The Anaheim Union High School District Board of Trustees voted 4-1 Thursday to put a $249 million school bond issue before voters in November, the first step in financing $1.28 billion in building improvements and technology upgrades at schools across the district.

Although trustees agreed on the need for an extensive, district-wide investment in facility and other improvements, trustee Katherine Smith, the only no vote, objected to language in the bond that would allow the district to buy new property.

“I think for us to even have the flexibility to buy property and take that hunk of money from the school bond to buy property is inappropriate at this particular time in our history,” Smith said.

The bonds will fund various construction projects, campus repairs and technology upgrades, which are detailed in the facilities master plan, a five- to ten-year document outlining the district’s physical needs. The bond resolution also contains language that allows the district to use the bond money to finance the purchase of new properties “for the purpose of expanding overcrowded school sites” and to “acquire, renovate, upgrade, construct, furnish and equip facilities at other locations.”

(To read the bond resolution and entire master plan click here.)

The bond issue is enough to cover the first phase of construction, or the highest priority projects and upgrades, including major projects at Dale, Walker, and Sycamore Junior High Schools and Magnolia High School, according to staff. It is likely that, in order to carry out the total $1.28 billion in estimated projects and upgrades, the district would have to return to voters for approval of another bond issue.

Smith said given that only some facility needs would be addressed under this bond, which was largely sold as an investment in school facilities, taking any portion of the bond money to buy property would be inappropriate.

“If we are going for more [bonds], because that is our need and reality, then…we have to look at what families are being asked to pay for: taxes,” Smith added.

Other trustees disagreed with Smith, saying the language gives the district the discretion and flexibility to purchase property should it become available.

Trustee Anna Piercy argued property acquisition was essential to the district’s infrastructure needs, pointing to the need for more high schools on the east side of the district. The district has been eyeing a property adjacent to Anaheim High School for more than two years.

“If we have the ability to possibly expand the size of an already existing school, I feel we would be fools not to try to do so. There just isn’t any real land available,” Piercy said.

Smith also criticized the district for failing to include or explain the property acquisition language in mailers and e-blasts sent to residents and parents within the district.

Art Montez, an Anaheim resident and former Centralia School Board member, called the mailer a “fluff piece” and asked why the district had not included a detailed spending plan for the bonds in their communications with the public ahead of the vote. He also criticized the district’s handling of funds from its last bond issuance, Measure Z, which faced widespread accusations of mismanagement and a lack of oversight.

“We’re also looking for, as taxpayers, a sense of transparency – which is not what we see with these types of fluff pieces. It doesn’t tell me about how the money is going to be spent,” Montez said.

One audit criticized the district for overspending on construction projects, causing a $49 million shortfall, according to the Los Angeles Times. Many of the schools scheduled for improvement projects were not completed.

Since then, the district has formed a citizen oversight committee to monitor the use of bond money.

The use of school bonds to finance new construction projects has been under scrutiny statewide, amid revelations that taxpayers were sometimes on the hook for paying back up to 10 times the borrowed amount.

A new law that went into effect this year limits total payments on general obligation bonds to 400 percent of the borrowed amount.

Anaheim Union High School District staff say this time around, the district is taking measures to avoid the problems of Measure Z.

The $249 million in bonds would be issued on a “just in time” basis, every two years over a ten-year period to reduce the cost of interest payments. A conservative estimate places the total interest cost at $286 million, if the entire $249 million in bonds are issued, or a 215% repayment on the original borrowed amount.

The facilities plan also budgets 5 percent of the bonds, or $10.5 million, toward a contingency fund to account for cost increases that might occur over the life of the bond, such as inflation or construction materials, according to Facilities and Planning director Patricia Neely.

Neely said the district won’t have a final schedule of projects and priorities until it is sure state matching funds will be available.

“[The district] has a widespread understanding that the schools with most needs are first,” Neely said.

Board Chairman Brian O’Neal emphasized the district had learned its lesson.

“All the schools didn’t get as much as we wanted to do. We can go back and rehash what happened with Measure Z, [but] I think that has been vetted in the press, in the Grand Jury – its been 12 years since that began,” O’Neal said. “I am concerned, but the past is the past. We started out very poorly with Measure Z but since that time we have [had] very good management.”

“The board will not allow it to fail. We’ll be on time, and we’ll be under budget,” he added.

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