Wednesday, August 22, 2012

NEWS RELEASE -- Board President Proposes New Bond Will Have Conventional Financing

NEWS RELEASE from the San Diego Unified School District, August 22, 2012


SAN DIEGO -- Dr. John Lee Evans, president of the San Diego Unified School
District Board of Education will ask the Board at its next meeting to
ensure that Proposition Z, the district's bond proposal on the November
will only use conventional bond financing, similar to a home mortgage.

Evans' resolution, which must be approved by a Board majority, would
prohibit use of the use of so-called capital appreciation bonds (CABs).
The next scheduled regular meeting of the Board of Education is Tuesday,
Sept. 4.

"In light of the recent focus on the use of CABs, I want to make the
intent of the Board and the policy of the District clear," Dr. Evans
stated. "I am putting forward a resolution that will clearly state that it
is the intent of the Board that Proposition Z will not use Capital
Appreciation Bonds."

Proposition Z should only employ conventional bonds, which function almost
identically to home mortgage; interest payments and principal retire the
debt on a current interest schedule, he added.

"The new tax rate included in Proposition Z will allow the district to use
regular current interest general obligation bonds," he said. "Therefore,
under Prop. Z, there should be no need for the district to make use of
Capital Appreciation Bond financing."

Proposition Z authorizes the District to raise and spend badly needed
funds for local schools, Evans noted, with all funds being raised and
spent locally.

Proposition Z will generate the revenues needed to pay off the bonds on a
"pay-as-you-go" basis. Under Evans' resolution, the District will use
conventional 20- to 30-year bonds and not 40-year CABs with deferred
payments that increase overall costs.

"We recently reached an agreement with the teachers union for concessions
to keep the teachers in the classroom and to balance the budget at the
same time." said Evans. He pointed out that the recent deal to save 1,500
teacher jobs followed the same pay-as-you-go principle. He stressed that
his resolution will apply this same fiscal discipline to the
implementation of Prop Z.

The Board placed Proposition Z on the November ballot at its July 24
meeting. It will generate local funding to build and renovate classrooms
and for technology upgrades for neighborhood and charter schools.

"Proposition Z must be open and transparent about both the expenditures
and the generation of local funds from the property tax assessment that
will support our local schools," said Evans. The measure includes annual
audits and an Independent Citizens Oversight for the public to have
certainty that bond funds will be spent as promised.


CONTACT: Dr. John Lee Evans, President, Board of Education, (858) 361-5151.

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