Tag Archive for Prop Z (San Diego Unified School District)

Foolishness That Won’t Be Stopped: California’s K-12 School Districts Use Borrowed Money from Bond Sales to Buy iPads and Other Technological Gadgets

The web site www.EdSource.org (“Engaging Californians on Key Education Challenges”) has an article today (December 18, 2012) entitled Districts Face Questions in Spending Long-Term Bonds for Short-Lived Technology. It’s a good summary of how some K-12 school districts in California are using language in Proposition 39 to justify spending borrowed money from bond sales to “equip” schools with computers and other technological products.

Money borrowed through bond sales is typically paid back with interest over a long period of time – much longer than the useful life of computers. Aren’t you glad you didn’t take out a 30-year bank loan to pay for your Radio Shack TRS-80?

Chris Reed had a short piece posted in the December 9, 2012 www.CalWatchdog.com entitled Will School Finance Scams Be Addressed? One of Two at Best. He predicts the California state legislature will restrict the ability of educational districts to sell Capital Appreciation Bonds (CABs), but will not prevent educational districts from using bond proceeds to buy technological products.

Proposition Z was and still is the Zombie Tax.

Proposition Z was and still is the Zombie Tax.

The most prominent recent controversy about California school districts using borrowed money from bond sales to buy technology occurred during the fall 2012 campaign to pass the $2.4 billion Proposition Z bond measure for the San Diego Unified School District. The San Diego County Taxpayers Association led the charge in pointing out how the school district was spending bond proceeds on iPads. In the October 9, 2012 article Is School Bond Money Going to iPads Over Repairs? Fact Check, Voice of San Diego reported the following:

As of mid-September, the district says it had spent more than $379 million of its Prop. S funds. About 11 percent of that has been used to buy iPads, computers and other technologies, according to figures released by school officials.

While the article never actually stated the amount, 11 percent of $379 million is $42 million.

In a subsequent October 25, 2012 article $2,500 iPads? Fact Check, Voice of San Diego reported these findings:

A display case at San Diego Unified School District administrative headquarters highlighting the Proposition S bond measure. The school board has not yet directed district personnel to enhance the display with the original signed Project Labor Agreement negotiated with union officials.

A display case at San Diego Unified School District administrative headquarters highlights the Proposition S bond measure.

The school district used some money collected under Proposition S, the bond approved in 2008, to invest in classroom technology upgrades, including more than 21,500 iPads and nearly 77,800 laptops. More purchases are planned next year…

The iPad purchases came in two phases. First, the district used a series of highly controversial 40-year bonds to buy 10,729 iPads. The district says each iPad cost $420 plus another $116.50 for three-year warranties and accessories. After reviewing bond documents, we calculated that the district will pay an average of about 7.6 times that amount once the final bill comes due. That means a single iPad will cost $4,077.

The district’s second purchase of nearly 10,800 iPads will be less burdensome. The next set of bonds came with a bill that’s an average of about 5.1 times the original cost. Our math shows the district can expect to pay about $2,731 per device for iPads purchased in the second wave.

San Diego voters didn’t care: 61.80% of them voted for Proposition Z on November 6, 2012 and guaranteed that the San Diego Unified School District will have the authority from the 2008 Proposition S and the 2012 Proposition Z to borrow millions of dollars more to spend on iPads.

Besides the bond investors, the people making money on this activity are investors in Apple, Inc. I tweeted the following about the www.EdSource.org article:

California school districts using borrowed $ from construction bond sales to buy computers. (What’s Apple’s position?)

Finally, Jack Weir, a member of the Pleasant Hill City Council and an activist in several community and taxpayer groups in Contra Costa County, emailed a provocative response to the leadership of the Contra Costa Taxpayers Association in response to the www.EdSource.org article:

From:Jack Weir
Sent:Tuesday, December 18, 2012 9:26 AM
To: xxxx
Subject: Re: Should schools be using bond money for technology which is so short lived?

As Alicia Minyen, Anton Jungherr and other CalBOC board members have amply demonstrated, school bond programs are largely out of control – literally.  Mt. Diablo and West County districts have abused Prop 39 on a major scale, although there are far more egregious examples elsewhere in the state.  The new Mt. Diablo board is committed to address their Measure C issues, but will have little corrective latitude.  Dismantling the massive damned solar canopy won’t unring the bell.

There is a whole industry of bond counsels and consultants that work this field, operating in tandem with teachers unions and Democrat politicians that advocate milking the school construction programs to wring additional operational (compensation) funding from local property-owning taxpayers.

