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LWV League of Women Voters of California Education Fund
Smart Voter
San Francisco County, CA November 7, 2006 Election
Proposition A
School Bonds
City of San Francisco

55% Majority Approval Required

Pass: 171,236 / 73.85% Yes votes ...... 60,640 / 26.15% No votes

See Also: Index of all Measures

Information shown below: Summary | Fiscal Impact | Yes/No Meaning | Arguments | Full Text

Shall the San Francisco Unified School District modernize and repair up to 64 additional school facilities to health, safety, instructional and accessibility standards, and where applicable, replace portable trailers with permanent classrooms; upgrade bathrooms, science labs, plumbing, electrical and other building systems; replace heating and ventilation systems; and renovate classrooms, with proceeds from the issuance of up to $450,000,000 in bonds, at legal interest rates, with guaranteed annual audits, and citizens' oversight to monitor expenditures?

Summary Prepared by The Ballot Simplification Committee:
THE WAY IT IS NOW: The San Francisco Unified School District maintains over 160 buildings. The District builds, maintains and upgrades its schools using money from various sources, primarily from voter-approved bond measures, but also from local parcel taxes and developer fees. The District is also eligible to receive additional funds from the State to build or upgrade its schools if, among other requirements, the District provides money for these projects. In 2003, the voters approved a $295 million bond measure to modernize 30 schools and to set aside $15 million for a proposed building for the School of the Arts.

THE PROPOSAL: Proposition A would authorize the District to borrow up to $450 million by issuing general obligation bonds. The money would be used to modernize 64 additional School District facilities not included in the 2003 bond proposition by:

  • improving health and safety standards, including installing fire sprinkler systems, repairing elevators and replacing drinking fountains;

  • making building repairs such as fixing bathrooms and repairing or replacing electrical and plumbing systems;

  • improving accessibility for students with disabilities by installing ramps, signs, assistive listening devices and making other needed repairs and replacements;

  • performing needed environmental improvements, including removing materials containing asbestos;

  • repairing portable trailers or replacing portable trailers with permanent classrooms; and

  • creating outdoor areas for hands-on environmental learning.

Of the $450 million, the District would set aside $15 million for a proposed building for the School of the Arts. In addition, $2 million would be set aside for planning and analyzing for further building modernization and disability access. The District would not start some parts of these projects unless it receives additional funds from the State. Proposition A would require the District to create a Citizens' Oversight Committee to review and report to the public on whether funds are being spent only for those projects included in this bond. State law requires an annual audit. Principal and interest on general obligation bonds are paid from property tax revenues. Proposition A would require an increase in the property tax. A 55 percent majority is required to approve school bonds.

A "YES" VOTE MEANS: If you vote "yes," you want the District to issue $450 million in general obligation bonds to modernize 64 School District facilities.

A "NO" VOTE MEANS: If you vote "no," you do not want the District to issue these bonds.

Fiscal Impact from City Controller:
City Controller Edward Harrington has issued the following statement on the fiscal impact of Proposition A:

Based on the best estimates of the School District, should the proposed $450 million in bonds be authorized and sold, the approximate costs will be as follows:

  • In fiscal year 2007-2008, following issuance of the first series of bonds, and the year with the lowest tax rate, the estimated annual costs of debt service would be $4.36 million and result in a property tax rate of $0.00402 per $100 ($4.02 per $100,000) of assessed valuation.

  • In fiscal year 2010-2011, following issuance of the last series of bonds, and the year with the highest tax rate, the estimated annual costs of debt service would be $40.5 million and result in a property tax rate of $0.03276 per $100 ($32.76 per $100,000) of assessed valuation.

  • The best estimate of the average tax rate from fiscal year 2007-2008 through 2029-2030 is $0.02226 per $100 ($22.26 per $100,000) of assessed valuation.

  • Based on these estimates, the highest estimated increase in annual property taxes for the owner of a home with an assessed value of $400,000 would be approximately $128.75

These estimates are based on projections only, which are not binding upon the City or the School District. Such projections and estimates may vary due to variations in timing of bond sales, the amount of bonds sold at each bond sale, and actual assessed valuation over the term of repayment of the bonds. Hence, the actual tax rate and the years in which such rates are applicable may vary from those estimated above.

The Board of Supervisors is considering amending San Francisco's residential Rent Control Ordinance to allow landlords to have tenants pay for half of the increased property tax cost from these bonds.

