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>> >>PEGGY: IN 2008, VOTERS APPROVE AD DEAL WITH THE POWAY UNIFIED SCHOOL DISTRICT TO
BORROW MORE MONEY TO COVER CONSTRUCTION DEBTS IN EXCHANGE FOR A PROMISE NOT TO RAISE PROPERTY
TAXES. UNDER THE AGREEMENT LAST YEAR THE DISTRICT
BORROWED $1,005,000,000 FROM INVESTORS, BUT THE 105ハBILLION DOLLARS, INVESTIGATIVE REPORTER,
WILL CARLESS WITH VOICE OF SAN DIEGO IS HERE TO TALK ABOUT THE LOAN, IF VOTERS KNEW WHAT
THEY WERE GETTING INTO, AND ABOUT OTHER SCHOOL DISTRICTS IN SIMILAR SITUATIONS.
WILL, WHY IS THIS LOAN SO UNUSUAL? >> >>WILL CARLESS: IT'S MAINLY UNUSUAL, BECAUSE
WHEN YOU THINK ABOUT A LOAN, YOU THINK ABOUT BORROWING MONEY OVER A PERIOD OF TIME, AND
THEN KIND OF PAYING IT OFF YEAR BY YEAR. THEY'RE DOING THAT, BUT THEY'RE NOT PAYING
ANYTHING FOR 20 YEARS SO THEY BASICALLY GET 20 YEARS FREE, THEY DON'T HAVE TO PAY ANY
PAYMENTS TOWARDS IT AND THEN THEY HAVE TO PAY IN THE NEXT 20 YEARS.
THAT MAKES IT VERY, VERY EXPENSIVE TO BORROW THAT MONEY, WHICH IS WHY WE LOOK AT THESE
BILLION DOLLARS FIGURES. >> >>PEGGY: IT'S CALL AD CAPITAL APPRECIATION
BOND. IN TERMS OF AN INDIVIDUAL LOAN, BALLOON PAYMENT,
INTEREST RATES, THIS SOUNDS LIKE IF I WERE A CONSUMER GOING OUT AND GETTING THIS KIND
OF LOAN T SOUNDS LIKE A DESPERATE LOAN. >> >>WILL CARLESS: I THINK I SAY IT'S DEFINITELY
A DESPERATE MEASURE, THEY'VE ADMITTED AS MUCH. OTHER SCHOOL DISTRICTS HAVE ADMITTED THIS
IS KIND OF OUR LAST OPTION. IT IS.
I THINK I SAY IN MY STORY, YOU KNOW RK IT'S KIND OF LIKE AN INTEREST ONLY LOAN, BUT YOU
DON'T PAY THE INTEREST FOR 20 YEARS F.YOU CAN IMAGINE GOING INTO YOUR BANK AND ASKING
FOR THAT, I WANT TO BUY THIS HUNDRED THOUSAND DOLLAR HOUSE, I'M NOT GOING TO PAY YOU FOR
20 YEARS, ITS IT'S GOING TO COST A MILLION BUCKS TO DO THAT.
>> >>PEGGY: HOW WAS THIS SOLD TO VOTERS? THEY SAID GO AHEAD, TAKE THE MONEY AND RUN.
>> >>WILL CARLESS: THE VOTERS APPROVE A BOND, THEY APPROVE THE GENERAL CONCEPT OF LOANING
MORE MONEY, BORROW 180ハMILLION DOLLARS, AND THAT HAPPENED IN 2008.
VOTERS WERE NOT TOLD WE'RE GOING TO BORROW IN THIS WAY, IT'S GOING TO COST THIS MUST
MUCH, THEY WEREN'T TOLD ANYTHING ABOUT THE FINANCING OF IT.
THEY WERE TOLD YOUR TAX RATE IS GOING TO STAY THE SAME, FOR LONGER.
THE SECOND STAGE IS ACTUALLY IN 2000 WHEN THEY DID THE DEAL, THAT'S DONE BY THE SCHOOL
DISTRICT, BY THE SCHOOL BOARD. THERE IS A SORT OF CURSORY PUBLIC MEETING,
BUT VOTERS AREN'T REALLY INVOLVED IN IT AT THAT STAGE.
