Local taxpayers must foot a bill for more than $15 million for recent school improvements they did not approve, including $3 million in payments to bond issuers, according to a civil grand jury investigation.
Throughout the last three years, seven San Mateo County school districts have essentially refinanced voter-approved bonds to pay for additional building repairs, a process that generally takes place without public knowledge, according to the report.
The refinancing into new "cash out” bonds allowed the seven districts to spend $15.56 million more than voters approved, although the money will ultimately be supplied by taxpayers, the report said. Of that money, 19 percent, or $2.95 million, was paid back to the bond issuer, leaving $12.6 million for the districts to spend on building improvements, it said.
The districts that took out the extra money include San Mateo-Foster City, Belmont-Redwood Shores, Jefferson Union High and South San Francisco. Voters originally approved $180 million worth of bonds for the seven districts.
The report did not take a position on bond refinancing but rather pushed for more awareness.
“Our position is that the voters ought to know what the heck is going on,” grand jury Foreman Gerald Yafee said.
While not responding specifically to the report, which she had not read yet, Micaela Ochoa, chief business official for the San Mateo-Foster City district, said school districts usually refinance bonds in order to pay them off sooner or reduce the interest rates.
“Most times when districts refund or refinance their bonds, the purpose is to save taxpayers money,” said Micaela Ochoa, San Mateo-Foster City chief business official. “We did [refinance our $79 million bond] and we generated savings to taxpayers. We also generated money for the district.”
Ochoa said her district’s bond, passed in 1997, was originally expected to be paid off by 2032 but refinancing has moved that date to 2023.
By the numbers
County schools “cash out” bonds, 2005-07
Seven: School districts that refinanced bonds
$186 million: Amount of original voter-approved bonds passed
$15.56 million: Extra taxpayer burden from bond refinancing
19 percent: Amount of extra money that went back to bond issuers
Source: San Mateo County civil grand jury