Over the next couple of weeks, Beverly Hills voters will learn what our current school board knows about the “Measure E” bonds passed a few years ago.
In short, the bonds were and are a bad deal from a financing standpoint. They are like the dangerous “adjustable rate mortgages” with no interest cap that many took on years ago, enticed by a low interest start rate only to see that rate skyrocket.
The school board that voted for those bonds is gone, except for current school board member Brian Goldberg who voted “no” at the time.
So, Beverly Hills is stuck either stick with a bad deal and really get stuck with a huge bill, or pay it off quicker and save a ton of money. The first choice is what happens if this board does nothing. The second choice requires this board to break the promise made years ago by the board that promoted the bonds in the first place. Those are the two bad choices.
Unfortunately, the second choice runs smack into the promise made by the school board at the time that “your tax rate will not go up.” That board, hurried into this bad decision, failed to do its homework, failed to ask the right questions, listened to the bond promoters with a “too willing” ear, and failed to get proper financing terms. Instead, they signed on to something called a “capital appreciation bond,” which is school-bond-speak for that horrible “adjustable rate mortgage” scenario, coupled with some huge payments down the road. To be honest, The Courier did little investigation on the matter, sensing as we did an emotional push just to appropriate more money. We should have asked tougher questions. We do ask those questions now.
Adding to the dilemma are two basic business and financial factors: (1) today we have all-time low interest rates and (2) construction costs are on the verge of skyrocketing again but this time because of billions of dollars of government projects now launch-ing. We will get squeezed.
Beverly Hills Unified School District has old buildings. Some are in OK shape; others are not. The people of Beverly Hills authorized up to $300 million in new bonds to fix up the buildings and build new ones, but that vote was based on a promise “not to raise the tax rate.”
So now, The Courier has called upon the current school board to give out all the information it has or can obtain to educate everyone else in Beverly Hills about the real choices.
These “choices” are based on substantial, real considerations of financing, bond rates, public debt, decaying physical facilities, timely interest rates, and the certainty of being stuck with a bad deal made by others.
We call upon the Board of Education to share EVERYTHING they know and all the data they have with the people. We call upon the board to hold public meetings, to ask the people, “Well, these are the facts. What would you do?”
We have asked this board for months to share this information. We understand they will now do so.
This is a decision that will be made by the five members of the board, but it is a deci-sion that really belongs to everyone in Beverly Hills who pays property taxes. We need the information so we can give our input all of us.
As vital as the Golden Triangle business district and our multi-starred hotels are, the foundation of Beverly Hills is our public school system. There is a limit to how much money our district can call upon us to pay, but the first duty of this board is to let us truly know and understand what we all face.