Like other school districts seeking additional property tax hikes through additional school bonds, Coronado Unified School District (CUSD) has hidden a lot of important information from voters.
And the information that CUSD has revealed is difficult to understand.
The reason is that if voters know what Prop E really means, then they will vote NO.
Here’s your guide to what Prop E really means.
Prop E Property Tax Hike is Too Risky
By their own admission, CUSD intends to “rake in” $29 million in public debt financing with Prop E.
The cost plus interest to Coronado property taxpayers is much HIGHER than the $29 million that CUSD wants to “rake in” for itself in order to pay off its old debts.
How much will Prop E cost Coronado homeowners? Too much. We can’t afford it.
Prop E is too expensive. Read our prior KissTheSchoolBondGoodbye.com article on CUSD’s $200+ million debt by clicking here.
Forget the Emotional Hype, Prop E Supporters are Highly Self-Interested
Forget the rumors you heard from pro-Prop E tax hike supporters.
None of their generalized statements and fact-free propaganda that they’ve frantically spread around our community before rushing this tax hike onto the ballot has any true meaning. Forget what they’ve told you.
The Prop E property tax hike is a hard sell. If voters understand Prop E, they won’t vote for it.
Most, if not all, on the list of pro-Prop E tax hike supporters and ballot “signatories” have a high degree of self-interest in seeing Prop E pass on election day:
- Elected officials, past and present, who created financial problems for CUSD in a variety of ways over the years,
- People responsible for the School Pool fiasco,
- Administrators, directors, teachers and others employed by CUSD who “toe the party line” for their job,
- Parents hoping to get good grades, positive recommendations and favorable treatment for their children who are students of people employed by CUSD,
- Local business owners who supply goods and services to CUSD as outside contractors,
- Other outside contractors, sub-contractors and suppliers to CUSD,
- Wannabe outside contractors, sub-contractors and suppliers who try to curry favor with CUSD, and
- Many of the relatives of all of the above people.
We are disappointed, but not surprised, that many of these Prop E supporters have stated that they are “proud” to vote for the Prop E property tax hike against US — their neighbors, friends and acquaintances. As the saying goes, with friends like that who needs enemies?
The Prop E supporters shouldn’t be proud. They should be ashamed. Pay them no attention.
Prop E NO Voters Love Our Neighbors & Protect Our Proposition 13 Guarantees Against Unreasonable Prop E Property Tax Hikes
Coronado homeowners and business owners who endorse a NO vote on Prop E are indeed proud that we stand WITH our neighbors, friends and acquaintances AGAINST yet another property tax hike.We won’t force a property tax hike on OTHERS because we don’t want OTHERS to force one on us.
We know it’s important for CUSD to live within its means. And we know CUSD won’t live within its means if they know they can keep coming back to us, Coronado property taxpayers, for additional tax hikes. CUSD must stop taking the easy way out and, instead, make the hard choices and make reasonable budget cuts.
Also, we are proud of our California State Proposition 13 protections against such unreasonable property tax hikes that are above the constitutionally guaranteed limit. Voting for Prop E violates and removes our Proposition 13 constitutionally-guaranteed limit on our property taxes.
We’re proud to vote NO on Prop E on June 3.
Ballot Pamphlet Materials Are Key to Understanding What Prop E Means
When you receive your ballot pamphlet in the mail, you’ll see that there are many parts to it. It’s 10 pages long.
If you don’t want to wait, you can click here to read all 11 pages of the Prop E ballot pamphlet materials online at the San Diego County Registrar of Voters website.
Like other school districts, CUSD is counting on the fact that many voters will either fail to read the ballot pamphlet materials or not know what to focus on if they do read it.
Some of the ballot materials are long. CUSD supplied most of the ballot items. CUSD’s materials seem complex and confusing. It’s difficult to know what information is relevant, what’s irrelevant, and what’s meaningless.
