There are several very serious problems with the school district borrowing money from the Mello-Roos Funds.
School over-crowding. These funds were intended to be spent on school infrastructure, capital construction, and certain types of ongoing maintenance. Because SUHSD has chosen these funds as a lending source, the incentive to build any new school in the Otay Ranch/Eastlake area is non-existant. At a parent meeting held at ELH several months ago, Rick Knott said the Mello-Roos Funds held approx. $160,000,000.00 (160 million). The cost of a sorely needed new high school would cost $125-$135 million, leaving an approximate balance of $25-35 million. $25-$35 million is just not enough to cover the costs of the day to day needs of SUHSD. The convenience of having a "borrowing pool" of money outweighs the needs of an overcrowed community.
Rick Knott, at that same meeting said that the current Mello-Roos funds were currently being invested and earning approximately 0.5% interest. He also said when the district borrows money from the M-R Funds they pay interest on the money borrowed. The rate of interest is also in the 0.5 to 0.6% rate. However, any delays in construction on the sorely needed high school are raising the total costs of the construction at a % rate far in excess of the 0.5% this money is currently earning. The construction costs of this high school NOW will be significantly lower than any meager interest we would earn on the investment in a financial instution or loan to SUHSD. What this tells us it that there will be MORE money in the M-R Funds five years from now if we move forward on this construction sooner rather than later.
The ready availability of the M-R funds are fueling a sense of monetary largess at SUHSD. Decisions that would have never been made had these funds not been available as a borrowing pool are continuing to be made at an alarming rate, with no thought to the consequences. Does anyone really think SUHSD would have bought all those iPads if M-R funds weren't there to be tapped? I use the iPads only as a single example, there are far too many others to list in my reply. The point is, these iPads were at the expense of not just the M-R monies, but also contributes to the overcrowding at all the schools in the east portion of the district.
Jmbrickley Jan. 31, 2013 @ 11:20 a.m.
Sweetwater's gathering storm
There are several very serious problems with the school district borrowing money from the Mello-Roos Funds.
School over-crowding. These funds were intended to be spent on school infrastructure, capital construction, and certain types of ongoing maintenance. Because SUHSD has chosen these funds as a lending source, the incentive to build any new school in the Otay Ranch/Eastlake area is non-existant. At a parent meeting held at ELH several months ago, Rick Knott said the Mello-Roos Funds held approx. $160,000,000.00 (160 million). The cost of a sorely needed new high school would cost $125-$135 million, leaving an approximate balance of $25-35 million. $25-$35 million is just not enough to cover the costs of the day to day needs of SUHSD. The convenience of having a "borrowing pool" of money outweighs the needs of an overcrowed community.
Rick Knott, at that same meeting said that the current Mello-Roos funds were currently being invested and earning approximately 0.5% interest. He also said when the district borrows money from the M-R Funds they pay interest on the money borrowed. The rate of interest is also in the 0.5 to 0.6% rate. However, any delays in construction on the sorely needed high school are raising the total costs of the construction at a % rate far in excess of the 0.5% this money is currently earning. The construction costs of this high school NOW will be significantly lower than any meager interest we would earn on the investment in a financial instution or loan to SUHSD. What this tells us it that there will be MORE money in the M-R Funds five years from now if we move forward on this construction sooner rather than later.
The ready availability of the M-R funds are fueling a sense of monetary largess at SUHSD. Decisions that would have never been made had these funds not been available as a borrowing pool are continuing to be made at an alarming rate, with no thought to the consequences. Does anyone really think SUHSD would have bought all those iPads if M-R funds weren't there to be tapped? I use the iPads only as a single example, there are far too many others to list in my reply. The point is, these iPads were at the expense of not just the M-R monies, but also contributes to the overcrowding at all the schools in the east portion of the district.