A slew of consultants who brokered Poway Unified’s notorious $1 billion capital appreciation bond deal in 2011 are up for more bond work Wednesday night — though it’s unclear how much they stand to make.
District staff are recommending the school board approve the selection of special tax consultant Dolinka Group of Irvine, special disclosure counsel McFarlin & Anderson and bond underwriter Stifel, Nicolaus & Co. — which acquired firm Stone & Youngberg — to assist the district with the upcoming sale of Mello-Roos bonds.
How much in special tax bonds the district plans to sell and how much each firm will get paid isn’t disclosed on board documents. The district did not respond to a request for the amounts.
On the 2011 capital appreciation bond sale alone, Dolinka made $288,000 and Stone & Youngberg made $813,751, data from the state treasurer shows.
In that deal, brokers sold $105 million in general obligation bonds with the promise to repay investors $981 million by 2051. The district will forgo making any payments for the first 20 years as interest piles up, and pay off the debt and interest in the last 20 years.
The bond debt — which cannot be paid off early sparked statewide reforms that now limit the principal-to-debt repayment ratio for capital appreciation bonds to 4-to-1, and the number of borrowing years to 25. State law now also requires additional public notice and allow for earlier payoff.
We Stand Up for You. Will You Stand Up for Us?
Meet the players of the Billion Dollar Bond Fiasco.
COLLINS NEEDS TO BE TERMINATED FOR CAUSE ROCKING CHAIR TRIO (PATAPOW, ZANE, O'CONNOR-RATCLIFF) NEED TO BE REMOVED FROM THE BOARD
Interesting that Zane and O'Connors-Ratcliff have a problem with using the same money changers in this bond issuance of $15,000,000.But approved $180,000,000 in new financing earlier this year with the same CAB money changers including; Dolinka, and Stone & Youngberg.
Both Zane and O'Connors-Ratcliff have failed to act on numerous opportunities to remove all of the CAB money changers.Even this vote did not removed these money changers from working with PUSD in the future.
Is this all politics?Take away a small bond and give them more larger bonds down the road?
Why is PUSD staff recommending Improvement Areas bonds with Special Taxes, (a profit center for the district at the expense of the Improvement areas taxpayers)?
Zane and O'Connors-Ratcliff have not demanded a single new Request for Proposal for new financial or legal advisors.Both, Zane and O'Connors-Ratcliff have sold out that campaign promise.
IT IS TIME FOR THE ROCKING CHAIR TRIO TO GO!
Have the City/County schools learned nothing from the fiasco at Sweetwater Union High School District? Taxpayers had better start waking up, paying attention and getting involved. Parenting is not simply sending your child off to school M-F YOU NEED TO KNOW WHAT IS GOING ON AND HAVE A VOICE IN THE DECISION MAKING!
This smells alot like Crony Capitalism: the rigging of the process for allocating public dollars to most favored corporations. Dolinka (the financial advisor that got us into the Billion Dollar Bond mess) had previously gone over 10 years without any real competitive bidding. How is that responsible management of taxpayer dollars?
I will give Kimberley Beatty credit on this matter. Upon being pressured for having virtually no honest competitive process for such contracts, the district finally went through a competitive bid process and presented options for the Board to approve. However, they made the requirements for the contract so narrow that it effectively rigged the process so Dolinka would likely be the selected vendor. Guess who the Superintendent's team recommended? Dolinka. Guess who called out the rigged process and opposed the contract? Beatty (bravo!). But this was during the previous Board era when Beatty was often on the wrong side of a 4-1 decision. Guess who is recommending Dolinka again? The Superintendent's team.
Let's hope this Board pushes for transparency, competitive bidding and not rewarding financial advisors that got PUSD into the Billion Bond debacle.
All I can say is check for side deals. I have a feeling that even if there has not been a payoff as yet, there might be one down the road for someone, say, following a retirement. This doesn't make any sense otherwise.