Image: Mostly TrueStatement: “Anyone can buy an iPad for $399 but the school board is paying $2,500 apiece,” according to a much-circulated press release from the San Diego County Taxpayers Association.

Determination: Mostly True

Analysis: The San Diego County Taxpayers Association has recently had a lot to say about why it’s not supporting the San Diego Unified School District’s $2.8 million bond.

Its latest argument against Proposition Z is documented in a commercial and a meme. Both feature what seems to be a pretty outrageous claim: that the school district used another bond approved four years ago to invest in $2,500 iPads that won’t be paid off for decades.

We decided to check the numbers. How much will the district really spend on the gear?


We Stand Up for You. Will You Stand Up for Us?

The school district used some money collected under Proposition S, the bond approved in 2008, to invest in classroom technology upgrades, including more than 21,500 iPads and nearly 77,800 laptops. More purchases are planned next year.

The district argues that anyone who criticizes the spending must also consider the impact new technologies such as iPads have in the classroom.

The upgrades have resulted in more student engagement and improvements to academic performance, district Chief of Staff Bernie Rhinerson said. “This was part of an overall transformation of the classroom to create a 21st century learning environment so when you look at (costs associated with the technology), you have to look at the value this creates for the students we’re educating today.”

(For more details on the technology program, check out this video on the district website.)

But the gear, including the iPads, is costly. And district officials didn’t just waltz into the Apple store — they had to free up the cash first.

Officials used costly capital appreciation bonds, or exotic bonds, that allow them to delay debt payments for up to 20 years.

The district has said it can’t access its Prop. S dollars without such long-term loans and that technology purchases were a priority given the planned i21 technology initiative touted in its 2008 bond.

The iPad purchases came in two phases.

First, the district used a series of highly controversial 40-year bonds to buy 10,729 iPads.

The district says each iPad cost $420 plus another $116.50 for three-year warranties and accessories.

After reviewing bond documents, we calculated that the district will pay an average of about 7.6 times that amount once the final bill comes due. That means a single iPad will cost $4,077.

The district’s second purchase of nearly 10,800 iPads will be less burdensome.

The next set of bonds came with a bill that’s an average of about 5.1 times the original cost.

Our math shows the district can expect to pay about $2,731 per device for iPads purchased in the second wave.

So how did the Taxpayer’s Association get its $2,500 figure?

Group President Lani Lutar referred to an April U-T San Diego story that cited a sticker price of $370 an iPad. (When asked about the discrepancy, Rhinerson acknowledged to VOSD that the cost ended up being higher.)

The Taxpayers Association then multiplied that number by seven based on other U-T San Diego reports that suggested the bonds would cost more than seven times the principal, Lutar said.

That got them to $2,590, which has since been rounded to $2,500.

Lutar stood by that figure.

“We’ve been communicating the ratio for some time and the district has never disputed that,” she said.

Lutar said the taxpayer’s group prefers to cite conservative figures because the district could issue additional bonds or the situation could change in some way.

The numbers she cites are mostly correct. The district will likely pay more than $2,500 for each iPad over the long haul, but the group’s numbers are a bit off so we decided to label the statement mostly true.

If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.

Update: U-T San Diego watchdog team editor Ricky Young made a point in the comment section we think is worth considering. He notes that the average consumer doesn’t consider interest part of a product’s sticker price.

“If you buy a house for $150,000 and it costs $300,000 with interest, you don’t tell people ‘I bought a house for $300,000′ or even ‘I paid $300,000 for my house.’ You say ‘I bought a house for $150,000.'” Young wrote.

Lisa Halverstadt is the newest reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa.halverstadt@voiceofsandiego.org or 619.325.0528.

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Disclosure: Voice of San Diego members and supporters may be mentioned or have a stake in the stories we cover. For a complete list of our contributors, click here.

    This article relates to: Education, Elections, Fact Check, News

    Written by Lisa Halverstadt

    Lisa writes about nonprofits and local progress in addressing causes like homelessness and Balboa Park’s needs. She welcomes story tips and questions. Contact her directly at lisa@vosd.org or 619.325.0528.

    74 comments
    bigdprender
    bigdprender subscriber

    Instead, open your ears to anyone at an educational site. Find out how dire the funding situation is there. Then decide which way is the riskier vote..

    bigdprender
    bigdprender

    Instead, open your ears to anyone at an educational site. Find out how dire the funding situation is there. Then decide which way is the riskier vote..

