Nov 2 2018

City of Piedmont
Joint Park Commission and
Recreation Commission 

Wednesday, November 7, 2018

7:00 p.m.

City Council Chambers, 120 Vista Avenue, Piedmont, CA

 Receipt of a Report on the Revised Conceptual Plan for the Linda Beach Master Plan and
Consideration of a Recommendation to the City Council on Next Steps

A summary of the distinguishing attributes of the revised plan are as follows:

  •  A California Playscape designed with landscape buffers near the Oakland Avenue Bridge and along Howard Avenue fills the now dormant south end of the park with natural adventure play for all ages
  •  Creation of a new enclosed tot lot (~4000 sq. ft.) for children age 3 and younger at the north end of the park within the existing tot lot footprint with a new restroom building to serve the tot lot, flex space and tennis courts
  •  A Sport Court Flex Space that can serve as multipurpose outdoor recreation program space for all ages (e.g. weekday adult/senior programs such as tai chi, outdoor fitness and painting; afterschool enrichment activities such as jump rope, martial arts, arts and crafts; outdoor and overflow space for Schoolmates)
  •  An artificial turf bocce ball court that makes efficient use of space required for ADA access grading
  •  Multiple picnic areas suitable for small family gatherings
  •  New modern restrooms and storage for community youth sports organizations at the south end
  •  Significant landscape buffers at the south end of the park
  •  Two ADA entrances from Linda Avenue and stair access from the north end of the pedestrian path near Beach School to the tot lot and stair access from the tennis courts to the sports field
  •  Retention of the notable trees on site including the Melaleucas along Linda Avenue and the mature redwoods below the play field
  •  Two tennis courts with north-south orientation and slightly larger offsets than existing courts
  •  The use of permeable surfaces for hardscape areas and paths to create options for green infrastructure allowing for appropriate storm water treatment options to be integrated into the landscape
  •  Phasing approach that allows for the long neglected south end of the park to be constructed first
  •  Allows for a third phase of the project which would add a multi-purpose recreation building to the northwest corner of the park expanding indoor recreation programming opportunities for Piedmonters of all ages (bridge, mahjong, book club, yoga, art, lego, knitting, carpentry, ballet etc.)
  •  Phase three building also creates an indoor/outdoor interface that will accommodate robust and complete full day summer camp offerings as well as after school enrichment activities and small evening and weekend gatherings
  •  Fencing plan allows for controlling park use after hours

READ the prior meeting draft minutes, full staff report, and schematic plan Joint Park and Recreation Commission Meeting 11.7.18 Packet

Nov 2 2018

As a retired CPA, I applied my auditing experience to the Piedmont School Board for this election.   About two years ago, I sensed that something was amiss when I read reports that PUSD refinanced some bonds to a type (called CAB) that roughly quadrupled the bond’s interest expense.  So, using KCOM’s online video archives I studied the applicable archives.  I know the justifications that many board members used for this school financing.   But I find their decision outlandish.  Ultimately, the School Board reversed its error and switched back to CIB financing, which saved the district from incurring an additional $26 million dollars in wasteful interest expense.  As the public archives confirm, Dr. Titan’s leadership led to this $26 million savings.

If you’ve never attended a PUSD board meeting, please go to KCOM (Channel 27) and view any meeting in the archive.  You will begin to appreciate the dedication, determination, and backbone needed to accomplish what Titan has.

If you have been following the employment issues relating to the rogue teacher-student conduct, or the embarrassing decision to appoint Victor Acuna as full-time athletic director at roughly $120,000 per year.  Ask yourself, do you want a board member that has the backbone and perseverance to defend our students from such egregious personnel issues?

Prior to this election, I didn’t know Dr. Titan or any of the school board candidates, so I made a concerted effort to meet them, and study their prospective contributions.  I listened to them at two separate parents’ club candidate forums and via KCOM, I watched them speak at Piedmont’s League of Women voters’ forum.    It’s clear they are all nice people who want to make a difference for our schools.

But when you step into the election booth, set aside your friendships and vote responsibly for the one candidate that since 2013 has been working as a citizen watchdog to ensure proper conduct at PUSD.  Titan will provide the stewardship need now on Piedmont’s school board.

