzzy in some of the fundamental information.
Page 118 of the June 7, 2012 preliminary official statement for the sale of bonds by the West Contra Costra Unified School District contained the following useful information:
On August 11, 2004, the West Contra Costa Unified School District borrowed $28,746,812 by selling the Measure D Series 2002 C Capital Appreciation Bonds. The interest to be paid by 2036 will be $67,063,188, for a total burden to school district taxpayers of $95,810,000.
On October 19, 2005, the West Contra Costa Unified School District borrowed $95,250,422 by selling the Measure D Series 2002 D Capital Appreciation Bonds. The interest to be paid by 2036 will be $157,139,526, for a total burden to school district taxpayers of $252,389,998.
On August 12, 2009, the West Contra Costa Unified School District borrowed $28,746,812 by selling the Measure J Series 2009 C Capital Appreciation Bonds.
Board member Charles Ramsey, a longtime nemesis of the Merit Shop and statewide traveling salesman for union Project Labor Agreements, apparently knew that Capital Appreciation Bonds were unorthodox. According to the minutes of the April 28, 2010 West Contra Costa Unified School District board meeting, he asked several questions about bonds, including “an explanation of capital appreciation bonds and deferring of debt service…Mr. Ramsey continued by asking for a full understanding for the Board to know all aspects of capital appreciation bonds and other forms of bonds.” But true to form in ignoring his appeal of conscience to rely on common sense, Mr. Ramsey then made the motion to approve the bond sales, which were approved 5-0. There were no public comments.
OF COURSE THE BOARD OF THE WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT REQUIRES CONSTRUCTION CONTRACTORS TO SIGN A PROJECT LABOR AGREEMENT WITH UNIONS
On May 3, 2000, the school board voted 5-0 to approve a policy that it will consider a Project Labor Agreement for each individual construction project of $1 million or more. (An administrative regulation for this policy was implemented on August 2, 2000.)
On December 6, 2000, the board voted 5-0 to approve its first Project Labor Agreement, for the construction of a middle school.
On July 11, 2002, the board voted 5-0 to amend its Project Labor Agreement to put the responsibility on the contractors (instead of the unions) to find local apprentices.
Charles Ramsey, a school board member for the West Contra Costa Unified School District, was secure enough in his position when he introduced the Project Labor Agreement to the school board on March 15, 2000 to acknowledge to the stunned Superintendent of Schools (who wasn’t provided any advance information on the item) that he had blindsided her:
I ramrodded and railroaded and I am proud to say that I did.
Somehow 200 union members managed to hear about the item and showed up at the meeting to support it.