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The district says its listened to critics upset with using long-term bonds to pay for short-term technology. It's now paying a lot less for iPads and other devices.
When reports about the true price of iPads purchased by San Diego Unified with bond money surfaced a few years ago, residents and taxpayer advocates scoffed.
Devices that usually cost $400 — financed over as many as 40 years with interest — ballooned to a whopping $4,000 per device when warranties and accessories were factored in.
“Wait, so we’ll be paying for these iPads when we’re like 55?” said a mock text message that appeared as part of campaign message against a 2012 school bond. The San Diego County Taxpayers Association called the iPad price tag “obscene” when arguing against the same bond effort.
School officials at the time defended the inflated cost as necessary for the rollout of a 2009 initiative that put computer devices in the hands of each of the district’s 130,000 students.
But the criticism took hold and the district made changes, said Lee Dulgeroff, San Diego Unified’s chief facilities officer. Dulgeroff oversees Proposition Z and the earlier Proposition S bond programs, approved by voters in 2012 and 2008 respectively.
“We listened to our critics,” Dulgeroff said. “We thought, ‘You know, they’re right. We really should be using shorter maturity bonds to do this.’ At the time we thought it was real important. Technology still is really important and it was important, but we felt we wanted to match the life of the device with the type of financing.”
Now, Dulgeroff said, “The device is paid off before the device wears out. It’s kind of like you and I would do. We wouldn’t take out a home equity line of credit to buy groceries.”
The district has purchased more than 87,000 personal technology devices using $43 million in bonds that are repaid in two years or less, according to district figures. The devices include 7,100 iPads, 2,400 netbooks, 32,000 Android tablets and 45,000 Lenovo laptops that convert to tablets.
Previously, in perhaps the worst case, the district in 2010 sold 40-year bonds to buy iPads at $420 each, plus $116 in warranties and accessories. No payments are being made on the bond debt for 20 years as interest compounds, then the district will spend the following 20 years paying off the bonds.
In the end, the district will pay off the iPads purchased in 2010 from 2030 to 2050 at a much higher cost, averaging almost eight times the original amount. In contrast, paying the debt off quickly at low interest rates drastically cuts down the repayment price to less than two times the original amount.
So the once $4,000 iPad is now, by our calculations, only about $700.
“We are really happy that they have worked their way back to sanity,” said Mark Leslie, president and CEO of the San Diego County Taxpayers Association. “They are doing the right thing now, using short-term financing in a good interest rate environment.”
Short-term bonds are also being used for classroom furniture and other technology equipment, like routers and electronic white boards, although no figures on those purchases were readily available, district officials said.
Here are the district’s specifics on student devices purchased over the last three years: