UPDATE: SFSD sends $100 million in interest payments to East Coast Bond Investors

UPDATE: It was fun watching the SFSD Board Meeting in which they quickly glazed over the finances so they could have a 10 minute presentation about marching band (don’t get me wrong, it was a great presentation) I just thought talking about tax payers expenses would have garnered the same attention.

When they did get to the Demographic report where they mentioned almost 50% of students are on Free or Reduced lunches, Board Member Kate Parker said, “We need to talk about that one of these days?” Well since this has been on the climb for almost a decade, when will that ‘magically day’ come Kate? When it hits 70%, 80% or maybe 90%? It always chaps my hide when we are constantly screaming teachers need to get paid more in SD (I agree, they do) but all wages in this state need to rise, so parents of these students can afford to feed their children, rising tides raises all boats.

As I predicted before the school district bond election, we were going to take out bonds which would cost around $100 million in interest payments over 20 years. Those interest payments DON’T go towards education, they DON’T go towards teacher pay, programming, or even building the new facilities. They go towards East Coast bond investors.

This was the fundamental issue with the bonding. We could have bonded less, built the schools we need now AND paid for the future schools through Capital Outlay. We would have still had to pay bond investors, but it would have saved us about $50 million. I will say it again, I am all for public education, I am even NOT against my taxes going up for it. But with all of our growth in SF we can pay for these projects as we need them with the current tax structure. We don’t need to line the pockets of Bond Investors.

50% of Capital Outlay goes towards debt service

This finance report is very telling;

Over half of our current Capital Outlay goes towards debt service. No where in the reports can I find the school district’s current debt (before taking out $300 million in bonds). But my educated guess is somewhere between $100-200 million. This would have been an important side note before we took out even more debt before the election.

Demographics Report of the SFSD

It seems we have a lot of smart people in the District educating our very poor student body;

As you can see, the more students that are enrolled in our elementary system need more assistance.

*What I also find interesting about posting the Monday agenda for the SFSD board meetings is that the final documents and attachments don’t get updated until Sunday. Is it because a school district employee is posting these docs on Sunday? Probably not. There is this little trick with the internets where you can ‘time stamp’ postings. I do it all the time with my blog. In other words I can schedule a post well in advance by using a ‘time stamp’. This tells me the District has this information in advance but chooses to post it only 24 hours before the public can view it. Why do they do that? Well that is a very good question.



10 comments ↓

#1 Matthew Paulson on 10.22.18 at 10:29 am

Debt service is typically principal + interest.

#2 l3wis on 10.22.18 at 10:32 am

I think most people know that, so what’s your point?

#3 Matthew Paulson on 10.22.18 at 1:06 pm

So if debt service is paying principal, it is paying for school buildings, etc.

#4 D@ily Spin on 10.22.18 at 1:37 pm

Interest is the majority of the payment until principle goes down for about half the life of the debt. The school district could have partitioned and saved substantially. However, interest rates are going up and there’s some merit for having financed more.

#5 D@ily Spin on 10.22.18 at 1:42 pm

SFSD won the lottery. After the extravagance will they be bankrupt in 2 years like most lottery winners?

#6 "Beach Week" on 10.22.18 at 4:25 pm

I once knew a guy with a First Premier credit card too, and part of its monthly payment went towards principal as well.

#7 Matthew Paulson on 10.22.18 at 7:39 pm

Yeah, because the 4% rates that are common on municipal bonds are totally the same interest rates that subprime credit card borrowers pay.

#8 D@ily Spin on 10.22.18 at 10:10 pm

Uh, not really. Credit cards are 18%. It’s why they’re in S.D. No usury limit until recently.

#9 Warren Phear on 10.23.18 at 6:58 am

Make no mistake about it matt paulsen. first premier bankcard is oredatory in every regard.

https://www.consumeraffairs.com/credit_cards/premier.html

#10 !! on 10.23.18 at 9:35 am

You mean that 100m no one with the SFSD wanted to talk about before the vote!!!!

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