Dai Meagher, CPA (inactive & retired)

Oct 25 2018

Mr. Titan’s Claim That the School Board “Lost” $18.8 Million Is Baseless – 

In his October 20, 2018 Opinion posted on PCA, Mr. Titan responded to my October 17, 2018 Opinion posted on PCA. It is unfortunate that Mr. Titan continues to try to bolster his campaign by unfounded attacks on the successful Piedmont seismic bond program and by claiming credit for a bond refinancing for which he is not responsible.

Mr. Titan’s response does not support his past claims (that he saved Piedmont over $26 million) or his new claim that a past School Board “lost” $18.8 million. The District’s intent to refinance the 2013 Series E Capital Appreciation Bonds (CABs) was stated in 2013 when the Board directed their sale, so Mr. Titan did not initiate this commonsense idea (which reduced total interest payments by $26.1 million when approved in 2017). Mr. Titan’s idea that the Board “lost” $18.8 million is based on his suggestion that voters could have approved an additional bond measure to double the authorized tax rate and significantly increased their tax burden to pay off bonds more quickly. This is not “something for nothing” financial wizardry, but a legally uncertain policy proposal that would have imposed greater burdens on current taxpayers for the benefit of future taxpayers that Piedmont voters never approved.

It is worth noting that none of the current School Board candidates served on the Board from 2006 to 2013 when the seismic bond program was approved by voters and implemented by the School District. Indeed, the 2006 Measure E, authorizing the sale of $56 million in bonds to ensure the seismic safety of our schools, and the resulting school construction, occurred before some Piedmont residents moved here. Mr. Titan has chosen to attack these past School Board bond authorizations, and to claim credit for past School Board decisions, in an effort to establish his claim of financial expertise.

As an initial matter, Mr. Titan’s effort to claim credit for the refinancing of the 2013 Series E CABs remains unconvincing. (Mr. Titan makes this assertion in his October 18 campaign email). First, the Board in 2013 clearly expected to refinance the CABs in the future—Mr. Titan did not originate the idea and thus save Piedmont taxpayers $26.1 million. At the May 8, 2013 Board meeting, KNN explained the District’s ability and expectation of refunding the CABs early. http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=916 at 46:00-46:50. The Minutes also so state. http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2011_12/052213packet.pdf. Second, as discussed in my October 17, 2018 Opinion, Mr. Titan originally opposed the CAB refinancing during the Nov. 8, 2017 Board meeting. Mr. Titan helpfully pointed out that he reversed his position later in the meeting, after hearing KNN’s professional advice (My apologies for missing his change of view). However, changing his view to support KNN’s recommendation and the Board’s position does not mean Mr. Titan is responsible for the Board’s refinancing of the CABs.

Next, as I previously noted, Mr. Titan did not educate the School Board about CABs or other financial instruments, all of which were discussed in public meetings from 2006 to 2013. Mr. Titan now asserts that he educated the public about such terms as “compound interest,” etc. I suspect that most Piedmonters were aware of such terms. Mr. Titan does not mention other key terms, such as tax rate, tax impact, and taxpayer cash flow, which a School Board member must consider in assessing bond structure.

The basis for Mr. Titan’s claim that the Board “lost” $18.6 million is as follows: “My proposal was not to defer the work and financing in 2013, but to use CIBs by getting a new voter authorization.” (Titan Opinion). Mr. Titan does not explain how he calculated $18.8 million and whether he took the CAB refinancing into account. Nonetheless, an important part of a School Board member’s job is to be transparent, carefully and publicly analyze potentially feasible options, and make a prudent decision that balances many competing interests. So, let’s unpack Mr. Titan’s proposal and claim.

Mr. Titan’s idea was that the Board should have asked voters to approve a new bond measure, so that bonds under that measure would be subject to a second $60/$100,000 assessed valuation (AV) anticipated tax rate limit in addition to the $60/$100,000 AV anticipated tax rate limitation on the 2006 Measure E bonds. In other words, to repay seismic bonds, Piedmonters could have been taxed up to $120/$100K AV rather than up to $60/$100K AV. As anyone with a home mortgage knows, if you pay down debt more quickly, your total interest payments over the term of the loan go down. But you must pay more in the short term.