Meaning of Voting Yes/No
A YES vote on this measure means:
A "YES" VOTE MEANS: If you vote "yes," you want the District to issue $450 million in general obligation bonds to modernize 64 School District facilities.

A NO vote on this measure means:
A "NO" VOTE MEANS: If you vote "no," you do not want the District to issue these bonds.

 
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Arguments For Proposition A Arguments Against Proposition A
We can all agree that our public schools are in great need of additional funding to provide quality facilities and resources our kids need to be successful. Our schools serve nearly 60,000 students and their teachers in some of the oldest buildings in the State. Many of these buildings desperately need to be modernized to 21st century code and accessibility standards.

In 2003, San Franciscans recognized that our schools were in need of repairs and upgrades and overwhelmingly voted to support the first bond necessary to begin work in 30 designated schools.

The bond program is being rigorously run by a professional management team and, since its development, construction has stayed on schedule and on budget. The District has kept its promise to manage the 2003 bond monies appropriately under the guidance of the independent Citizen's Bond Oversight Committee, and the annual audit found that we have met all requirements and are in excellent financial standing.

Voting YES on Prop A will provide the funding necessary to modernize, upgrade, and increase accessibility at an additional 64 school facilities. These 64 school facilities were not included in the 2003 bond.

As with the last bond, we are required by law to provide independently conducted performance and financial audits. The District will continue to keep its commitment by appointing a Citizen's Bond Oversight Committee to review and report on the bond's work.

This is a critical step for us as a community to ensure that ALL our children have safe, healthy, attractive, and universally accessible environments to learn and thrive.

Please join us in supporting Proposition A.

San Francisco Board of Education

Rebuttal to Arguments For
BONDS ARE AN EXPENSIVE WAY TO PAY FOR SCHOOL IMPROVEMENTS

Bond finance costs, securities commissions, transfer agent charges, and bond counsel bills may well make the total fees for these $450 million dollars in bonds reach close to $800 million dollars. That is expensive.

The San Francisco Unified School District (SFUSD) would be better advised to finance these school improvements out of tax money on a "pay-as-you-go" basis. Vote "NO!" We don't need this.

Currently, the City and County of San Francisco + including the SFUSD + owes more money than a number of nations in Europe, Asia, and Latin America. Vote AGAINST this unwise and costly ballot measure.

Dr. Terence Faulkner, J.D. Chairman of Citizens Against Tax Waste

Roger E. Schulke, Candidate for Board of Education School Bonds

BONDS ARE A WASTEFUL WAY TO PAY FOR ROUTINE RECONSTRUCTION AND REPAIR COSTS: These $450,000,000 in school bonds will + with interest costs and other charges + eventually cause San Francisco voters and taxpayers to pay out between $800,000,000 to $900,000,000.

The routine repair and reconstruction expenses of the San Francisco Unified School District (SFUSD) should be covered by taxes on a "pay-as-you-go" basis. This way, taxpayers would get $1 worth of repairs for each $1 spent.

BONDS + LIKE CREDIT CARDS + SHORTCHANGE TAXPAYERS:

With bonds, taxpayers get 50 or 55 for each $1 spent.

Bonds are a bad deal for the SFUSD.

WHAT ARE THE REAL COSTS OF BONDS?

When school bonds are issued by the SFUSD, a lot of extra expenses arise.

The interest charges on the school bonds are a massive part of of the money lost by taxpayers + but there are many other costs as well:

  • Sales Commissions + The securities dealers are paid commissions when they sell the bonds.

  • Attorney's Fees + One or more lawyers are paid to give legal opinions on these bonds.

  • Bond Exchange Fees + Those exchanges permitting the bonds to be traded are paid for their services.

  • Transfer Agent Fees + A transfer agent's firm will be paid to keep a record those buying and/or selling these bonds, also issuing bond interest dividends.

VOTE AGAINST THESE BONDS:

These SFUSD bonds are a bad deal. Dr. Terence Faulkner, J.D., President Citizens For Election Law Reform

Rebuttal to Arguments Against
Our schools do not have enough resources and our children are suffering the consequences. Prop A will address the needs of our students by modernizing 64 additional school facilities in San Francisco.

This is an investment in our future. The cost of construction rises every year. The longer we wait, the more expensive these modernizations become. We cannot allow our schools to age and deteriorate any more.

Prop A will allow us to leverage our resources by making the school district eligible for approximately $30 million dollars in additional State funding.

