News

School district expects 'significant' loss

The Menlo Park City School District expects a "significant" loss in its funds that are deposited in the San Mateo County treasury due to the bankruptcy of Lehman Brothers, the investment bank, district Superintendent Ken Ranella said in a statement Monday.

The exact amount, however, has not been determined yet.

County Treasurer Lee Buffington is estimating a total loss of $150 million from the county's $2.7 billion pool as a result of the bankruptcy of Lehman Brothers, Mr. Ranella said. Securities issued by Lehman Brothers represented about 6 percent of the county pool, he said.

The Menlo Park district had about $70 million in the pool, about 2.6 percent of the total, Mr. Ranella said in a written statement.

If the district takes 2.6 percent of the $150 million loss, that would amount to $3.9 million.

"It has been proposed that at the conclusion of the quarter, each pool member's loss will be calculated based on the average daily balance of all members of the pool," Mr. Ranella said.

Although district holdings during the last eight quarters amounted to about 1.5 percent of the pool, that percentage rose substantially this quarter as funds from a bond sale in June were deposited in the county treasury in July, Mr. Ranella said.

All public schools are required to invest "all their working funds" in the county treasury, he said.

Mr. Ranella noted that five days prior to the bankruptcy, the district notified a member of the county treasurer's oversight committee expressing concerns about the concentration of county investments.

"The Board of Education and I are highly focused on this issue," Mr. Ranella said. "Although the Lehman Brothers crisis is beyond our control, we hope to be able to influence the distribution of the loss with the County to limit our impact. Additionally, we will do what we can to ensure that the financial bailout under consideration in Washington, D.C., includes provisions to assist impacted local municipalities, counties and school districts."

Comments

Posted by anon, a resident of Menlo Park: other
on Sep 30, 2008 at 1:45 pm

Ranella and the school board, stocked to the brim with "Masters of Business Administration", demonstrated stunning foresight. Imagine the sheer prescience of providing a letter of concern to the county 5 days before Lehman's collapse. That is truly bold and eerily precocious.

I am, of course, being truly sarcastic.

Only unmitigated hubris would prompt the massive projects undertaken by the school board (even chucking economically prudent alternatives when presented) without considering how the growing credit crisis (in bloom and on full display for at least 2 years) would impact that plan.

This is what happens when there is little to no accountability for large bond issues of public money. I wonder if the bond committee has met all of the required oversight and membership requirements? Does anybody know?

Now we have the unique privilege of voting an unopposed Mark Box onto the school board. Another "Master of Business Administration" who pathetically trumpets an MBA from Harvard (a.k.a. mastery of advanced High School Excel skills) in a community chock-full of Ivy-League, Stanford, and MIT grads.

We need intellectual and principled leadership worthy of this community. Not a gaggle of MBA's who got rich by exploiting talented engineers and other professionals. They are a disaster on Wall Street and will be a disaster for Menlo Park for the same fundamental reasons: minimal integrity, maximal hubris, mediocre intellect (at best).

What have we done to deserve self-aggrandizing blowhards like this? I suppose they are the only ones who don't really have to work for their money. Consequently, they have the time to donate for such activities without ever acquiring the concomitant wisdom that would make their donation worthwhile to the community.


Posted by Alex, a resident of Menlo Park: The Willows
on Sep 30, 2008 at 5:02 pm

When saving to buy a house in this illustrious neighborhood - a coveted neighborhood due to it's top rate schools - everyone would agree to put any savings you plan to spend in the next 5 years (certainly 3) in cash. What kind of idiot would putting the school bond fund money in anything more risky than cash - mutual funds sounds about right. That would be like taking a home equity line of credit and using it to day trade. This is completely unacceptable.


Posted by Mark, a resident of Menlo Park: Linfield Oaks
on Oct 1, 2008 at 9:01 am

I'm not sure what the first posters ax is, but I for one think that in general we are fortunate to have talented people in this district who donate their time and money (we have one of the highest donations to a PUBLIC school via the foundation of any school system in the bay area). If you read Ken's note you would understand that a) they were required by LAW to put the money in the hands of the county treasurer, b) it's the county treasurer's judgement you should direct your anger at. But perhaps you have some other ax to grind and want to vent at this hard working group of people that are putting time in your community. BTW, do you volunteer in the schools, the PTA, the foundation -- or do you just complain from the sidelines? Get on the field and do something ...


Posted by Haricot Vert, a resident of another community
on Oct 1, 2008 at 6:38 pm

Thank you, Mark, for setting the record straight. Accurate and well done.


Posted by account ability?, a resident of Menlo Park: Felton Gables
on Oct 1, 2008 at 9:48 pm

LWV records show that under 5000 of the eligible 18 Thousand district taxpayers approved Measure U. Rushed to the June 06 ballot by the board with few details about the monstrous $91Million bonded indebtedness that district taxpayers would incur, on top of the $33 Million from 1997 that hasn't been paid off yet. About a 25% approval of obligated voters, not the 70% approval trumpeted by Ranella' supporters and the board.
Ranella, the board and their sycophants are masters of deception and demagoguery.

Moreover, about 2000 of those 4955 in favor were absentee ballots, typically seniors who are targeted by pre=election day phone pressure callers, telling them that "it won't cost you a dime if you opt out under the senior citizen exemption". An easy Yes vote.
What's that leave us, maybe 20% of obligated taxpayers approving the measure U.
Prop. 39, passed in 2001, enabled school bond measures to be passed by 55%, instead of 2/3 majority of voters. It also mandated that a bona fide taxpayer organization representative be part of the bond oversight committee. This legally required position has never been filled, and now we find out that not only has the senior citizen position been vacant for many months, but oversight committee chair Mark Box, a 5 year resident of Menlo Park, co-chair of the Yes for Measure U, , resigned Sept. 9 to assume a board position role.
School campus neighbors in Felton Gables, Hillview, Oak Knoll, whose home values and families have been assaulted by "bait and switch" board approved TERC/MPR bldg plans literally in their backyards, are derided as "against the kids".
Time for some long term residents and taxpayers of the district to cry foul and out these "young turks" for their duplicity that's costing us in more than bonded indebtedness, but our very home values under attack to support these self righteous "volunteers".


Posted by lawyer, a resident of another community
on Oct 2, 2008 at 8:13 am

No senior exemption for bonds. The senior voters should know this, absentee or not. Most communities have great difficulty appointing taxpayer org. representative; most often, "taxpayer representatives" like to fire potshots against the bond from the sidelines before an election, but afterward, cannot be bothered to devote the time needed to make sure government works in the people's interests and taxpayers are truly protected.


Posted by lawyer 2, a resident of Menlo Park: other
on Oct 2, 2008 at 9:18 am

Previous poster may be technically correct. But when the annual property tax bill states in bold, "persons over 65 may be eligible for parcel tax exemption", call the school district office, it's easy to understand how the proponents can prey on the seniors' confusion. Most of the seniors with whom we have spoken assumed they could opt out of the bond obligation as well, they are easy "Yes" votes when telephone/media vote grabbers tell them "Sure, you can opt out of paying for the bonds, just like the parcel tax exemption".
Second point, Prop. 39 is the governing law, reducing 2/3 mandate to 55%, but with safeguards that mandate oversight committee makeup, so bond sales, expenditures are not by the "in crowd" heavily influenced by school board members and the self selecting nature of the succession, as we currently see in MP with 2 unopposed MPAEF activists.


Posted by Mark, a resident of Menlo Park: Linfield Oaks
on Oct 2, 2008 at 11:03 am

I find it interesting that the facility projects to upgrade our schools (which need upgrading and lag the investment that other states put into their schools) are somehow "eroding" home values. I've lived here for over 13 years and have enjoyed a dramatic appreciation in home value, largely buoyed by the fact that compared to much of California we have great schools, teachers, families and yes, I'm biased -- school administrators. Like all investments, schools do require continual care to maintain their value. BTW, if you don't like it I'm sure you can sell your home at a wonderful long term capital gain and move to a community that doesn't make these investments. I'm sure you'll have no challenge finding one ...


Posted by Mark, a resident of Menlo Park: Linfield Oaks
on Oct 2, 2008 at 11:08 am

BTW, I did like the comment "see in MP with 2 unopposed MPAEF activists" -- implying that these people somehow were gaming the system. I think it's a democracy, and these were the people that cared enough to invest their time and energy into participating in the local community. If it concerns you enough, get off your seat and run as well.


Posted by Love The Schools, a resident of Menlo Park: Felton Gables
on Oct 2, 2008 at 10:28 pm

I don't know what my neighbor from Felton Gables is spewing? Their home, our home and everyone else that owns a home should be THANKFUL that our schools are invested in, paid attention to, and are foremost on many of our resident's minds. It is absolutely ridiculous to even think that because ball fields, school playgrounds, or school buildings upgraded would hurt ANY single home or neighborhood. What are you smokin' Felton Gables person??? Thanks "Mark" from Linfield Oaks, and please move neighbor from Felton Gables, move to Redwood City, East Palo Alto Mountain View, I hear they have some "great schoools" there!


Posted by MPCSD Parent, a resident of Menlo Park: Menlo Oaks
on Oct 17, 2008 at 11:42 am

As a parent with two children in the school district and one more that will start in a couple of years, I continue to be amazed that there are people who would like see our schools crumble around us and our students be educated in portable buildings. I am extremely proud of our community that voted to pass the bond, and am impressed at Ken Ranella and the school board's ability to push the construction projects forward, so that the money the taxpayers voted to spend is being spent within a reasonable timeframe (look at the Burgess Gym if you'd like a good example on how not to do things). Two other comments:
1) The bond may have been passed w/ only 5000 voting, but whose fault is that? If you don't like it, get out and vote against it.
2) The same goes for the School Board. It is an open election and anyone can run...if you don't like what's going on, then stand up and run yourself.
Lots of kvetching - but I don't see a lot of people putting themselves forward to do anything about.


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