What would the tax impact of Mr. Titan’s proposal, if approved, have been on Piedmont taxpayers? We do not have a 2013 KNN analysis of CIB interest rates, likely term, and the tax rate necessary to make payments on such bonds. For illustrative purposes, let’s consider an additional $30/$100K AV. Added to the $60/$100K AV already assessed for outstanding seismic bonds, the total tax rate for seismic bonds would be $90/$100K AV, or $900 per year for a home assessed at $1 million (this would have been added to tax payments on older bonds). But the tax impact would vary among homeowners. Young families, which may have stretched to buy a Piedmont home and have high assessed valuations, might owe much more and have trouble paying it. Seniors might be on a fixed income and have trouble paying the tax bill.

Moreover, the new school buildings are expected to serve children for at least 50 years. While some families plan to live in Piedmont for many decades, others may stay only while their children attend school. They may be more concerned about short-term cash flow than total interest payments as they would not make many of those future interest payments. If Mr. Titan wrestled with any of these concerns, he did not explain his position.

Mr. Titan’s claim has two other defects. First, Mr. Titan has not shown whether such a bond authorization would be legal. The 2013 Series E CABs refinanced existing Bond Appreciation Notes. Proposition 39 (Article XIII-A, Section 1(b)(3) authorizes school bonds for “the construction, reconstruction, rehabilitation, or replacement of school facilities,” but does not mention re-financing other debt. KNN did not answer this question at the May 8, 2013 meeting, but rather responded to my question about a potential theater bond measure. Nor did KNN state at the October 11, 2017 meeting that the BANs could have been refinanced by CIBs without a new bond measure.

Second, Mr. Titan’s claim rests on voter approval, which is entirely speculative. Measure E itself was narrowly approved, with campaign materials indicating the sponsors’ hope that the tax rate to repay the bonds would be no greater than $20/$100K (which contemplated the use of CABs). The recession and the opportunity to obtain near-zero interest Qualified School Construction Bonds (QSCBs) required exceeding $20/$100K AV, which the Board approved after numerous meetings seeking public input. But tax rate and tax impact was a key consideration throughout the seismic bond program. Neither Mr. Titan nor any other citizen proposed Mr. Titan’s idea in 2013 in lieu of CABs. Mr. Titan did not volunteer, or identify anyone else, to run a 2013 campaign seeking voter approval of higher taxes to reduce total interest payments. Nor does Mr. Titan discuss the timing of such a campaign or election, followed by bond authorization and sale, and how it would have meshed with the need to repay the BANs.

In short, Mr. Titan’s claim that the Board “lost” $18.8 million rests on (a) his policy preference to pay higher taxes now to reduce total interest payments, without consideration of tax burden and cash flow impacts on PIedmont voters as a whole, and (b) speculation that Piedmont voters would have approved a second bond authorization, though its legality is uncertain, and no one in 2013 proposed it, no one ran a campaign to endorse it, and Piedmont voters never approved it.

Finally, Mr. Titan’s discussion of the Board’s consideration of CABs under Measure H misunderstands the fundamental responsibility of School Board members. The Board has a responsibility to identify potentially feasible options, allow public comment, evaluate feasible alternatives and make prudent decisions that it believes are in the best interests of the community. Mr. Titan asserts that having KNN present options that included CABs somehow means that the Board would have approved CABs but for Mr. Titan’s opposition. That was not the case, as Board members made clear in several public meetings.

I encourage Mr. Titan to present his views on critical issues facing the District today rather than misrepresenting what happened in the past.

Rick Raushenbush, Former Member Piedmont School Board

Oct 25 2018

The current election cycle for Piedmont School Board has past and current Board members publicly criticizing Board candidate Hari Titan. The critiques are both highly unusual in Piedmont and frankly unwarranted. Hari has given great service to both the School Board and residents by uncovering the unnecessarily high taxpayer burden of Capital Appreciation Bonds (“CABs”) and the high cost of the failed Allen Harvey rehabilitation as compared to other new School theaters. The careful analysis by Hari unearthed the grossly excessive CAB debt costs and saved Piedmont taxpayers literally many millions. Instead of denunciations there should be public thanks from School Board members.

Beyond the School Board Establishment questioning Hari’s financial analysis, the bottom line takeaway is that Hari will shake things up in a manner neither welcome nor comfortable by the School Board; and yet this is exactly what we need. Hari has the expertise, determination and courage to drill down information put before the School Board by Staff and Consultants. As the Piedmont School Tax is literally double to 100 times any other School Tax in the state, and more money will be asked for soon, Hari Titan is critically needed on the School Board now. On November 6, Hari Titan has my vote.