After ten years of wrestling with the problem of bringing public (government) education into the 21st century, it is clear to me that nothing short of a whole new paradigm is needed.  And, to get there, we should be asking broad future-focused questions, such as:

> Do we really need brick and mortar facilities dedicated exclusively to classroom teaching?  (Ditto brick and mortar “libraries.”)
> Does it make sense to continue to load ten year-olds with 50 back-breaking pounds of paper books*, when most have (or should have) access to digital devices and the internet?  Within five years, every bit of data and information needed for a good education will be available on the “cloud,” accessible only via digital devices.  Other countries (and states) will leap-frog traditional educational models and kick our economic asses.  Take a look at what India did to bring education into its remote rural villages 25 years ago, and now their kids are coming here to work on H-1B programs.
> Who should pay for K-12 education?  “Free” education ain’t; certainly not to taxpayers, who currently gain a pathetic return on their “investment.”
> What’s the right role for taxpayer advocates in the political forum going forward?

It’s time to start over.
Jack

Based on the results of the November 6, 2012 elections, Californians don’t want to start over. They like the current paradigm, in which the kids get to use “free” iPads.


* Note from Kevin Dayton: regarding the weight of paper textbooks, Assembly Bill 2532, signed into law by Governor Gray Davis in 2002, required the California Board of Education, on or before July 1, 2004, to adopt maximum weight standards for elementary and secondary school textbooks. The California Board of Education subsequently adopted regulations concerning textbook weight standards.

Opponents of Project Labor Agreement for San Diego Unified School District Smack $2.8 Billion Proposition Z with 50,000 Mailers

The Coalition for Fair Employment in Construction continues its “School Bond Accountability Project” by sending out a mailer to 50,000 San Diego households reminding them that the Board of Education of the San Diego Unified School District requires construction contractors to sign a Project Labor Agreement with unions in order to work on certain projects funded by school district bond sales.

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer - Front

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer – Front

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer - Back

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer – Back

In November 2008, voters approved Proposition S, authorizing the Board of Education of the San Diego Unified School District to borrow $2.1 billion for construction (and apparently, iPads) by selling bonds to investors. Voters had no indication that the Board of Education would promptly make a deal with construction unions to give them a monopoly on construction with a Project Labor Agreement. (See San Diego Unified School District Proposition S Project Labor Agreement 2009.)

Project Labor Agreement Policies for San Diego Unified School District

1999 Union officials unsuccessfully lobby the school board and district officials to require contractors to sign a Project Labor Agreement for construction funded by Proposition MM.
May 26, 2009 Board votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S.
July 24, 2009 Board again votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S, replacing the first, defective agreement with a new agreement containing terms and conditions acceptable to the Carpenters Union.
July 24, 2012 July 24, 2012 – Board votes 5-0 for a resolution expanding the scope of the Project Labor Agreement to projects funded by future bond measures, thus imposing the Project Labor Agreement on projects funded by the proposed $2.8 billion bond measure on the November 6, 2012 ballot.

Administrative offices of the San Diego Unified School District.

Now the Board of Education wants to borrow another $2.8 billion! It wants voters to approve Proposition Z, authorizing more bond sales for construction. The Board of Education of the San Diego Unified School District also passed a resolution on a 5-0 vote committing to require contractors to sign a Project Labor Agreement with unions in order to work on projects funded by Proposition Z.

Read this list of contributors to the campaign to convince voters to let the San Diego Unified School District sink under another $2.8 billion (plus interest) in debt with Prop Z. It includes ONE San Francisco investment banker who has essentially funded 20% of the campaign.

The Coalition for Fair Employment in Construction sent this press release out today (November 1, 2012):

CFEC Mails 50,000 Taxpayers in San Diego Reminding Them How San Diego Unified Spends Bond Money Wastefully

San Diego, CA – 50,000 households within the San Diego Unified School District (SDUSD) will be receiving this mailer over the next couple of days reminding them how the San Diego Unified School District spends bond money.

Proposition S, a $2.1 billion school construction bond passed by voters in 2008, was placed under a union-crafted Project Labor Agreement (PLA) in early 2009. This payoff to the union bosses who financed school board members’ political campaigns has resulted in the district having 50% fewer bidders on projects while the costs of those projects are 20% higher than non-PLA projects.

SDUSD is paying $1 million annually just to oversee the PLA.

“SDUSD homeowners are currently on the hook for  $4.7 BILLION in debt for all previous bonds.  What they receive for that debt, however, is further reduced in value due to the PLA.” said CFEC’s Eric Christen.

