EDITORIAL: A new spin on school bonds EDITORIAL: A new spin on school bonds (August 11, 2004)

The Sequoia Union High School District has come up with an intriguing way to ask voters for $70 million, without increasing their annual tax burden. But there is a catch.

Instead of seeing their payments fall as scheduled on two prior bond issues passed in 1996 and 2001, the district will ask voters to forgo the decrease until 2014. Using this method, property owners would continue to pay $23.80 per $100,000 of assessed valuation for an additional 10 years, rather than see the payment drop to $19.15 by June 30 of next year and decrease more in subsequent years.

If approved, the bond payout would be extended from 28 to 35 years, and cost the owner of a house assessed at $500,000 an additional $835 over the longer period, or about than $24 a year.

District officials believe this "no rate increase" appeal will help pass the measure that will appear on the November ballot with no competing local tax issues except the reauthorization of Measure A, to continue the county's half cent transportation sales tax.

The decision to put the proposition on the November ballot came after board members learned that delaying the vote for one year would shrink income from the bonds by $15 million. The bond vote will be governed by Proposition 39 rules that allow passage with a 55-percent majority of voters instead of two-thirds and, among other things, require the district to say up front how the money will be used.

Voters will have to decide whether the high schools really need the additional $70 million after receiving $133 million from the prior bond issues. And although some arguments appear as strong as those used to successfully promote the bonds in 1988 and 2001, others are less so. Among the top justification locally for this year's bonds is to finish projects at the two local comprehensive high schools, with $8 million going to Menlo-Atherton to complete its own performing arts center and $6 million to Woodside High to upgrade older facilities. Sequoia High in Redwood City and Carlmont in Belmont each would receive $8 million to finish construction projects, $500,000 would go to the Redwood Continuation School and another $9 million to remodel or rebuild the district's adult school.

In addition, Don Gielow, the former assistant superintendent who now oversees the district's capital improvement program, told the Almanac in July that about $10 million would be set aside to build charter schools, including $6 million for East Palo Alto High, to meet a Proposition 39 obligation stemming from the earlier bond issues.

Other plans do not seem as critical, however. For example, $1.5 million is planned for office and classroom technology; $1 million for energy-efficient vehicles; $4 million for solar cells and $4 million to upgrade roads and utilities. The district would save $5 million in reserves and another $5 million to equalize funding among the campuses, according to Mr. Gielow.

The Sequoia district's high assessed valuation ($40 billion and growing at 3 percent per year, according to a conservative district estimate) is a major factor in enabling the district to pull out $70 million in what is essentially a refinancing scheme that does not raise the tax rate, but simply extends the payout period.

This is a novel way to promote a bond issue, and one that is likely to appeal to a typical homeowner, who would give up a small tax decrease and pay out only an additional $24 a year over the life of the bonds.

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