By Rick Schiller, Piedmont Resident

Oct 25 2018

In addition to her 18 years of volunteer service to our District, and her commitment to serving all of our students, stakeholder engagement, and balancing academic rigor and wellness, Amal is the only candidate with relevant financial skills. In her 18-year tenure at the University of California, she has been responsible for financial management, reporting, and operations. In her current role as Associate Dean for Financial Affairs at the UCSF School of Medicine, she leads a team responsible for budgeting, reporting, and planning for a $2+ Billion enterprise. She understands state funding for education, accounting reporting requirements, compliance and controls issues, and the realities of balancing competing needs with limited resources.

In 2017, the opportunity to refund the Capital Appreciation Bonds (CABs) was presented to the board by the District’s financial advisors, KNN, and not at the urging or advice of anyone in this community. Amal, along with the rest of the board, voted to refund these bonds prior to January 1, 2018, saving taxpayers $26.1 million. Amal and the board chose to act because advice from KNN indicated that there was pending national legislation that would remove the District’s ability to refund the CABs (which did, in fact, pass) and that the likelihood of rising interest rates would impact potential savings.

We support Amal because of her strong financial skills, as well as her practical wisdom and reasoned approach to all issues that are brought before the board. Please join us in voting to re-elect Amal to our school board. She’s already demonstrated that she has what it takes to serve our community.

By Dana & Mike Serleth, Piedmont Residents

Oct 25 2018

The two most critical issues facing our school district are managing the budget, and teacher recruitment and retention. Two candidates have the professional expertise and personal experience to address these issues:

As Associate Dean of Financial Affairs for the UCSF medical school, Amal Smith has extensive experience managing budgets in a complex educational environment with government regulations and many stakeholders. With her tenure at the Piedmont Education Foundation including as President, Amal has a strong record of working with multiple parent constituencies to balance, fund and support the wide range of Piedmont student interests and needs from kindergarten through 12th grade.

Megan Pillsbury, a long-time educator and PUSD teacher, has the training, classroom experience, and credibility to address teacher recruitment and retention given budget limitations. Megan knows the intangibles that influence whether a teacher loves their job or leaves: a supportive teaching environment, professional development and belonging to a community of valued teaching professionals. Megan also knows first-hand the importance of partnering with parents to create the best learning environment for their students.

Please join us in voting for Amal Smith and Megan Pillsbury for School Board.

Sincerely,

Chris & Katy Ford, Piedmont Residents

Oct 21 2018

The historical record demonstrates that Hari Titan is not spreading falsehoods (nor widely).  While I’ll refuse to respond tit-for-tat to the semantical hair-splitting to which this debate has descended (and the careful use of ellipses to cloud the discussion), I firmly and confidently state that Hari’s positive influence on improving PUSD’s financial decision-making when it comes to bond financing, is neither a myth, nor false, nor exaggerated, nor can it be overstated.

The School Board may have fully understood that the financial impact of 2013’s Series E CAB sale was expected to be an incremental $18.8M in interest payments for Piedmont taxpayers and rationalized those excess costs as a ‘necessary evil’. However, denying responsibility for that decision by declaring that there was no opposition to it at the time is tantamount to deflecting culpability on the public (which was, indeed, ignorant about the significant trade-offs CABs entail, even if the School Board was not).

It is abundantly clear, and is supported by the historical record, that Hari Titan single-handedly (and unpopularly) discovered the use of CABs, dug in and did his homework to understand the long-term financial ramifications, and explained the issue clearly to the voting public.  It is also clear that once the public was aware of the use of this ‘creative’ financing mechanism, public opposition to the continuing or future use of CABs was broad-based, vocal, and vehement.  I admire Hari’s courage in vigorously waving the cautionary flag to prevent further sale of CABs*.

It is also obvious from the historical record that the School Board was open to considering continuing use of CABs in spite of this opposition.  CAB’s were presented as a financing option to refurbish the Alan Harvey theatre (the topic became moot when the bond proposition was not passed by voters**).