The bond program is a righteously managed and tightly overseen program that follows all the strict requirements of State law. All dollars raised will go exclusively to the 64 projects outlined in this ballot book. The work performed at each school site will include major health, safety, and building system improvements-- this means new bathrooms, new classrooms, new floors, and new gardens for our children. Prop A will replace plumbing, heating, and ventilation systems, remove hazardous materials like lead and asbestos, and make sure that every facility is accessible to the disabled.

San Francisco's children deserve to feel safe, healthy, and valued when they go to school.

It is good business sense to fix these schools now. It is a good deal for our students and a good deal for San Francisco.

Together, we can make this happen.

Vote Yes on A.

San Francisco Board of Education Coleman Advocates for Children and Youth San Francisco Chamber of Commerce

Full Text of Proposition A
This full text of the ballot proposition shall be reproduced in any official document required to contain the full statement of the bond proposition.

The specific school facilities projects that the San Francisco Unified School District proposes to finance with proceeds of bonds authorized by this proposition (the "Bond Project List") are listed in the following pages, which is an integral part of the proposition. All 64 projects are in addition to and mutally exclusive of the 32 projects included in the Prop A 2003 Bond. The Bond Project List was developed by the Board upon evaluation of, among other factors, safety, class size reduction, and information technology needs. Each listed project may include a share of election and bond issuance costs, program phasing and analysis, architectural, engineering, and similar planning costs, construction management, relocation costs, legal costs and other costs ordinarily chargeable to capital accounts or otherwise permitted by law, the costs of furnishing and equipping the listed projects, and a customary contingency for unforeseen site acquisition, design, construction and other costs. No bond money will be used for teacher or administrator salaries or any other school operating expenses. The District at its discretion may replace a facility rather than renovate it.

Approval of this proposition does not guarantee that the proposed projects in the San Francisco Unified School District that are the subject of bonds under the proposition will be funded beyond the local revenues generated by the proposition. The San Francisco Unified School District's proposal for the project or projects may assume the receipt of matching State funds, which could be subject to appropriation by the Legislature or approval of a statewide bond measure. The Board does not guarantee that the bonds will provide sufficient funds to allow completion of all listed projects.

The Bond Project List describes work that the San Francisco Unified School District may undertake, provided funds are sufficient to complete the work contemplated. The final cost of each project will be determined as plans are finalized, construction bids are awarded, and projects are completed. San Francisco Unified School District commits that no funds obtained through bonds authorized by this measure will be spent except for projects listed on the Bond Project List.

If the bonds are authorized and sold, the bonds will be payable from the proceeds of tax levies made upon the taxable property in the District. Landlords are authorized to pass through up to fifty percent (50%) of the resulting property tax increase to residential tenants in accordance with Administrative Code Chapter 37 (Residential Rent Stabilization and Arbitration Ordinance) of the City and County of San Francisco.

Any Bonds issued pursuant to Section 15264 of the Education Code shall have a maturity not exceeding twenty-five (25) years, and any Bonds issued pursuant to Section 53506 of the Government Code shall have a maturity of not exceeding forty (40) years, and the Bonds shall bear interest at a rate not exceeding the applicable legal limits.

Pursuant to Section 53410 of the Government Code, upon approval of this proposition and the sale of any bonds approved, the Board shall take actions necessary to establish an account in which proceeds of the sale of bonds will be deposited. The chief fiscal officer of the San Francisco Unified School District shall cause a report to be filed no later than January 1 of each year in which any proceeds of the Bonds remain unexpended, and any year in which proceeds were expended in the previous year stating 1) the amount of bond proceeds collected and expended in the preceding year and 2) the status of any project funded or to be funded from bond proceeds. The report may relate to the calendar year, fiscal year or other appropriate period as the chief fiscal officer shall determine and may be incorporated in the annual budget, any annual financial or performance audit (including the annual audits required by Proposition 39), or any other appropriate routine report to the Board.

All expenditures by the San Francisco Unified School District of funds obtained through bonds authorized by this proposition shall be subject to the review and oversight of a Citizens' Oversight Committee, which shall actively review and report on the proper expenditure of bond proceeds for the projects on the Bond Project List.

The Citizens' Oversight Committee shall review annual, independent performance and financial audits of bond fund expenditures and report to the public at least once a year on the results of its activities. The Citizens' Oversight Committee will have the responsibility to report to the public if any bond funds are being spent in violation of Proposition 39 or in a manner inconsistent with the Bond Project List.

See the following page for the BOND PROJECT LIST +http://www.sfgov.org/site/uploadedfiles/election/Elections_Pages/ExB450Million2006final2Adopted.pdf


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