If you’ve analyzed school bond measures in other districts, then you realize that much of the information supplied by CUSD for Prop E is boilerplate, cookie-cutter language intended to mislead voters into approving a property tax hike upon THEMSELVES and their NEIGHBORS and FRIENDS.
After all, the Prop E property tax hike is a hard sell.
Who would vote to RAISE their own property taxes? Not anyone in their right mind.
If voters know what Prop E really means, then they will vote NO.
Six Parts of Prop E Ballot Material as They Will Appear in Your Ballot Pamphlet
In your ballot pamphlet, available for you to read by clicking here, you will see these items for Prop E:
- Actual Ballot Measure E Language supplied by CUSD –Important, but all you need to know are 14 hidden words of great risk.
- Impartial Analysis of County Counsel as Required by Law — Very important, especially three paragraphs at the start which prove that Prop E bond interest rates can go up to the high of 12% and bond duration can last up to 40 years. This factual analysis is NOT supplied by CUSD. It is required by law in order that voters receive the true facts about the Prop E property tax hike. It proves CUSD’s claims are wrong about the cost of Prop E to Coronado taxpayers and the number of years that Coronado taxpayers will be forced to pay off CUSD’s Prop E bond debts.
- Tax Rate Statement supplied by CUSD Superintendent Jeff Felix as Required by Law — Important, because this also proves CUSD’s claims are wrong about the cost and duration of Prop E to Coronado taxpayers. It contains rosy “best estimates” from unidentified “official sources” of the costs to Coronado homeowners of three Prop E school bond issues at the low 1% interest rate is around $40 per year per $100,000 assessed value of Coronado property. CUSD’s rosy “estimates” are immediately followed by CUSD’s extensive legal disclaimer that states that CUSD’s “best estimates” aren’t legally binding on CUSD or enforceable by Coronado property taxpayers because CUSD can’t guarantee the cost or duration of the Prop E bond debts.
- Arguments For and AGAINST Prop E — To read our 2 arguments AGAINST Prop E, click here and here. At the time of this writing, CUSD hasn’t disclosed its arguments for Prop E to Coronado voters.
- Project List supplied by CUSD as Required by Law — Important, it’s in the four-page “Full Text Ballot Measure” at the end of your Prop E ballot materials. Near the very end of its Project List, CUSD hid its plans to pay for old School Pool debts in the cryptic phrase “re-financing of any outstanding lease obligations.” Also, CUSD states its plans to pay for Operating Costs including “landscaping”, “painting buildings,” “enhancing signage” and “tech” upgrades that can include purchasing iPads that will break or become obsolete before Coronado taxpayers pay off CUSD’s Prop E bond debts.
Hang in there, Coronado voters. We’ll walk you through it.
Ignore all of the fluffy, emotional buzzwords in the Prop E measure before the word “shall.”
Skip over all of this front-loaded fluff because these words are meaningless and empty. They have no legal force and effect. CUSD, like other school districts, calculated that voters will stop reading partway through this mess:
“To provide modern classroom technology and facilities students need for college/career success, continue advanced programs in math, science and the arts, acquire, construct and repair classrooms/facilities/sites/equipment, permit smaller classes, and protect Coronado’s quality of education . . .”
Pay attention to the middle of the ballot measure where, like other school districts, CUSD hid the real meaning of Prop E:
“. . . shall Coronado Unified School District issue up to $29,000,000 in bonds at legal rates . . .”
This means that CUSD can’t legally guarantee that CUSD will definitely issue Prop E bonds at 1% interest rates and Coronado homeowners will pay them off in 5 years because CUSD doesn’t control the bond market.
In reality, it’s important for voters to know that:
- Legal rate of bond interest is UP to 12%
- Legal rate of bond duration for Coronado taxpayers to pay back CUSD’s bond principal and interest is up to 25 or 40 years.
How do we know the above two facts? Because the Independent Analysis of County Counsel tells us these facts later on in the ballot pamphlet materials.
Skip the rest of the Prop E measure language because it’s meaningless.
It’s simply more meaningless filler that hides the true risks and actual costs of Prop E:
“. . . with maturities under 5 years, all bonds repaid by September 30, 2024, less than $13,200,000 outstanding at any time, independent citizen oversight, and all money staying local?”
Many smart voters will stop reading Prop E materials here, vote NO on Prop E, and move on to the next ballot item.
Impartial Analysis of County Counsel – Paragraphs 1, 2 and 4 Prove Prop E Bond Interest Rates are Up to 12% & Prop E Bond Durations are Up to 40 Years
The County Counsel is required to make and publish an impartial analysis for every ballot measure because, simply put, school bond proponents like CUSD are greedy for tax hikes and can’t be trusted to tell the truth.
Why not? Because if voters know the truth, they won’t vote for Prop E.
Here are the critical statements to look for in the County Counsel Impartial Analysis in your ballot pamphlet:
“. . . In exchange for the money received from the holders, the District promises to pay the holder of the bonds an amount of interest for a certain period of time, and to repay the bonds on the expiration date . . .”
This means that the only legally binding and enforceable promises are the ones CUSD make to whoever holds, or buys, the bonds. All of the promises about Prop E that CUSD made to Coronado homeowners, Coronado taxpayers and Coronado voters are legally unenforceable because they’re not legally binding.
Paragraph # 2:
” . . .The purpose of this tax is to generate revenue to pay the principal and interest on the bonds in an amount sufficient to pay the interest as it becomes due and to provide a fund for payment of the principal on or before maturity. . . “
This means that CUSD seeks additional revenue in the form of a property tax hike on Coronado property taxpayers who are responsible to pay both $29 million principal PLUS interest on the Prop E school bonds which is an expensive form of public debt financing.
” . . . The interest rate on any bond, which is established at the time of bond issuance, could not exceed 12% per annum [year]. The final maturity date of any bond could be no later than 25 years or 40 years after the date the bonds are issued as determined by the District . . .”
This means that if voters approve the Prop E school bonds, then CUSD has sole discretion to issue school bonds at UP TO 12% interest rates and Coronado homeowners could be forced to pay off CUSD’s bond debt for UP TO 25 or 40 years.
Why is this so? Because CUSD isn’t in control of the bond market, so CUSD doesn’t control bond interest rates. Bond interest rates are the costs of borrowing money to pay CUSD’s old debts.
Key relationships to understand are: The higher the interest rate, the higher the cost of the school bond debt that Coronado homeowners will be forced to pay and the longer it will take Coronado homeowners to pay it off.
If you approve the Prop E property tax hike, then you give sole control to CUSD over when they issue VARIOUS SERIES of bonds which means the interest rates could be VERY HIGH, up to 12%, and most likely HIGHER than CUSD has tried to trick you into believing they will be.
If you approve the Prop E property tax hike, then you give sole control to CUSD to force homeowners to pay back CUSD’s school bond debt for UP TO 25 or 40 years. Prop E is too risky.
- Coronado homeowners will “only” have to pay 1% interest on 5-year bond debt issues,
- It will “only” cost Coronado homeowners around $40 per year per $100,000 of assessed property value,
- The average Coronado homeowner will “only” have to pay around $280 per year for the Prop E property tax hike,
- The school bond for $29 million will “only” cost Coronado property taxpayers around $40 million in principal plus interest to pay off, and
- Coronado taxpayers will “only” need 10 years to pay off all CUSD’s Prop E bond debts because all Prop E bonds will be paid off by 2024.
Specifically, on CUSD’s “Fact Sheet as of March 2014,” which you can read by clicking on CUSD’s school website here, CUSD printed this fiction as the last statement on page 2:
Taxpayer Expense: The $29 million bond translates to $39.87 per year for every $100,000 of assessed valuation. The median assessed value in Coronado is just below $700,000, which means that the majority of Coronado homeowners will pay less than $280 a year on account of Proposition E.