>> >>PEGGY: WHEN IT CAME TO THE VOTERS IT WAS NT CLEAR TO THEM THAT THIS IS WHAT WAS
GOING TO HAPPEN, 981ハMILLION TO PAY BACK THIS LOAN.
SAN DIEGO COUNTY TAX PAYERS ASSOCIATION ENDORSED IT.
DO YOU THINK THAT INFLUENCED THE VOTERS FOR APPROVING THIS? I HAVE NO DOUBT THAT THE TAX
PAYERS U ENDORSEMENT AND A CONSERVATIVE PLACE LIKE POWAY DOES CARRY A LOT OF WEIGHT IT'S
A LITTLE BIT UNFAIR TO PLACE ALL THE BLAME ON THE TAX PAYERS ASSOCIATION.
IT LOOKS LIKE THEY WERE TOLD BY POWAY, AND WE'RE STILL TRYING TO FIGURE THIS OUT, THAT
THIS WAS ACTUALLY GOING TO COST A LOT LESS. THEY DID ASK ABOUT THE INTEREST AND THEY WERE
TOLD IT WOULD COST SOMEWHERE IN THE REGION OF 4 OR 5ハMILLION.
THEY APPROVED IT, BASED ON THAT INFORMATION. OBVIOUSLY IT'S ENDED UP COSTING A LOT MORE
THAN THAT. SOMEONE COMES TO YOU AND SAYS IT'S GOING TO
COST THIS MUCH, YOU APPROVE IT, IT TURNS OUT TO BE MORE, CAN YOU BE BLAMED FOR MAKING THAT
APPROVAL. >> >>PEGGY: CAPITAL APPRECIATION BONDS WERE
BANNED IN THE STATE OF MICHIGAN. THERE'S OTHER SCHOOL DISTRICTS IN SAN DIEGO
THAT HAVE THIS TYPE OF BOND. >> >>WILL CARLESS: THAT'S RIGHT.
I THINK SAN DIEGO UNIFIED HAS SEVERAL OF THESE, INCLUDING A VERY BIG ONE FROM T FOR LAST YEAR,
160ハMILLION THAT TURNS INTO OVER A BILLION. WE KNOW THAT ESCONDIDO UNION HIGH SCHOOL DISTRICT
AND OCEANSIDE DISTRICT HAS THEM. I THINK THAT'S JUST THE TIP OF THE ICE BERG
AS FAR AS CALIFORNIA IS CONCERNED. WE PUT UP A FIVE STEP HOW TO GUIDES SO ANYWHERE
IN CALIFORNIA CAN USE THAT GUIDE TO SEE IF THEIR LOCAL SCHOOL DISTRICT IS ENTERED INTO
A LOAN LIKE THIS. >> >>PEGGY: IF THE SCHOOL DISTRICT HAS ENTERED
INTO A LOAN, ESPECIALLY IN POWAY, SAN DIEGO UNIFIED, COSTLY, WHAT CAN PARENTS OR VOTERハ
CAN THERE BE ANYTHING WE CAN DO TO RECTIFY THE SITUATION?
>> >>WILL CARLESS: IT DEPENDS WHETHER THE DEAL CAN BE REFINANCED.
IN POWAY THEY'RE LOCKED INTO THAT DEAL. IN SAN DIEGO UNIFIED I BELIEVE THEY CAN REFINANCE
THAT DEAL. AT THE END OF THE DAY, WE LIVE IN A DEMOCRACY,
PEOPLE CAN COMPLAIN, ASK FOR HEADS TO ROLL, VOICE THEIR DISPLEASURE.
SO I THINK POWAY'S FIRST BOARD MEETING IS ON AUGUSTハ20, I THINK IT'S GOING TO BE AN
INTERESTING ONE. >> >>PEGGY: ABSOLUTELY.
WILL CARLESS, VOICE OF SAN DIEGO. THANKS FOR EXPLAIN THIS TO US.