The School District's 'Bait and Switch' Bond Problem - Voice of San Diego

Education UNVEILING THE UNSEEN

The School District's 'Bait and Switch' Bond Problem

A court decision over how school bond money can be spent didn’t answer a fundamental question about what latitude the school board has when making decisions.

In the beginning, there was light. And Talmadge neighborhood residents said it was really annoying.

The neighbors formed a group and called it Taxpayers for Accountable School Bond Spending. Their goal: Scrap the stadium lights at nearby Hoover High School, maintain the neighborhood.

The San Diego Unified School District had used money it borrowed through Proposition S to pay for the lights. The district intended for the lights to improve school facilities and give the school’s athletic teams a chance to host night games.

But neighbors were afraid the district would rent the fields out to whoever would pay, and that the night games would become a regular event. The lights would increase night traffic, they argued, create noise, light pollution, pandemonium.

Photo by Sam Hodgson
Photo by Sam Hodgson

They hired a lawyer, and filed a multimillion-dollar lawsuit against the district for improperly using school bond money to construct the lights and for thumbing its nose at a requirement to properly assess the lights’ impact on the neighborhood.

The residents won. On Sept. 20, the lights went out at Hoover High.

But the verdict may impact more than just football stadiums. It potentially opens the district to future lawsuits, and could ultimately change the game for how the district pitches bond sales to the public.

School board member Scott Barnett, the board’s often-cited numbers whiz who led the charge for the district’s most recent construction bond, Prop. Z, calls the judge’s decision “foolhardy” and said it “changed a half century of bond spending policy and practice.”

The legal and political implications of the ruling could negatively impact the school board’s latitude to make smart fiscal decisions based on the changing needs of the school district, Barnett said.

All parties seem to agree that the district should be allowed to modify, in relatively small ways, the list of projects included on the proposition ballot. For example, if early plans called for a school to receive 400 pieces of audiovisual equipment, but it was later discovered the school only needed 300, the change would be seen as responsible.

But Felipe Monroig, president of the San Diego County Taxpayers Association, said he’s OK with reductions to the list, but opposes any additions.

“Using (the ballot’s project list) merely as a guide that can be diverted from is a ‘bait-and-switch’ and a blow for transparency,” Monroig said.

The real question then, isn’t whether the school board can change or modify the ballot — it’s the degree to which the board has latitude when making decisions.

Too Much Information

In 2000, California passed Proposition 39, legislation that lowered the bar for a school district to win bond money, from a two-thirds majority to a 55 percent majority.

In exchange, Prop. 39 required that school districts hoping to sell bonds must formally assess their needs and then provide a list of projects they’ll fund based on that report.

Two recent school bonds passed in San Diego, 2008’s Prop. S and 2012’s Prop. Z, met this requirement to a remarkable degree. In each case, voters received a ballot that ran about 100 pages long — ballots that Barnett said were longer and more detailed than is required by law.

But, Barnett said, the district’s efforts to be transparent may have backfired.

Some San Diegans unrealistically view the original ballot as a static decree of all work that will be accomplished and are using the fine print as ammunition to dismantle specific projects they don’t like, he said.

“If we’re not required to put that level of detail on the ballot, how could a judge fault us for deviating from those details?” he said.

Barnett said there are thousands of individual projects listed on the ballot, many of which aren’t individually broken down. In fact, the original ballot even contains mistakes.

In one spot, Barnett said, there’s a call to repair a gym floor at a school where there wasn’t even a gym.

“Could we be sued over that, too?” he said.

‘The Bottom of the Needs List’

The stadium lighting at Hoover High School isn’t the first project to raise questions over San Diego Unified’s use of bond money.

In the spring of 2010, the City Council OK’d the “schoobrary” at the new downtown library, in which the district paid $20 million to convert two of the building’s floors into a charter school.

At the time, City Councilman Todd Gloria applauded the partnership, saying it was “the way government should work.”

But a school board member at the time, John de Beck, dissented. “It isn’t what we planned to do with the money,” he said. “It’s being log-rolled by people who have a vested interest in downtown.”

The following winter, the district caught flak for using that $20 million on a charter school while crucial improvements, such as wheelchair accessibility at school facilities, waited in backlog.

Similar concerns have been raised about the school board’s plan to use Prop. Z money to build swimming pools, for which it hopes to partner with the YMCA in order to offset operating costs.

The district’s informal two-year spending plan lists five pools that may be built between 2015 and 2017. Other reports, including the U-T’s endorsement of the plan, indicate that as many as 10 pools might be dug in the future.

It’s still too early to measure the precise costs of the joint ventures, but if the pools run $2 million to $3 million a pop, as one estimate suggested, that might be a $30 million dent in the money pot.

Chris Cate, vice president of the Taxpayers Association, said the school board’s priorities are out of whack.

“Look, nobody’s saying we don’t like pools,” he said. “But considering all the concerns of the district, swimming pools are at the bottom of the needs list.”

Barnett said he understands why people might be angry at the school board for what they perceive as a “bait-and-switch,” but said the projects they’re choosing to tackle make good fiscal sense and save money in the long run.

“We are making the decisions in the best interest of the district, which is exactly what you asked us to do when we were elected,” he said.

How vs. What

For Barnett, expanding a project that was already approved by voters is a small detail that ultimately benefits the district.

The stadium lights, downtown charter school and swimming pools are all mentioned in the ballots, after all, even if their ballot descriptions don’t perfectly match the projects they became.

Unfortunately for Barnett and the rest of the school board, not everyone agrees on that relatively broad interpretation of the ballot list.

And for Bob Fellmeth, an attorney and executive director of the Center for Public Interest Law at the University of San Diego School of Law, the small details are a big deal.

Part of why it’s confusing to distinguish an appropriate deviation from a school board overreach comes from the fact that Prop. 39 rules are ambiguous on this point.

To Fellmeth, it’s an issue of “how” versus “what.”

The district has a certain degree of flexibility as to how it spends money to complete projects, Fellmeth said, but it doesn’t have discretion as to what it spends money on.

For example, if the district planned to spend money on 1,500 air-conditioning units, but a new type of technology comes out that revolutionizes the way we condition air, judges wouldn’t begrudge the district for changing the details.

On the other hand, Fellmeth said, “If you say you’re going to build a classroom, then you spend the money on a watchtower, you’ve got problems. That’s why stadium lights are so important.”

Thus, even if the district wasn’t required to include the level of detail it sent out on the ballot, once it’s been voted on, it becomes part of the district’s stated intent. In short, legal questions are framed by what the district said they were going to do, and judges will hold them to that.

“It’s not a blank check,” Fellmeth said. “You can’t say, ‘We’ve already got the money, we can spend it how we want to now. That’s not how it works.”

If the district needs to change plans to a significant degree, “then it’s time to float a new bond,” Fellmeth said.

It’s likely the situations will repeat themselves if the school board and voters don’t find a clear way to handle the disagreements.

Barnett didn’t expound on what the school board’s strategy will be moving forward, but did offer this: “All we can do is do the responsible thing, which is to do the right thing for the right reason.”

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