    Marcel Lange
    Marcel Lange subscriber

    We all know the surprise is coming, its just that none of us want to know when that is.

    Cabo3232
    Cabo3232

    We all know the surprise is coming, its just that none of us want to know when that is.

    Janet Shelton
    Janet Shelton subscriber

    I am not saying that iPads are wrong, but that if we can't afford them, we shouldn't pay for them with a 30 or 40 year loan. Yes, it would be great to have books on a e-reader, but then I have to wonder why books have to be replaced because of minor changes or even significant changes. Anyone hear of a supplement? But whatever the value of any of this, if you can't afford it, don't do it or else make other changes so you can afford it. My parents drilled into my head that credit should only be used for large expenses--houses and cars. And even then, not more than you can afford.

    myearth
    myearth

    I am not saying that iPads are wrong, but that if we can't afford them, we shouldn't pay for them with a 30 or 40 year loan. Yes, it would be great to have books on a e-reader, but then I have to wonder why books have to be replaced because of minor changes or even significant changes. Anyone hear of a supplement? But whatever the value of any of this, if you can't afford it, don't do it or else make other changes so you can afford it. My parents drilled into my head that credit should only be used for large expenses--houses and cars. And even then, not more than you can afford.

    Paul Florez
    Paul Florez subscriber

    The conversation should be about why schools do not have enough funding to purchase teaching equipment, so much that they have to finance the equipment at high rates. The state has been cutting school funding since 2007, with every year resulting in even steeper cuts! If the schools had not been repeatedly raided for funds, the iPads would have cost $420 with no need to finance them!

    paulflorez
    paulflorez

    The conversation should be about why schools do not have enough funding to purchase teaching equipment, so much that they have to finance the equipment at high rates. The state has been cutting school funding since 2007, with every year resulting in even steeper cuts! If the schools had not been repeatedly raided for funds, the iPads would have cost $420 with no need to finance them!

    shawn fox
    shawn fox subscriber

    Dennis, you are being disingenuous with your straw man argument. Nobody is complaining about the principle of using an IPAD over a textbook. I agree that e-readers would be a nice change, and I'm all for it. However, bonds have never (so far as I know) been used to purchase books. Also, as far as e-readers go, an IPAD is far more expensive then a simple e-reader. Using bonds for this type of purchase is ludicrous, and that is the problem. Whatever funds are used to purchase books should be the same funds used to purchase replacement e-readers. By the way, I'm not aware of any attempt to replace books with these things so I think that you are giving the school district leaders far too much credit. If they were planning to replace text books completely with IPADs, then it's news to me!

    shawn1874
    shawn1874

    Dennis, you are being disingenuous with your straw man argument. Nobody is complaining about the principle of using an IPAD over a textbook. I agree that e-readers would be a nice change, and I'm all for it. However, bonds have never (so far as I know) been used to purchase books. Also, as far as e-readers go, an IPAD is far more expensive then a simple e-reader. Using bonds for this type of purchase is ludicrous, and that is the problem. Whatever funds are used to purchase books should be the same funds used to purchase replacement e-readers. By the way, I'm not aware of any attempt to replace books with these things so I think that you are giving the school district leaders far too much credit. If they were planning to replace text books completely with IPADs, then it's news to me!

    shawn fox
    shawn fox subscriber

    Well, no. Ricky Young is absolutely wrong. The reason that people quote the figure for a house, without interest is because it reflects the current market value. Interest paid has nothing to do with market value. People want to know what is the market value of a house in that area and at this time. Different people will qualify for different rates so telling your friends the price of the house with interest wouldn't be useful in any way. Additionally, as others have pointed out houses are far more expensive and last a heck of a lot longer than an IPAD (or any computer pad for that matter). It's a nonsensical comparison to compare the purchase of a house or a massive infrastructure project to books or computers.

    shawn1874
    shawn1874

    Well, no. Ricky Young is absolutely wrong. The reason that people quote the figure for a house, without interest is because it reflects the current market value. Interest paid has nothing to do with market value. People want to know what is the market value of a house in that area and at this time. Different people will qualify for different rates so telling your friends the price of the house with interest wouldn't be useful in any way. Additionally, as others have pointed out houses are far more expensive and last a heck of a lot longer than an IPAD (or any computer pad for that matter). It's a nonsensical comparison to compare the purchase of a house or a massive infrastructure project to books or computers.

    bigdprender
    bigdprender subscriber

    And yet Mitt was saddened to find there are people in America who summer where they winter. He developed a lifelong concern for the second homeless...

    bigdprender
    bigdprender

    And yet Mitt was saddened to find there are people in America who summer where they winter. He developed a lifelong concern for the second homeless...

