Reply to School Board Member Affeldt's Letter

Op/Ed Contributor Brian Carver

Brian Carver’s Reply to EUSD Board Member John Affeldt

I was pleased to receive John Affeldt’s response to my letter to the Tattler because after several years of asking questions and expressing concerns, I felt this was my first experience of an honest effort by a School District Trustee to engage publicly on the issues. A few thoughts in response:

Breaking the Promise about our Tax Bills

John points out that a reasonable growth estimate of Emeryville’s assessed valuation should take into account inflation, re-assessment after sales, and the average growth rate over the last 30 years. I agree. 

However, we should also take into account that a significant part of Emeryville’s past growth has been the work of our former Redevelopment Agency, now abolished by the state. What new mechanisms cities will use given the dissolution of Redevelopment Agencies remains to be seen, but until that time, extra caution about growth assumptions seems prudent. 

In recent years Emeryville has also learned first-hand that a property’s valuation can go both up and down after re-assessment as several of the largest property owners in Emeryville successfully appealed their valuations to the County, wiping millions of dollars of valuation off Emeryville’s books. Now that these property owners have proven a method for lowering taxes, we should expect that others may follow suit, again encouraging us toward cautious growth assumptions.

But our agreement on what a holistic approach to choosing a growth assumption would look like misses the point. The latest bond issued by the School District pushes our community right up to the $60/$100k limit that the District promised not to exceed (and that is dictated by state law). There is no buffer. Since you [Mr Affeldt] acknowledge that there may be additional downturns in the future, as there have been in the past, it is this aspect of the latest bond that is troubling. We’ve spent right up to the limit and now when those downturns come, we are virtually certain to see the District’s promise broken. But, as you say, no one has a crystal ball, so we need not argue about it. I predict the Trustees’ actions have already placed us on a course that guarantees that they will break their promise. Time will tell if I am right.

Long-Lasting Facilities

You note that the current plan is for the Center of Community Life (ECCL) to have a useful life longer than the 32 year 8 month series D bond. This is good news, but overlooks two key points that I believe are more important. 

First, as I have said more than once at public meetings, Emery Unified School District Trustees are trustees in the literal sense because you [and your Board colleagues] hold public property on behalf of the people of Emeryville. By spending our entire bonding capacity on one site, while tying up our ability to issue further bonds for decades, while presenting no long-term plans for the improvement or maintenance of the other two public properties entrusted to you, the Board has behaved irresponsibly. I have been on tours and heard District Staff point out the problems with the facilities at Anna Yates and Ralph Hawley, but because of this Board’s actions we are left with no bonding capacity for decades and therefore little chance of making necessary improvements to these sites. In the future when the Board solemnly announces that it has “no choice” but to sell these properties or hand them over to competing charter schools that would further our District’s enrollment problems, it will be because of the poor choices made by the Board since the passage of Measure J, not because of circumstances beyond their control.

Second, due to one of many compromises caused by our lack of funds for this Board’s vision, the ECCL design has been scaled down to serve at most 800 students, which we nearly enroll now. That number will not remain stagnant for the next 30 to 40 years. We have instead heard Staff and past Boards insist that only with enrollment growth can we reach a size that is fiscally sustainable from an operational perspective. Greater enrollment numbers, we were told, would allow efficiencies necessary to operate, but now we are spending all of our money on facilities for one site that will barely house the current students, while investing nothing in our other properties that could have been turned to for overflow purposes. This is not an irresponsible plan; it is no plan at all.

Buildings Do Not Educate Our Children

You write about ensuring a high quality educational experience and improving the quality of our schools. I share those goals. However, I am continually disheartened by the focus on these new buildings as the key to that quality experience. Teachers teach, and sometimes good facilities can help teachers teach, but the buildings are not going to do it alone.

 "Teachers teach, and sometimes 

good facilities can help teachers teach,

 but the buildings are not going to do it alone."

This is why I am exasperated: over eight months ago the teachers presented a resolution of "No Confidence" in Superintendent Lindo, which had the support of over 90% of teachers in an anonymous vote, and yet the only public action the District has taken in response has been to praise the Superintendent. In the teachers’ statement they wrote that the Superintendent had “created an unprecedented all-time low in staff morale leaving teachers feeling unwanted, devalued, and disrespected” and that the Superintendent had “not authentically involved teachers by systematically and consistently seeking teacher's input.” This was a glaring indicator of an incredibly serious problem with the District’s ability to deliver a quality educational experience, and as a parent, I expected to see and hear about a decisive and swift response from our Trustees. This never happened.

