Emery Bond Slipped In Just Before Sacramento Rules Change Would
Make It Illegal
The Emery School Board of Trustees voted unanimously Monday night to sell an $18 million Capital Appreciation Bond (CAB) to finance the closure and move of Anna Yates Elementary School to the high school site on San Pablo Avenue. The controversial new bond would be illegal if lawmakers assembling in Sacramento get their way; owing to the 34 year payback time. Emery's CAB, at 34 years, is nine years longer than the new proposed law will allow but Monday's passage gets Emery in just under the wire before lawmakers crack down on these multi-generational high interest loans.
Emeryville taxpayers will be on the hook for $18 million to finance the move of the elementary school, not including the 4:1 interest payments. In addition to this amount, the District has sold some $48 million worth of regular bonds called General Obligation bonds to build the new high school. General Obligation bonds differ from Capital Appreciation Bonds with their shorter payback time and the lower interest payments.
With the new bond sale, the Emery Unified School District is bucking the trend; taking on a CAB just as other school districts across California are being taken to task for selling the same bonds State Treasurer Bill Lockyer has called "pay day loans", owing to their high interest and long payback times.
The Tattler will report more on this breaking story in the days to come.
A headline in the New York Times this morning - about colleges/universities taking on mountains of debt to build lavish academic buildings - fits your story so well: "Building a Showcase Campus, Using an I.O.U."
ReplyDeleteIt would be wise for the citizens of Emeryville, particularly the School Board members who just mortgaged our future, to read it.
Members of the school board who voted for this have demonstrated such poor judgement that they are no longer fit to serve. They should be recalled.
ReplyDelete