What are homeowners getting for all of this wealth they are giving up?

iPads that cost you and me $500 but SDUSD pays $4,000 to be paid back over 40 years. This means current SDUSD students’ GRANDCHILDREN will still be paying off iPads that were thrown away 30 years before they were even born.

The facts regarding the failures of how Prop S money is spent certainly did not come from the District which has admitted that the records it keeps on how Prop S funds were spent are “incomplete” and essentially misleading.

“Voters need to know the fiscally reckless manner in which this District is spending billions in taxpayers dollars” added Christen. “This mailer will help accomplish this goal.”

To date approximately 20% of the money authorized to be spent under Prop S has in fact been spent.

ONE San Francisco Investment Banker Is Funding About 20% of the Yes on Proposition Z Campaign for San Diego Unified School District to Borrow $2.8 Billion Through Bond Sales

Ordinary taxpayers of San Diego! The so-called “One Percent” really, really wants you to take on $2.8 billion more in debt (plus interest) and pay it back with new taxes.

This debt is in addition to the $4.7 billion debt you already owe (see page 17 of this official statement) as a result of past bond sales by the Board of Education of the San Diego Unified School District. Remember when you approved the school board to borrow $1.51 billion through Proposition MM in 1999 and borrow $2.1 billion through Proposition S in 2008? See below.

Bond Measures for San Diego Unified School District

Authorized Bond Amount. Does Not Include Interest and Fees

Date of Election

Ballot Designation

Outcome

$1.51 billion November 3, 1998 Proposition MM Approved by 78% of voters.
$2.1 billion November 4, 2008 Proposition S Approved by 69% of voters.
$3.61 billion Total from two bond measures from 1998 to the present.
$2.8 billion November 6, 2012 Approved for consideration by district voters through a resolution of the school board on July 24, 2012

Below, I’ve listed every contributor to the Yes on Proposition Z campaign through October 24, 2012 in order from biggest to smallest, including the latest reported “late contributions.” The total collected is $519,697.96, not including a $15,000 loan from Gafcon, which is also a $15,000 contributor and has a relationship with a $10,000 contributor, Sharepoint 360. I also do not include in-kind (non-monetary contributions) such as $4,626.91 from “A Better San Diego Issues Committee, A Sponsored Committee of The San Diego and Imperial Counties Labor Council, AFL-CIO” and $19,050 from “Communications and Its Subsidiaries,” whatever that is!

You’ll see on the list how construction trade unions (and their affiliated labor-management cooperation committees) are eager to monopolize that $2.8 billion in future construction with their guaranteed Project Labor Agreement: they’ve contributed a total of $191,612.96.

Project Labor Agreement Policies for San Diego Unified School District

1999 Union officials unsuccessfully lobby the school board and district officials to require contractors to sign a Project Labor Agreement for construction funded by Proposition MM.
May 26, 2009 Board votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S.
July 24, 2009 Board again votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S, replacing the first, defective agreement with a new agreement containing terms and conditions acceptable to the Carpenters Union.
July 24, 2012 July 24, 2012 – Board votes 5-0 for a resolution expanding the scope of the Project Labor Agreement to projects funded by future bond measures, thus imposing the Project Labor Agreement on projects funded by the proposed $2.8 billion bond measure on the November 6, 2012 ballot.

Architects and engineers have also generously contributed to the campaign, along with a few construction contractors. A few San Diego philanthropists and civic leaders have contributed, as well as one parent.

But note that the Yes on Prop Z committee reports $100,000 from the California Charter Schools Association Advocates Issues Committee (FPPC #1343062). This matches the $100,000 total contributed as indicated in the California Secretary of State records for the California Charter Schools Association Advocates Issues Committee. In addition, the California Charter Schools Association (not its Political Action Committee) contributed $7,500 to the committee on March 9, 2012. So the total from this group is actually $107,500, and that’s how I list it below.

In 2011 and 2012, the only monetary contributions received by the California Charter Schools Association Advocates Issues Committee are four payments totaling $500,000 from John H. Scully and his wife Regina Scully. See the California Secretary of State’s record for contributions received in 2011-2012 by the California Charter Schools Association Advocates Issues Committee.

In other words, about 20% of the $500,000+ campaign to convince San Diego voters to vote for Proposition Z and allow the San Diego Unified School District board of education to borrow another $2.8 billion for construction through bond sales is coming from ONE San Francisco investment banker.

Here is the complete list of contributions to Yes on Proposition Z, authorizing the board of education of the San Diego Unified School District to borrow $2.8 billion for construction by selling bonds to investors. (That money must be paid back, with interest, by taxpayers.)