I believe this Board, distracted by this building project, has lost sight of the things that can really make a difference to a child’s education. Yes, our facilities need to be improved, but the number of missed opportunities on the programmatic front and the number of downright backwards things I have observed are too numerous to recount here, but they mostly come down to an over-reliance on these buildings as the answers to our prayers. 

I Never Meet Anyone That Likes Co-Location

My own reasons for preferring that the elementary students remain at the Anna Yates site go well beyond safety concerns with the San Pablo Avenue site. When I speak to parents of future kindergarteners, again and again, they are absolutely aghast when they hear that the District plans to create a K-12 on San Pablo Ave. It’s often not even about safety. Rather, I believe that most parents recognize that children of different ages have different needs, and those needs can often be best addressed in a setting designed especially for them.

"Most parents recognize that children of

 different ages have different needs,

 and those needs can often be best 

addressed in a setting designed 

especially for them."

A recent overheard conversation among parents of some 7th and 8th graders focused on how poorly the needs of their middle-schoolers were being met by moving them to the Anna Yates site. After being promised specialized programming appropriate to their ages and needs, these parents felt the District had failed to deliver and they despaired at their need to find a new school for their children. The District is already doing a poor job at “shared space” and yet we are asked to place faith in its potential at the new site.

“Prudent and Measured” Bonds

You say that the Series D bond, which requires taxpayers to pay $70 million in order to receive $17 million, is “prudent and measured.” We will simply have to disagree about this. I will never be able to see this capital appreciation bond (CAB) as anything other than what California State Treasurer Lockyer called it: a payday loan. There is good reason that the State Superintendent of Schools called for a moratorium on this kind of financing and why the state legislature is considering banning this sort of CAB outright: they are absolutely terrible deals.

Imprudent Actions Can Have Collateral Consequences

You mention that you’d be willing to pay your property taxes even if they went up to $90/$100k of assessed valuation. I would too and my family’s house is probably worth about $400k, just like yours. But what two attorneys would be glad to pay is not the point. The Trustees should abide by the law, which dictates no more than $60/$100k, and the Trustees should keep their promises to Emeryville voters. When public officials betray the voters’ trust, it can cause collateral damage. This District has great challenges on the operational side of its budget and will need the parcel tax renewed in a few years. Many voters may not understand that building and operating funds are totally separate and may instead simply remember that this is the Board that makes poor financial choices. That would be truly devastating for our schools: we’d have expensive buildings that we couldn’t afford to operate. And many voters may blame all of Emeryville’s public officials, so that if the City Council decides it needs to put forward a bond measure for a bike/ped bridge or for other public projects that Redevelopment can no longer fund, they too may face voter skepticism due to the School Board’s actions.

A Way Forward

While some Board decisions cannot be undone, I do not believe our District is without hope. If this Board would change course, or if a new Board were in place, there is much that could still be done to strengthen our schools. The District should revise its plans and explore dividing the available bond funds across at least two school sites. The District should make clear that supporting teachers is a top priority and ensure that it consistently seeks teacher input and improves morale. Community engagement events should change from opportunities for the District to explain its plans to a time to listen to the concerns and ideas of all stakeholders, especially parents whose schedules don’t always allow for in-person attendance at meetings. In general, the entire focus of this District should shift from one in which we are engaged in a great building project to one in which we are engaged in a critical educational effort. Too often it seems like education is taking a back seat to the buildings.

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Brian Carver is a parent of a child in the Emery Unified School
District, was the Chair of the Measure J Citizens' Oversight Committee from March 2011-2012, and has been critical of the School Board's insistence on moving the elementary students from Anna Yates to the Center of Community Life site on San Pablo Avenue.  An attorney and Assistant Professor at the UC Berkeley School of Information, Mr Carver is an occasional contributor to the Tattler.

School Bond Refuted: Real Costs Revealed

Op/Ed Contributor

Who Wants to Be A Millionaire?

by Brian W. Carver


The Emery Unified School District's letter to explain its issuance of a soon-to-be-illegal Capital Appreciation Bond (CAB) http://emeryvilletattler.blogspot.com/2013/02/cab-controversy-emery-school-board.html skirts around several important points.