CABs remained in the School Board’s consideration set for use in the most recent $60M bond approval.  Board members rationalized keeping CABs ‘on the table’ as a financing vehicle because CABs provide the District  ‘flexibility’ to continue spending on construction projects while delaying payments on them (no downpayment!  0% financing!).  The fact that current and recent School Board members claim victory for deciding NOT to continue using CABs after 2013 belies the fact that the School Board may very well have utilized CABs as a financing instrument if it were not for the fierce opposition raised by Hari Titan’s public education on the subject and the consistent and vocal preference declared by many, many Piedmont parents, taxpayers and voters for the use of more classical, steady-handed, disciplined financing methods.

Hari will also receive my vote for PUSD’s School Board.

*It is germane to this point that shortly after the 2013 sale of CABs by PUSD, the CA legislature outlawed the sale of those same CABs to CA School Districts because the usurious rates charged on them had nearly, or actually, bankrupted many school districts state-wide who were similarly ham-strung by the Recession’s impact on school district finances.

**It is worth noting, for those unfamiliar with Measure H history, that Measure H, a $13-15M bond placement to refurbish Alan Harvey Theatre, was rejected by Piedmont voters, primarily due to the courageous communication and diligent research supplied by Hari Titan and Alicia Kalamas, which credibly questioned the District’s plan to renovate, rather than demolish and rebuild, PHS’s existing theatre.  Their time-consuming, competitive research provided local case-study evidence inferring that the proposed Alan Harvey Theatre project was projected to be excessively costly yet yield a facility with inferior amenities compared to the recent construction costs and designs of other Bay Area high school theaters.

Hope Salzer, Piedmont Resident

Oct 20 2018

In Rick’s [Raushenbush] Piedmont Civic Association Oct 17, 2018 article he makes the following statements that I challenge or refute below. I copied and pasted his comments and have my own numbering. See his original opinion article for additional context.

    1. First, the District and the School Board clearly understood the difference between Current Interest Bonds (CIBs) and Capital Appreciation Bonds (CABs), as well as Qualified School Construction Bonds (QSCBs) and Bond Anticipation Notes (BANs). These financing mechanisms, their pros and cons, were discussed in public meetings back to 2006.

Very roughly speaking, CIBs reduce total interest payments by levying taxes at a higher rate to pay down the debt starting immediately, while CABs reduce the immediate tax rate at the cost of greater total interest payments by deferring repayment of the debt. — Rick Raushenbush 2018

  1. Pursuant to statute, anticipated tax rates to repay bonds issued under Measure E were limited to $60 per $100,000 in assessed value. The District could not have sold CIBs to fund this work as the tax rate to repay the bonds would have exceeded the limit.
  2. I do not recall anyone, including current School Board candidates, appearing before the School Board at the time to argue that Wildwood and Beach work should be deferred for years to reduce total interest payments.
  3. Third, refinancing bonds to save money is not a new concept. Even before the CABs were sold, the Board and District anticipated re-financing them as soon as it was possible to do so (call dates were set as soon as feasible given market requirements)
  4. Fourth, the School Board, well aware that CABs keep current tax rates lower only by increasing total interest payments, has chosen CIBs over CABs when available. In 2014, when proposing a bond measure to fix Alan Harvey Theater, the Board ruled out using CABs as the feasible tax rate supported the CIB option. No one on the Board was advocating CABs.
  5. According to Minutes of the Nov. 8, 2017 meeting, however, “Hari Titan encouraged the Board to wait for at least a year on CAB refinancing.”

Rick Raushenbush never contacted me about his beliefs but my responses are below.