DONOR INTEREST AMOUNT
California Charter Schools Association Charter schools/John Scully, investment banker $107,500
Irwin & Joan Jacobs Philanthropists $80,000
San Diego County Building and Construction Trades Council Family Housing Corporation No. 1 Construction trade union – property owner $42,500
San Diego County Building and Construction Trades Council Family Housing Corporation No. 2 Construction trade union – property owner $42,500
San Diego County Building and Construction Trades Council Construction trade union $25,000
International Brotherhood of Electrical Workers (IBEW) Local Union No. 569 Construction trade union $20,012.96
Gafcon Construction management $15,000
California Teachers Association Teachers’ union $14,000
Sharepoint 360 Information technology for construction (closely associated with Gafcon – see above) $10,000
Sheet Metal Workers International Association Local Union No. 206 Construction trade union $10,000
Southern California Pipe Trades Council #16 Construction trade union $10,000
Laborers Local Union No. 89 Construction trade union $10,000
Plumbers Local Union No. 230 Construction trade union $10,000
Southwest Regional Council of Carpenters Construction trade union $10,000
San Diego Electrical Industry Labor Management Cooperation Committee Union-affiliated labor-management cooperation committee $10,000
PJHM Architects Architect – clients include K-12 school districts $10,000
Mike Kooyman – Executive with PCM3 Construction management $10,000
John R. (Jack) McGrory San Diego civic leader, real estate investor, former City Manager of San Diego $9,000
Barney & Barney Insurance and employee benefits $7,500
CPM Ltd. (dba Manpower of San Diego) Temporary employment $5,000
Orrick Herrington & Sutcliffe Bond counsel $5,000
KPI Architects Architect $5,000
CSDA Architects Architect $5,000
Harris & Associates Construction management/engineers $5,000
Mel Katz Manpower/Philanthropist $5,000
LPA, Inc. Architect $5,000
GKK Works Architect – clients include K-12 school districts $3,500
NTD Architecture Architect – clients include K-12 school districts $3,000
Borrego Solar Systems Construction contractor $3,000
Carl Schneider – Executive with SchneiderCM Construction management $2,500
Fieldman, Rolapp & Associates Bond broker $2,500
Fulbright & Jaworski Law firm; clients include local governments $2,500
Vanir Construction Management Construction management $2,000
BSE Engineering Engineering $1,250
IBI Group Architect/engineering $1,250
Operating Engineers Local Union No. 12 Construction trade union $1,000
Andy Berg –National Electrcal Contractors Association San Diego Chapter Unionized construction trade association $1,000
HMT Electric Construction contractor $1,000
Peter Spencer, executive with Audio Associates of San Diego Design and installation of audio/video systems $1,000
Frisco White, with Westberg + White Architect $1,000
Amy Redding Philanthropist/school volunteer/parent of SDUSD student $1,000
Burkett & Wong Engineers Engineering $1,000
Blue Coast Consulting Inspectors – clients include K-12 school districts $500
Vickie Fortie, executive with Turpin & Rattan Engineering Engineering $500
Tom Gaeto, executive with Construction Testing & Engineering Engineering $500
Heat & Frost Insulators & Allied Workers Local Union No. 5 Construction trade union $500
Sylvia Avendano – executive with Owen Group Engineering $250
Johnson Consulting Engineers Engineering $250
Debra Preece – executive with Vector Resources Information technology – clients include K-12 school districts $250
Alison Whitelaw – executive with Platt/Whitelaw Architects Architect $250
Arthur Cantu, head of International Brotherhood of Teamsters Union Local No. 36 Construction trade union $100
Not itemized $85
TOTAL $519,697.96

Sources: Campaign Finance Report through June 30, 2012; Campaign Finance Report through September 30, 2012; Campaign Finance Report through October 20, 2012; Late Contribution Reports: 10/22 #1, 10/22 #2, 10-24-1, 10/26, 10/29.

Finally, take a look at the list above and notice the incongruity with the claim of John Lee Evans, a school board member for the San Diego Unified School District, who was secure enough in his position before he voted for the Project Labor Agreement on May 26, 2009 to inform the business establishment in San Diego that their traditional role as responsible community leaders was coming to an end:

“I think the bigger picture that people are realizing – and this is what scares some people – is that San Diego is changing, the United States is changing…this is a different city…we are looking at a different community.”

Not really. The same crowd is still putting a little money into the democratic system in order to make a lot more money off of that same system, with ordinary citizens paying for it through taxes.