Letters to the Editor: Voters need full disclosure on Measure LCF

Several of us friends have discussed just how little we know about Measure LCF on the Nov. 7 ballot. We fully support our schools and local community. It is our sincere hope that La Cañada voters can gain some insight from the following points to arrive at an informed decision.

1. These bonds essentially represent local government borrowing, with draws and payments to cover decades — perhaps in excess of 40 years. This will result in an obligation by city property owners, via their property taxes. Bear in mind that local residential property taxes cover approximately 40% of district funding needs.

2. For example, a new La Cañada home buyer, who might expect to reside in our great city for those 40 years, can expect to pay this “no new taxes” of $60 per $100,000 assessed value during that entire span. On a $2-million dollar property, this will cost this example homeowner $1,200 annually and close to $50,000 over 40 years. For all practical purposes, this is a permanent tax. This example is real, because bond repayment relies on a $2-million average assessed value over 40 years (approximately 6,000 properties times $50,000 equals $300 million; or $268 million new debt service plus $22 million existing principal not including interest).

3. Existing LCUSD bond principal debt total over $22 million as of the most recent unaudited district financial statements ending June 30, 2017. As far as we can tell, these bonds carry maturities beyond 2027. According to legal rules, Measure LCF bond proceeds cannot legally be used to pay off this $22-million liability. Current bond repayment reserves of less than $5 million (as required by law) are inadequate to pay this off.

4. The LCUSD bond liability extends as far back as 1995. All things constant, the property tax rate would drop by $30 per $100,000 in ’21 and another $30 per by ’29. Bond interest expense currently exceeds $1 million per year. Most of the interest burden comes from voter-approved bond measures (latest in ’04) and corresponding issuances to market (latest in ’12). Individuals can determine this through a little research of the district website audited and unaudited financial statements and data available for public bonds online.

5. The Jet Propulsion Laboratory is exempt from La Cañada property taxes, yet the children of its employees may enroll in LCUSD schools. Children residing outside of district boundaries account for over 15% of district enrollment. This enrollment includes children of business owners (who pay property taxes) within the city, as well as children (residing outside the city) of district school teachers and JPL employees who do not pay city property taxes.

6. The ballot measure’s line about eligibility for state matching funds is somewhat misleading. There’s valid reason for this: Nobody knows if we will get one penny of matching funds, due principally to Sacramento red tape making it difficult to qualify.

7. Our evaluation of published LCUSD financial statements shows well-managed operations. The looming cloud within the district is the same as any other school district: teacher pension liabilities. We believe this growing $33-million liability will increasingly consume resources, outstripping customary revenue sources. Further, it is our opinion that the district will shift millions of maintenance costs to fall within bond funding, thereby freeing up funds to satisfy this growing pension burden.

8. We still do not know what portion of the revealed $119-million lifetime bond servicing costs comprises interest, legal, and issuance fees. It is our desire that the district disclose these amounts.

Fred Crane

Ward Christensen

Ric Rivett

All of La Cañada Flintridge