I sent this email (below) on September 14, 2015 to the elected board of trustees, the top administrators, and the independent citizens bond oversight committee for the San Joaquin-Delta Community College District, based in Stockton.
The district wants to use $500,000 to develop a “facilities master plan” as a first step required by state law to ask voters to approve borrowing money via bond sales for facilities construction. That $500,000 would come from proceeds of bond sales authorized by voters in March 2004 as Measure L. Voters would consider the bond measure in 2018 or later.
A board vote on the proposal is scheduled for September 15, 2015. See the staff report: Request to Authorize the Creation and Funding of a “Facilities Master Planning Project” and to Authorize Contract Negotiations for Architectural Services to Develop the Campus & Facilities Master Planning Services
While this scheme sounds like an easy way to get money to hire an architectural firm to develop a plan for future bond measures, it appears to violate 15-year-old state laws (Proposition 39 and Assembly Bill 1908) that impose extra protections on bond measures that win voter approval at a 55 percent threshold.
Considering that the California State Controller and multiple county grand juries have criticized the district for inappropriate or questionable expenditures of bond proceeds authorized by Measure L, the district’s continued practice of using funds for expenditures that are ambiguously legal (at best) may compromise the willingness of voters to approve another bond measure for the district. Has the district taken into consideration the risk of negative public response to this proposed bond expenditure?
In 2016, California voters are likely to decide on a $9 billion statewide school construction bond measure and perhaps 150 or more local school and college construction bond measures. Would this expenditure add to the growing list of abuses of California school construction bond measures and thus contribute to jeopardizing passage of additional bond measures in 2016?
Dear Board of Trustees, administrators, and Measure L Citizens Bond Oversight Committee for the San Joaquin-Delta Community College District:
At its September 15, 2015 meeting, the board will consider Item #9J, a proposal to spend $500,000 of bond proceeds from Measure L (approved by voters on March 2, 2004) for a newly-created “project” to develop a Facilities Master Plan. This plan will prepare the district for a bond measure to bring before voters in 2018 or later. Here is the item:
Note that Article 13A, Section 1 of the California Constitution restricts how a community college district can spend borrowed money obtained through bond sales authorized through ballot measures approved by 55% of the voters under the criteria of Proposition 39 (2000). Bond proceeds can be used for “construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities.” And voters must be provided with a list of the specific school facilities projects to be funded by the bond measure.
Some questions you need to consider before approving the $500,000 in Measure L funds to be spent on creating a Facilities Master Plan for a future bond measure:
1. A list of specific intended projects to be funded by Measure L was provided to voters in the ballot information for the March 2, 2004 election. In this list of Measure L projects, which project describes the development of a Facilities Master Plan for another bond measure?
2. Is development of a Facilities Master Plan a legitimate “project” that can be funded by bond proceeds authorized by voters under the criteria of Proposition 39?
3. Is it reasonable to assume that voters who approved Measure L expected that the bond proceeds would be used to develop a Facilities Master Plan for another bond measure?
4. Is it fiscally responsible to borrow money from investors and pay them back over many years – with interest – to pay for development of a Facilities Master Plan for another bond measure?
5. Does the use of Measure L funds to develop a Facilities Master Plan for a future bond measure remain justified even if voters end up rejecting the bond measure(s) meant to fund the projects in that Facilities Master Plan?
6. What are the terms of maturity and interest rates for all of the bonds that provide the $500,000 in funding for this contract?
7. What is the total cost of developing the Facilities Master Plan if the district includes the interest that must be paid on the $500,000 in bond proceeds?
8. Has the district consulted with its Citizens Bond Oversight Committee for an assessment of whether this proposed specific expenditure of Measure L bonds complies with Proposition 39 and complies with what was presented to voters as Measure L in 2004?
Regardless of whether the San Joaquin-Delta Community College District is justified in seeking voter approval to borrow more money for construction, the district needs to follow the law when it spends borrowed money authorized by a previous bond measure. This proposal on the board’s September 15, 2015 meeting agenda is possibly illegal and needs thoughtful consideration.
President and CEO
Labor Issues Solutions, LLC