Poway school board discusses mounting debt

POWAY, Calif. - The Poway Unified School District's School Board is continuing to wrestle with how to pay off the mounting debt from a controversial $105 million loan.

The money came from capital appreciation bonds used to build and improve school facilities across the district, and it came with $877 million in interest payments due by 2051. No interest is due until 2031.

Poway Unified's deal has been criticized by some as the poster child of what school districts should not do to finance projects.

Financial advisor Dale Scott told the board the bonds could be repurchased and restructured to offer a "significant savings" to taxpayers in the district.

John Riley, a candidate running for a seat on the district's school board, said the fact that the district is looking at the refinancing deal is both good and bad news.

"The good news is the district is finally stepping up and addressing the facts about this fiscally irresponsible bond and working with the community to arrive at a solution," said Riley.

Riley said the bad news is three fold: "One is they want to raise property taxes, despite the fact that this bond was originally sold to voters that taxes wouldn't go up at all."

Riley also said the board isn't making the process transparent, and finally he said, "It's taking a $1 billion bond and then making it about a $900 million bond, even though we're only borrowing about $105 million."

"They made a drastic mistake that they're now trying to rectify," said PUSD critic Tom Moore, who called the new interest in refinancing a case of "smoke and mirrors" aimed at getting incumbent board members re-elected in November.

Moore claims he's so fed up with the mismanagement of taxpayer money that he's looking to move out of California.

"I think it stinks," said Poway resident Jeryl Miller, who did not vote for the bonds in the first place. "It's done, and we're going to pay for it in the end."

PUSD board members were not expected to make any decisions about the loan restructuring until a later date.

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