NCJ on school bonds
Carrie Peyton Dahlberg has described some local school bond issues in a story in this week’s North Coast Journal. While the tone is measured, the meaning is clear.
And, for the misanthropes among us, there’s this near-perfect summary of the problem, courtesy of Northern Humboldt Union High School District board president Mike Pigg:
The quote appears to come in response to Mr. Pigg discovering his own district has $200,000 of bonds scheduled to cost $2 million to repay. In fairness, that’s a small proportion of NoHum’s borrowing. The scandal, I suspect, is that school districts have to offer underwriters these outrageously high interest deals to get them to underwrite the more reasonable parts of the bond deals.
In McKinleyville’s case, the entire $7 million deal in 2011 appears to have been this sort of outrageously high interest deal, leading their scheduled indebtedness to be $70 million plus. And for this, advisors are paid.