    Richard Rider
    Richard Rider subscribermember

    At least you have a droll sense of humor.

    Eduardo Stephano
    Eduardo Stephano subscriber

    They're a wonderful learning resource regardless of the opinions of the usual VOSD neigh-sayers.

    zeekzeus
    zeekzeus

    They're a wonderful learning resource regardless of the opinions of the usual VOSD neigh-sayers.

    sdnative1958
    sdnative1958

    Your last question is too distasteful to answer.

    Scott Kovacik
    Scott Kovacik subscriber

    Your last question is too distasteful to answer.

    Doug Porter
    Doug Porter subscriber

    Shameful, I say, shameful.

    dougbob
    dougbob

    Shameful, I say, shameful.

    Bill Bradshaw
    Bill Bradshaw subscribermember

    If VOSD does a follow up on this story, the public needs to know whether the schools have in place any protections for our investment, or simply gave them out first come, first served.

    toulon
    toulon

    If VOSD does a follow up on this story, the public needs to know whether the schools have in place any protections for our investment, or simply gave them out first come, first served.

    Joshua Robinson
    Joshua Robinson subscriber

    Mr. Rider over the years you continually bore me with your professional neigh-saying.

    hellrod
    hellrod

    Mr. Rider over the years you continually bore me with your professional neigh-saying.

    Chris Cate
    Chris Cate subscriber

    Excellent questions Brant. Under Prop S, they have issued CABs, which have been used to pay for iPads. Their waves of purchases have been tied to a respective bond issuance. So for example, their Series C issuance under Prop S (http://emma.msrb.org/EA404239-EA316429-EA712158.pdf) and was originally reported on by Will during his stories about CABs uses a $164 million in CABs and Convertible CABs with the $1 billion payback, the 7:1 ratio. Series E (http://emma.msrb.org/EP644213-EP503441-EP904361.pdf) which purchased their latest wave of iPads uses $150 million in CABs and Convertible CABs, the 5:1 ratio. These are definitely not bonds with maturities tied to the useful life of the asset.

    ChrisCate
    ChrisCate

    Excellent questions Brant. Under Prop S, they have issued CABs, which have been used to pay for iPads. Their waves of purchases have been tied to a respective bond issuance. So for example, their Series C issuance under Prop S (http://emma.msrb.org/EA404239-EA316429-EA712158.pdf) and was originally reported on by Will during his stories about CABs uses a $164 million in CABs and Convertible CABs with the $1 billion payback, the 7:1 ratio. Series E (http://emma.msrb.org/EP644213-EP503441-EP904361.pdf) which purchased their latest wave of iPads uses $150 million in CABs and Convertible CABs, the 5:1 ratio. These are definitely not bonds with maturities tied to the useful life of the asset.

    Stuart Morse
    Stuart Morse subscriber

    Finally, the school board and district administration are responsible for how the money is spent, not the unions and not the teachers. Could you at least be honest enough to stop blaming teachers and unions (who have no control over finances and who actually voted to give money back to the district) for mismanagement and actually hold the perpetrators responsible...or perhaps you like to take shots at the "small guys" who don't have the resources to fight back?

    smorse
    smorse

    Finally, the school board and district administration are responsible for how the money is spent, not the unions and not the teachers. Could you at least be honest enough to stop blaming teachers and unions (who have no control over finances and who actually voted to give money back to the district) for mismanagement and actually hold the perpetrators responsible...or perhaps you like to take shots at the "small guys" who don't have the resources to fight back?

    Joshua Robinson
    Joshua Robinson subscriber

    This is just silly. Any money spent with using capital appreciation bonds would pretty much have these cost increases associated with it. Any construction costs to repair schools... any of those Promethean smart boards that are already installed in the classrooms. Or heck, take a look at the netbooks they bought a few years back. Those are worthless now. The only reason this is an issue is that it's an iPad and we can relate to buying one. If you don't like bonds then may I suggest paying a little more in taxes that go towards education funding. That way we aren't stuck with paying interest.

    hellrod
    hellrod

    This is just silly. Any money spent with using capital appreciation bonds would pretty much have these cost increases associated with it. Any construction costs to repair schools... any of those Promethean smart boards that are already installed in the classrooms. Or heck, take a look at the netbooks they bought a few years back. Those are worthless now. The only reason this is an issue is that it's an iPad and we can relate to buying one. If you don't like bonds then may I suggest paying a little more in taxes that go towards education funding. That way we aren't stuck with paying interest.