Prop E is the worst of ALL possible worlds because it gives CUSD sole control to burden Coronado homeowners with bond debt at legal interest rates up to 12% to be determined by the bond market that CUSD doesn’t control for as long as it takes homeowners to pay back CUSD’s bond principal and interest with the legal duration of up to 40 years. Yikes!
Many smart voters will stop reading Prop E ballot materials here, vote NO on Prop E, and move on to the next ballot item.
Tax Rate Statement by CUSD Superintendent Jeff Felix Has an Extensive Legal Disclaimer that Proves CUSD’s Costs Estimates for Prop E are Meaningless and Legally Unenforceable
Every voter who reads and understands CUSD’s legally required Tax Rate Statement will vote NO on Prop E and move on to the next item in their ballot pamphlet.
We’ve printed it here in its entirety because we don’t want you to miss it in your ballot pamphlet.
This is CUSD’s legally required admission that its entire pro-property tax hike campaign is, at best, a hopeful fiction by CUSD:
TAX RATE STATEMENT
CORONADO UNIFIED SCHOOL DISTRICT BOND MEASURE E
To: The voters voting in the June 3, 2014 election on the question of the issuance of $29,000,000 General Obligation Bonds of the Coronado Unified School District.
1. The best estimate from official sources of the tax rate which would be required to be levied to fund principal and interest payments during the first fiscal year after the first sale of bonds (Fiscal Year 2014-2015), based on assessed valuations available at the time of the election and taking into account estimated future growth, is the following:
$.03987 per $100 of assessed valuation, which equates to $39.87 per $100,000.
The above extensive legal disclaimer by CUSD in red text proves what we’ve been saying: CUSD’s promises to Coronado homeowners about the costs and duration of Prop E to Coronado homeowners are completely empty and meaningless. Remember, CUSD can’t guarantee interest rates or bond duration rates because CUSD doesn’t control the bond market.
As such, the Prop E supporters’ rosy promises are legally invalid and unenforceable, bless their little hearts. CUSD’s Tax Rate Statement, including CUSD’s extensive legal disclaimer, makes our point in black and white.
CUSD hasn’t disclosed the “official sources” responsible for the “best estimates” of the Prop E bond debt that CUSD expects Coronado homeowners to pay as a property tax hike. The investment advisors to whom we spoke think CUSD’s numbers aren’t realistic. The investment advisors to whom we spoke think CUSD is trying to pull the wool over voters’ eyes. Prop E is a bad deal for Coronado taxpayers.
Simply put, this Tax Rate Statement disclaimer means all promises by CUSD to Coronado homeowners are null and void.
Prop E is a disaster for Coronado homeowners, and for Coronado renters who naturally pay rent increases when property tax hikes are passed through to them.
Project List by CUSD Proves CUSD Plans to Spend Prop E Bond Debt Proceeds on Paying Old Debts from the School Pool Fiasco as well as Various Operating Costs
It’s long. It’s dull.
Here are the two main points about CUSD’s Project List:
(1) Many of the listed projects should be paid out of the General Fund, NOT through school bond debt principal and interest. In this Project List CUSD gives voters CUSD’s blueprint for financial mismanagement by showing in black and white that CUSD is plans to finance OPERATING COSTS though school BOND DEBT. Yikes!
Prop E reeks of CUSD’s financial failures because CUSD’s Prop E Project List demands expensive school bonds to finance CUSD’s regular OPERATING COSTS including:
- “tech” upgrades, which could be iPads, that will be obsolete, broken or stolen before Coronado homeowners have paid off CUSD’s Prop E school bond debts,
- “painting buildings,”
- “enhancing signage,” and
- more operating costs.
Don’t waste your time reading the entire Project List. It’s not worth it . . . unless you want to see why all the business owners, outside contractors, outside sub-contractors and wannabes want to raise YOUR property taxes. The Project List points directly to their individual self-interests.
