For Bond Consultants It’s No Pass, No Payday

They have become fixtures at school board meetings across Ventura County, these two financial advisors from San Francisco who specialize in school bond measures.

There they were in Ventura, explaining the results of the poll they commissioned showing city voters would support a bond measure. There they were in Oxnard, suggesting the elementary school district hire a public relations expert before its March bond election. And there they were at another Oxnard meeting, helping high school district trustees decide how to sell the $57 million in bonds that voters approved in November.

Dale Scott and Mitch Templeton can’t afford to let up for they have a definite stake in the outcome of each bond election: If the school districts lose, the two don’t see a penny for their efforts.

That approach is exactly what appeals to some of the local officials who have hired the team.

“The fact that they don’t charge you unless you win means they’ll give you a total investment of time and energy,” said Ventura Unified School Supt. Joseph Spirito. “It’s not like some who will say, ‘Give me $10,000, I’ll do the work,’ and if they don’t win they still get the money and leave.”

The financial advisors work for Dale Scott & Co., a 10-year-old firm based in San Francisco that provides advice for California public agencies trying to finance large capital projects. The six-person outfit focuses primarily on bond measures.

The company’s record is solid. Out of the nine school districts the firm worked with in November, seven passed bond measures, including Oxnard Union High School District’s $57-million measure.

And during the last five years, 25 out of the 35 districts the company worked with won support for the long-term borrowing.

With school districts across Ventura County seeking bond money to make room for increased enrollment and smaller classes--or just to renovate campuses built in the 1950s and 1960s--Templeton and Scott have a firm footing here.

One client, the Oxnard Elementary School District, is going for its own $57-million bond measure in March. Another, the Ventura Elementary School District, is seeking $81 million in bonds in June, while tiny Ocean View Elementary School District is pursuing a more modest $4 million.

The consultants stress that they themselves do not win the campaigns.

“We don’t have any magic bullet,” said Scott, who founded the company. “The fact of the matter is, these campaigns have been won by the hard work of the community. The credit rightly belongs to those in the community.”

The advisors’ work starts before the school district launches its campaign--gauging the community’s support for school spending and advising them how to appeal to voters.

Before the duo agrees to work with a client, they pay an independent pollster to assess the community’s mood. The consultants consider it a good sign when more than two-thirds of the registered voters say they will favor a bond measure, since passage requires more than 66.6% of the “yes” votes.

“If they truly have a need, they owe it to the community to get on the ballot,” Templeton said. “You need to know where the community is on the survey to see if the community has the same perception of the need as the district’s need.”

But a victory is not always secure even if their research seems to indicate a bond measure might win. In past elections, they say, certain factors worked against the school district.

A board split on a contentious issue that takes up all its time and energy, a superintendent who does not enjoy full board support, or instances where a sector of the community begins to campaign against a bond measure can all doom the effort.

Templeton and Scott worked with the Pleasant Valley Elementary School District on its third and fourth attempts at passing a bond measure, both of which failed by a very small margin.

The district lost by less than 1% on its third try, and by nearly 2% the fourth time.

“They were very knowledgeable in what they do and had good ideas and worked really closely with us,” said Howard Hamilton, associate superintendent of the Camarillo-area district. “It’s just that two-thirds vote is difficult. One “no” vote cancels two votes.”

Templeton emphasized that he is not the campaign manager, but he does dispense advice about how to start a citizens committee.

“My role there is once the school passes a [bond] resolution, I’m going to sit down with them and talk about some of the things we have to send out to the community, such as how much it’s going to cost them and what it means for the community so they can make up their minds.”

At the Ocean View district, which is southeast of Oxnard, a survey of registered voters showed there was high support for technology but low support for a child-care center. The company asked board members to consider whether they should ask taxpayers for bond money for the center, a move which could jeopardize the bond measure.

Trustees decided they might end up spending all their time informing voters about this one issue and hurt the rest of the bond, so they dropped that item from their list of needs.

At Oxnard’s elementary district, the board adopted the advisors’ recommendation to hire a public information officer to dispense information about bonds to help relieve the staff’s workload.

In Ventura, the advisors strongly urged school board members not to become involved with any type of political activity that could jeopardize chances for a bond measure. The superintendent’s office decided against taking a stance on a controversial City Council amendment that would have included schools in the city’s master growth plan.

Many of the school officials are novices at working on a bond measure and say they would be lost without some direction.

“He [Templeton] is like a choreographer,” said Jeff Chancer, Ocean View’s assistant superintendent. “He tells us what to do, because if he’s not there, we wouldn’t know how to go about doing this and it’s to their benefit because that’s how they are going to be paid.”

For the financial advisors, the real work--and the money--comes after the voters approve a bond measure.

That’s when they begin putting together much of the paperwork, and trying to find the best underwriters, or brokerage firms, to resell the bonds to the public. Getting the best interest rates saves taxpayers hundreds of thousands of dollars.

Interest earned from the bonds usually offsets the costs for the consultant’s services, but the school districts also set aside part of the bond money to pay legal or financial fees. The costs may come out to be about half a percent of the total bond issue, Scott said.

For Ventura Unified, for example, the schools may be looking at paying $50,000 to $80,000 for every time the firm goes out into the market to sell the bond, which may happen four times, Scott said.

In November, districts such as Ojai may also be pursuing a bond measure. They have already consulted with Dale Scott & Co., who they may decide to hire.

In March, the Hueneme Elementary School District is pursuing a $4.7-million bond and the Fillmore Unified School District is going for a $12-million bond measure. But both have gone with other financial advisors.

“It seems like Dale Scott has Ventura County pretty much wrapped up,” laughed Jeff Baarstad, an associate superintendent at the Hueneme district. “We interviewed them, we thought they had some good ideas and positive people. We just happened to go a different route.”

Even with consultant’s help, the community still needs to do the hard work on its own, said Ken Benefield, campaign leader for the successful high school district bond measure.

A crew of volunteers worked nonstop for four months making 112,000 calls in an attempt to reach every registered voter in the school district.

“It would be very foolish for some district to kick back and think that someone else is going to do their work,” Benefield said. “I think the world of Dale Scott and Mitch Templeton, but they come into an area, they’re strangers, you follow me? And for them as outsiders to do the communicating, it could be effective, but the ultimate responsibility lies in those who are living in the community.”