First, while the District claims to be committed to keeping its promise that tax rates will not exceed $60 per $100,000 of assessed valuation, they were only able to issue this CAB by placing their faith in an absolute fiction: the notion that property values in Emeryville will increase nearly 4% per year, every year, forever.

According to Trulia.com, the average listing price for a home in Emeryville for the week ending February 6, 2013 was $397,626. If we, like the School Board, assume that average Emeryville home will increase in value by 4% per year, it takes only 24 years before that home will be valued at over $1 million dollars. If the School Board is to be believed, the average Emeryville homeowner is already a millionaire! Just sit back and watch it unfold over the next 24 years.

The reality is much different. In March 2003, Zillow.com put the average Emeryville home value at $280,000 (median sales price was $297,000) and as of January 2013, puts it at $271,300 (median sales price is $229,300). That is, over the last ten years, while there have been some ups, the downs have left things back where we started, so that values are basically flat or down over the last ten years. The School District's rosy assumptions don't account for this. Rather than look at the last ten years as a guide, they simply put blind faith in a
never-ending 4% annual increase.

The consequences of this false assumption will unfold on your tax bill. Now that the District has bonded us to the limit, it will take only one year with less than 4% annual growth in assessed valuation to see their $60/$100k promise broken. Your tax bill is going to exceed $60/$100k. Get ready for it. Indeed, if the next 10 years are basically flat, as the last 10 years have been, you will be paying nearly $90 per $100k of assessed valuation in 2023.

Second, the legislation that is being considered in Sacramento will limit these CABs to payback periods of 25 years, while our District issued one with a term of over 32 years. This component of the legislation was well-known before our District took action, and it is pure speculation on their part that this aspect will change prior to the legislation's enactment.

The 25-year payback period limitation is important because, contrary to the Board's false comparisons: bonds for school facilities are not comparable to home mortgages.

With regular maintenance one can reasonably expect one's home to appreciate or maintain its value over at least a 30 year period. However, District officials frequently inform us that school facilities,even properly maintained, only have useful lives between 10 and 40 years, and that's ignoring the fact that our District has already used bond proceeds for items such as iPads with useful lives of about 3 years (even though Emeryville residents will continue to pay for them for decades).

The better comparison here is to financing a car whose value depreciates immediately and, even with regular maintenance, continues to decline in value until it requires complete replacement. That is our experience with school facilities and should inform the payback periods on the bonds the District issues: the shorter the better.

Instead, the District routinely disguises what a bad deal this most recent CAB was by blending its payback ratio in with the lower payback ratios the District achieved in prior bonds sales. By participating in federally-subsidized bond programs with payback periods under 20 years, the District got a good deal on these earlier bonds. But just because you got a good deal then, doesn't justify accepting this lousy deal now.

How bad are these latest Series D CABs? Unbelievably bad. The three prior bond sales were going to cost Emeryville taxpayers just over $80 million to pay back. That was expensive, but probably within our means. However, the Series D CABs, by themselves, are going to cost Emeryville taxpayers another $66,185,000 to pay back, increasing the cost of the project by over 82% to a new total payback amount of over $146 million. At current enrollment levels, it would be cheaper to present a $50,000 check to every graduate of Emery High for the next 40 years. Too bad that's not an option.

Prior to the issuance of these costly CABs, District Staff explained that without this latest bond, we could build a new high school, but we simply would not be able to also cram the elementary and middle school students onto the same site. Our School Board's insistence upon shutting down Anna Yates Elementary School is what has nearly doubled the cost of this project and forced Emeryville taxpayers to live far beyond our means.

There were alternatives that this Board refused to adequately consider. Over 70 stakeholders signed a letter asking them to keep Anna Yates open as our elementary school and simply build a less expensive high school on the San Pablo Avenue site. Our School Board refused to consider this alternative and remains doggedly committed to a project design that this City does not need and cannot afford.

Our only option now is a new School Board.

--

Brian Carver is a parent of a child in the Emery Unified School
District, was the Chair of the Measure J Citizens' Oversight Committee from March 2011-2012, and has been critical of the School Board's insistence on moving the elementary students from Anna Yates to the Center of Community Life site on San Pablo Avenue.  Mr Carver is an occasional contributor to the Tattler.