May 13, 2008

School bond in spotlight

Proponents, critics debate $378 million Measure A

By Kristina Peterson / Daily News Staff Writer

The Palo Alto school district's proposed $378 million bond measure is either the cheapest tool available for fixing and improving the city's aging schools or a ticket to monstrous debt for superfluous projects such as a new swimming pool.

Measure A on the June 3 ballot was portrayed both ways Monday during a debate featuring former school board member and bond supporter Mandy Lowell versus former software engineer and opponent Wayne Martin at the Palo Alto Rotary Club.

If approved by 55 percent of voters, the bond will raise $378 million to improve facilities at all 17 district schools, create more room for the district's rising enrollment and replenish the schools' aging technology.

Palo Alto homeowners would pay $44.50 for every $100,000 of assessed property value - the current tax rate from the previous bond - for 20 additional years.

Funding the $378 million bond measure would entail paying off roughly $325 million in interest, depending on interest rates when the bonds are sold, said Bob Golton, the district's co-chief business official. Opponents argue that up to $375 million in interest could double the bond's size, while supporters note interest is simply a necessary component of loans.

"How many of you purchased your homes with your ongoing finances?" Lowell asked the crowd Monday. "And how many of you purchased your homes with a mortgage?"

With limited funds, the district must borrow money to pay for facility improvements, and it has selected "the cheapest form of debt service - a bond," Lowell said.

"This is just the reality of how capital facilities get improved," she said.

Referring to Measure A as an $800 million bond, Martin said its financing will create "a monstrous amount of interest."

Martin also asserted that both the school district and school board "really don't understand how the bond will be paid off."

Board President Dana Tom later rebutted that statement.

Citing several detailed study sessions, Tom said the board is well-versed in the bond's mechanics and that Martin's inclusion of the interest is "distorting the reality of the situation.

"You wouldn't call a $500,000 loan with interest a $1 million loan," Tom said.

Former Palo Alto City Council member Bern Beecham agreed, arguing that responsible financing always carries interest.

"You finance with any major capital asset you purchase," Beecham said.

Martin also objected to several of the proposed projects listed as eligible for the bond funding, labeling as "superfluous" the construction of a new pool and performing arts building at Gunn High School and a new theater at Palo Alto High School.

"I don't know how to fund everybody's dreams and not go bankrupt," he said, arguing that the projects would only benefit a few students.

One mother in the audience testified to the benefits of both the pool and theater to her children, and Lowell argued that extracurricular facilities enrich education and provide important opportunities for all students.

"Kids, whether they're members of a country club or just live here, ought to be able to learn to swim," she said.



E-mail Kristina Peterson at kpeterson@dailynewsgroup.com.