    Don Wood
    Don Wood subscriber

    Some additional questions: What is the income eligibility level for a student to get a free IPad? Are the IPads given to the students outright, or are they loaned to them? Is IPad use limited to the classroom or are the students allowed to take them home? Of the IPads given to poor students how many have been lost or stolen, or sold?

    Don Wood
    Don Wood

    Some additional questions: What is the income eligibility level for a student to get a free IPad? Are the IPads given to the students outright, or are they loaned to them? Is IPad use limited to the classroom or are the students allowed to take them home? Of the IPads given to poor students how many have been lost or stolen, or sold?

    Joe Jones
    Joe Jones subscriber

    dorndiego, you miss the point. Bond money is for long term purchases that factor in the value of long term financing. When you buy consumer technology products with a 2-3 year lifespan, you make a mockery of the concept. And don't try to tell me that the District will be content to have students using the iPad2 when the rest of the world is using the iPad7. Taxpayers will be digging into their pockets again.

    jad555
    jad555

    dorndiego, you miss the point. Bond money is for long term purchases that factor in the value of long term financing. When you buy consumer technology products with a 2-3 year lifespan, you make a mockery of the concept. And don't try to tell me that the District will be content to have students using the iPad2 when the rest of the world is using the iPad7. Taxpayers will be digging into their pockets again.

    Michael Louzek
    Michael Louzek subscriber

    What a waste of money. The dumbing down of education keeps getting worse

    SD MIke
    SD MIke

    What a waste of money. The dumbing down of education keeps getting worse

    Brant Will
    Brant Will subscribermember

    The question, then, is what was used to finance the iPads. If they did use a capital appreciation bond to purchase the iPads (which I would view as highly questionable) this would be a remarkably poor use of Prop S funds and raise serious questions about financial stewardship at SDUSD. I can't tell from this article what documents the author looked at in determining what pool of money was used to pay for the iPads but if they do have documentation I'd appreciate it if they were posted in an online repository for the public to review.

    brantwill
    brantwill

    The question, then, is what was used to finance the iPads. If they did use a capital appreciation bond to purchase the iPads (which I would view as highly questionable) this would be a remarkably poor use of Prop S funds and raise serious questions about financial stewardship at SDUSD. I can't tell from this article what documents the author looked at in determining what pool of money was used to pay for the iPads but if they do have documentation I'd appreciate it if they were posted in an online repository for the public to review.

    Tim Kerssen
    Tim Kerssen subscriber

    By the way, does anybody have any studies backing up Bernie Rhinerson's assertion that iPads and laptop computers "have resulted in more student engagement and improvements to academic performance"?

    timmykk
    timmykk

    By the way, does anybody have any studies backing up Bernie Rhinerson's assertion that iPads and laptop computers "have resulted in more student engagement and improvements to academic performance"?

    Pia Mantovani-Sud
    Pia Mantovani-Sud subscribermember

    I will vote a sounding NO on prop. Z and a sounding yes on prop. 30. I don't understand why we have to buy Apple products. I get the correlation between an apple and a school, but hello, there are other products out there, which are cheaper and get the job done.

    sdsunset2
    sdsunset2

    I will vote a sounding NO on prop. Z and a sounding yes on prop. 30. I don't understand why we have to buy Apple products. I get the correlation between an apple and a school, but hello, there are other products out there, which are cheaper and get the job done.

    Richard Rider
    Richard Rider subscribermember

    Needless to say, if the schools were run for the STUDENTS, the money could be found for items such as iPads. After all, properly done, such devices (or netbooks, notebooks, etc.) would allow the district to buy online textbooks that would cost far less and be more interactive than those tomes the kids have to lug around now.

    Richard Rider
    Richard Rider

    Needless to say, if the schools were run for the STUDENTS, the money could be found for items such as iPads. After all, properly done, such devices (or netbooks, notebooks, etc.) would allow the district to buy online textbooks that would cost far less and be more interactive than those tomes the kids have to lug around now.