In a transaction that makes a pay day loan look frugal, a California School district borrowed $105 million over 40 years by selling "a bond so unusual that the State of Michigan outlawed it years ago". Taxpayers in the Poway school district will be on the hook for $1 billion--10X the amount originally borrowed.
In the bond deal, taxpayers were told that there would be no tax increases for 40 years. In fact, there is no interest or principal due for the first 20 years, which means that all the payments will be due on the back end. On top of that. the bonds are not callable and cannot be paid off early or refinanced.
The "bond costs will go towards new classroom and library computers, state-of-the-art wireless data systems with increased bandwidth, new voice and video alarm systems, green 'recyclable building materials,' and landscaping" as well as "new storm water drainage systems to comply with the Federal Clean Water Act".
Poway has only 34,000 students in its district and school administrator and teacher compensation eats up 85% of its annual budget.