Hari Titan’s Responses

  1. Rick did not produce any links to public discussions back in 2006. Although technically these discussions are open to the public most of the public is unaware of what they are about. His 2018 “roughly speaking” description is to this day overly simplified and misses key financial concepts, the absence of which mislead the public regarding the negative side of CABs. For example Rick does not mention any of the following: compound interest, negative amortization, balloon payments, above market interest rates, increasing debt, non-productive debt. I have been educating the public about these aspects which led to the vast majority of the public not wanting CABs.
  2. In the October 11, 2017 meeting to refinance the 2013 CAB at H:M:S 1:35:16 – onwards, it is revealed that as long as there are savings to the public from a refinance, the new refinance can go over the prior $60/$100k AV limits. This was new information from district bond counsel that was not discussed (and likely not known) at the May 8, 2013 board meeting prior to issuing the 2013 CAB.
  3. My proposal was not to defer the work and financing in 2013 but to use CIBs by getting a new voter authorization, see my article here. In the May 2013 board meeting, KNN Public Finance confirms that a new voter authorization would provide a new $60/$100k AV limit, see:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=916 Minute 1:06
  4. Maintaining the no-refinance clause to 10-years per market demands for CABs is not the same thing as planning to do a refinance of the CABs. There is no record of board members actually stating their wish for refinancing the upcoming August 2013 CAB in their May 2013 board meeting:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=916 Check Minutes 0:44 – 1:07 . In fact, we did the 2017 refinance of the 2013 CAB before the 10-year no-refinance clause expired. Board members at the time did not balk at or comment on the high repayment multipliers from 4:1 to 5.6:1 and only CABs were on the table at that time.
  5. Measure H had CABs as Option 1 even though there was no existing $60/$100k AV limitation. The board voluntarily put CABs on the table and then removed it in favor of CIBs. It shows that the board was not just putting CABs on the table because they thought they were forced to by Prop 39 but instead that they were relying on what I would say is a faulty presentation of present value arguments that don’t apply to taxpayers but apply to bond investors. Andrea Swenson invited KNN Public Finance and another community member to do the advocating for CABs. I was the only community member to oppose CABs at this meeting and a few earlier meetings. Here is the video to follow along with the proponents of CABs:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=1042 see Minutes 2:00 – 2:41
  6. The minutes of the meeting ignores that I changed my opinion in that meeting based on new information from KNN Public Finance. Here is a link to the actual video of the meeting: http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=1688 Initially at minute 54 second 47 I say: “Even if the Fed dot plot is correct and the interest rates will go up 75 basis points next year, it may be well worth just waiting to see if that is really going to happen. We have a new Fed chairman who has made verbal statements to not increase rates…. we could wait and monitor interest rates.” However at minute 1:25, based on the new information provided by KNN I switch my recommendation to: “I’m with Cory given this new information… maybe the best thing for the community is to take action now and go with Option B… I would give a thumbs up if the board took action now.”

In summary, the Board in 2013 missed 2 approaches to avoiding the 2013 CAB. One approach was to get a new voter authorization and another approach was to consult with bond counsel and find out if a new voter authorization was even required.

Furthermore and consistent with the above video evidence, KNN Public Finance told me that they were not asked to run numbers for a CIB option in 2013 because the board was not interested in CIBs at that time.

The actual moment the $18.8 million was lost was at 1 hour and 6 minutes into the May 8, 2013 board meeting when KNN points out (in response to Tolles) that a new voter authorization would grant a new $60/$100k AV limitation. Nobody on the board asked if such a new voter authorization would allow CIBs back on the to table and what those savings would be.

Hari Titan, Candidate for Piedmont School Board

Oct 17 2018

Hari Titan is running again this year for a school board seat. I admire his tenacity and his continued interest in the issues with the schools. But Hari is making claims on fliers he is distributing that are overblown and saying things about me that are patently not true.

He claims he “spearheaded” the transition to extended day kindergarten, “lobbied” for supplemental STEM curriculum, “exposed” interest penalties on CAB bonds and “saved” the citizens millions in interest payments. To claim each of these as accomplishments is to argue that having an opinion gets things done. The truth is we’ve had teachers clamoring for extended day kindergarten for years, students, parents and teachers all want more STEM emphasis and the board has been closely monitoring the structure of our bond portfolio. So while these initiatives are being implemented, his influence has been minimal.

Hari has indicated that I profited from the issuance of the District’s CABS for my personal investment portfolio and am somehow conflicted by the decisions we’ve undertaken regarding them. That is simply not true. To me, distributing this information is beneath the standard held by our community and should disqualify any candidate stooping to such a tactic.

While the self-proclaimed “citizen watchdog” has been lobing criticism and claiming influence, he has not exhibited the true community leadership required of a school board position. I encourage you to go elsewhere with your votes.

Doug Ireland, Member of the Piedmont School Board

Editors Note: Opinions expressed are those of the author.
Oct 17 2018

The ongoing School Board election campaign has resulted in misrepresentations about the District’s sale of Capital Appreciation Bonds during the seismic bond program, and the refinancing of those bonds.