“The Project List also includes the refinancing of any outstanding lease obligations, or the bridge loans taken to initiate voter approved projects.”
This hidden sentence is CUSD’s clear-as-mud disclosure that CUSD intends to use the new Prop E bond proceeds to pay off old CUSD debts.
Specifically, CUSD’s “outstanding lease obligations” are the Certificates of Participation (COPs) through which CUSD finagled the School Pool fiasco WITHOUT VOTER APPROVAL.
In this way, Prop E is a sneaky re-finance plan for the School Pool fiasco.
Whatever “bridge loans” CUSD has hidden from us we can’t verify at the time of this writing.
Perhaps the greedy bond salesmen, bond underwriters, and bond managers who are running CUSD’s bond campaign are being paid for their pro-Prop E campaign work with a “bridge loan” from CUSD’s General Fund or other fund. This is generally how taxpayers are forced to pay the costs of the tax hike campaign. Notice the tidy pass through there of OUR tax dollars from Coronado taxpayers to the team of highly paid bond salesmen, underwriters and mangers. That’s additional money CUSD wants to squeeze out of us that doesn’t help STUDENTS.
When we find out the cost of the “bridge loans” CUSD plans to pay off with Prop E school bond proceeds, we’ll let you know. CUSD hasn’t disclosed that important information to voters yet.
There is an awful lot of important information that CUSD hasn’t disclosed to Coronado voters. Like other school districts who campaign for school bonds, CUSD is hiding the truth because if voters know the truth, they won’t vote for Prop E.
CUSD has disclosed the bare minimum of information as legally required for their Prop E property tax hike. But even then, CUSD’s information is incomplete, inaccurate, and misleading to voters.
It shouldn’t be so difficult for us to find the facts in order to disclose the information for voters to make an informed vote.
CUSD should be open, honest and transparent. CUSD should analyze the Prop E information in a way that informs voters, not confuses us. CUSD has the responsibility to disclose the facts. After all, CUSD wants OUR money in the form of a property tax hike on US.
CUSD wants Other People’s Money (OPM) . . . OUR property tax dollars in the form of yet ANOTHER property tax hike . . . so CUSD has the burden to inform US.
What has CUSD failed to provide for Prop E? As we analyzed in our prior article here which explains the 11 problems with Prop E that San Diego County Taxpayers Association found:
- CUSD hasn’t met criteria for Prop E School Bond Description,
- CUSD hasn’t met criteria for Prop E School Bond Budget & Funding, and
- CUSD hasn’t met criteria for Prop E School Bond Execution.
Does CUSD provide sufficient financial statements to which we can turn to look up information that CUSD fails to provide for Prop E? Heck, no! As we analyzed in our prior article here, the auditor found 21 problems with CUSD’s books for the year ending June 30, 2012. If you find CUSD’s 2013 audit in the public domain, let us know.
CUSD’s “official” information on Prop E is misleading at best. The CUSD school website and the CUSD bond campaign website are devoid of the facts and analysis that voters need to make an informed vote. They confuse voters.
Why? Because voters who know the true facts will vote NO on Prop E on June 3.
Vote NO on Prop E on June 3
It’s important that all NO voters turn out to vote NO on or before June 3 because CUSD only needs 55% of the voters who turn out for the June 3 election to vote yes in order to RAISE our property taxes.
You may already know that Prop 39 eroded Propoition 13’s reasonable requirement that 66.6% of voters must approve all property tax hikes through school bonds.
Prop E is a Prop 39 school bond measure and, as such, only requires 55% of Coronado voters who vote in the June 3 election to approve the Prop E property tax hike on the ENTIRE CITY OF CORONADO . . . including all residential and commercial property owners.
Your NO vote is the most important thing.
But if you can volunteer to help our campaign AGAINST the Prop E property tax hike in any further way, please click here.