Measure CK: Interest Rates Disinterest
Mike Naoum, a self-described taxpayer with a Master’s degree in finance, has examined The Sulphur Springs School District $72 million bond measure and determined the interest rates should cause voter disinterest in passing it.
“It would encourage interest costs of $285 million dollars according to the district’s projections,” said Naoum.
The bond called Measure CK for “Classrooms for Kids” will be issued in four series. According to Naoum, Series A would issue about $34 million in debt and has interests costs of $55 million.
“The interest costs for B through D are the ones that are extraordinary. They’re $230 million,” said Naoum.
Joan MacGregor, co-Chairperson for Yes on Measure CK and Board Trustee for the College of the Canyons says the bond is similar to buying a home on a 30 year mortgage.
“Obviously you’re going to be paying interest over that period of time which you borrowed but you get to use that house for the 30 years. You don’t have to wait until the 30th year to move in,” said MacGregor.
MacGregor says the bond money is needed now to replace the roofs at some schools, for a technology endowment, and for the remodeling of buildings that are almost a half century old.
“One concern is Valley View’s special educational area which is for medically fragile students. That building is 40 years old, it desperately needs to be upgraded and a lot of the infrastructure needs to be replaced at that school,” said MacGregor.
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Naoum doesn’t like the way the board resolution is worded saying the district could spend the money on just about anything.
“They could use it to fill gopher holes on hillsides. They could use it to paint,” said Naoum.
MacGregor counters that assertion saying the goals of the district are specific and there is proper oversight established.
“It will not go for salaries, pensions, or benefits for any employee in the district. The money will stay local. It will not go to the state of California. And there will be a committee, an oversight committee, that will be monitoring the use of this bond,” said MacGregor.
MacGregor likes to emphasize to voters that the bond requires no increase in taxes. Measure CK would function like the $60 million dollar bond passed by homeowners in the Newhall School District on November 8th. In that case, the district board asked voters to view Measure E not as a new tax but simply as an extension of previous bond Measure K which was expiring.
MacGregor says an old Sulphur Springs School District bond is ending in 2016 and Measure CK could begin in 2017.
“So in effect there will be no tax increase. And since the new bond is less than the old bond, taxes will drop by 2/3rds,” said MacGregor.
Naoum argues that if Measure CK doesn’t pass the savings to taxpayers would be greater.
“The district is telling you, well, this is a tax decrease for you because what’s happening is the current bond measure payments for it expire in 2017. So your taxes at that point if it doesn’t pass would be zero,” said Naoum.
The bond would be repaid by property owners in the district at a rate of $30 per year for each $100,000 in assessed valuation. According to Naoum, Measure CK supporters are projecting property value to increase by 5 percent per year allowing more tax to be collected.
“The problem is that no one has a crystal ball. Will property values go up by that every year until 2064 I don’t know,” said Naoum.
Naoum gives a backhanded complement to the supporters of Measure CK. He says they’ve done their homework, and hired the right consultants.
“They’re promoting the medically fragile school kid piece and leaky roofs primarily because that’s what their polling indicated what people felt most strongly about,” said Naoum.
MacGregor seems generally surprised Naoum is against the measure not only because there has been little opposition in the public, but also because he matriculated his own children through the district.
“I don’t think he’s visited the schools. We’ve invited him to go up to Valley View. We’ve invited him to some of the sights and he just hasn’t done that,” said MacGregor.
Naoum, who wrote the argument opposed to Measure CK which will appear on the voter information booklety, says he understands schools always need more money, but when there are people struggling to hang onto their homes he says voters should question whether or not this is a good time for a bond and if this is the right amount of money to request.
“I think it’s too expensive of a measure. I think that people ought to vote no and it will put the pressure on the school board and school administrators to come up with a measure that is more in line with something that’s reasonable for the taxpayers to pay for,” said Naoum.
For details on how the Measure CK funds would be spent, click here.