I served on the School Board during the seismic program, but anyone can review the meeting agendas and materials to understand the facts. A good place to start is the 2014 Seismic Safety Bond Program Financial Summary, http://www.piedmont.k12.ca.us/bond/SSBP_Finance_Summary.pdf. Below are some relevant facts:

First, the District and the School Board clearly understood the difference between Current Interest Bonds (CIBs) and Capital Appreciation Bonds (CABs), as well as Qualified School Construction Bonds (QSCBs) and Bond Anticipation Notes (BANs). These financing mechanisms, their pros and cons, were discussed in public meetings back to 2006. Very roughly speaking, CIBs reduce total interest payments by levying taxes at a higher rate to pay down the debt starting immediately, while CABs reduce the immediate tax rate at the cost of greater total interest payments by deferring repayment of the debt. Board carefully considered which options were feasible and prudent under the circumstances, and made financing decisions following public discussion.

Second, the Board authorized the sale of CABs (Series E) to allow seismic renovation work at Wildwood and Beach Schools to proceed, rather than defer such work for years until older bonds were paid off, which would have left our children in seismically unsound buildings, increased construction costs, and lost access to the “replacement school” in Emeryville. (If you want more detail, the CABs were sold to repay the BANs that were sold to allow the District to obtain QSCBs—see SSBP Financial Summary. QSCBs were near-zero interest bonds that must be repaid in 15 years and saved the District about $40 million, http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/QSCB_012511_presentation.pdf ). Pursuant to statute, anticipated tax rates to repay bonds issued under Measure E were limited to $60 per $100,000 in assessed value. The District could not have sold CIBs to fund this work as the tax rate to repay the bonds would have exceeded the limit. Selling CABs deferred the repayment, and the taxes to make repayment, until other bonds were paid down and thus complied with the limit. See, e.g.,

http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2011_12/050813packet.pdf at pp 2-3.

I do not recall anyone, including current School Board candidates, appearing before the School Board at the time to argue that Wildwood and Beach work should be deferred for years to reduce total interest payments. Wildwood and Beach parents vocally supported proceeding with the work.

Third, refinancing bonds to save money is not a new concept. Even before the CABs were sold, the Board and District anticipated re-financing them as soon as it was possible to do so (call dates were set as soon as feasible given market requirements). See May 8, 2013 Minutes at 3-4, http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2011_12/050813minutes.pdf. The District and Board had a history of refinancing older bonds when interest rates come down, and had done so in 2009 and 2014. See http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2014_15/10-22-14_Packet.pdf. The Board refinanced Series B CABs in 2015. http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2-11-15_Agenda.pdf.

In Fall 2017, the Board and District identified options for refunding the 2013 Series E CABs and held two public meetings to obtain input.

http://www.piedmont.k12.ca.us/wp-content/uploads/2017/10/2017-CAB-Refunding-Options-Summary.pdf

http://www.piedmont.k12.ca.us/wp-content/uploads/2017/11/Background-Refunding-of-Outstanding-CABs-or-NOT.pdf

http://www.piedmont.k12.ca.us/blog/2017/12/15/district-saves-taxpayers-more-than-26-1-million-with-bond-refinancing/

The Board elected to refinance the 2013 CABs with CIBs, saving Piedmont taxpayers $26.1 million.

http://www.piedmont.k12.ca.us/blog/2017/12/15/district-saves-taxpayers-more-than-26-1-million- with-bond-refinancing/. According to Minutes of the Nov. 8, 2017 meeting, however, “Hari Titan encouraged the Board to wait for at least a year on CAB refinancing.” https://agendaonline.net/public/Meeting.aspx?AgencyID=1241&MeetingID=12755&AgencyTypeID=1&I sArchived=True. Fortunately, the Board correctly chose to proceed with the refinancing in December 2017 as interest rates have continued to climb.

Fourth, the School Board, well aware that CABs keep current tax rates lower only by increasing total interest payments, has chosen CIBs over CABs when available. In 2014, when proposing a bond measure to fix Alan Harvey Theater, the Board ruled out using CABs as the feasible tax rate supported the CIB option. No one on the Board was advocating CABs. See January 8, 2014 Minutes at 7-9, http://www.piedmont.k12.ca.us/aboutpusd/agenda.minutes/2012_13/1-8-14_approved_minutes.pdf.

In short, claims about misuse of CABs in the past do not reflect the facts. This School Board election should focus on solving real challenges to maintaining Piedmont’s high quality educational system.

Rick Raushenbush, Former Piedmont School Board Member