Bonds are Like Manure: We Still Owe $1.4 Billion in Bond Debt (Part 2) 

(See Part 1)

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What Are Bonds?

Pure and simple, bonds are loans that government entities (like cities and school districts) take out that taxpayers pay via their property taxes. These loans are usually needed because the entity would like to have new construction or remodel old infrastructure. Once the bonds have been approved by voters, residents pay for these bonds (with added interest) for decades to come.

Think of bonds as second mortgages or home lines of credit. Bonds will continue to be a monkey on the residents’ backs years way after the money borrowed has been spent. For example, take a look at a school district in San Diego that is paying $1 billion in interest for $100  million in borrowing:

Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools

Closer to home, here is one example of the bonds currently being paid by homeowners in Chula Vista. If you own a home, you will see it in your property tax bill. If you rent a home, you will be paying for it via your rent payment.

Property Taxes

As can be seen, the bonds are from some of the very same entities that are coming around now with their hand extended begging for more: SUHSD and SWC. Note that these taxes are in addition to the regular property taxes paid to the County as well as any Mello Roos that the resident may still owe on their property.

These are the current bonds listed on the property tax roll:

Bond Name       Year          Approved Amount*      Entity

Prop AA             2000          $89M                                    SWC

Original Proposal:

Prop BB             2000           $187M                                SUHSD

Original Proposal:

Prop JJ              1998             $95M                                 CVESD

Prop O             2006            $644M                                SUHSD

Original Proposal:

Prop R            2008             $389M                                 SWC

Original Proposal:

Total: $1.4 Billion

(this does not include interest and it is still being paid by residents)

*Some observations of these numbers:

  • There is, still, a total of over $1.4 billion of debt that is still owed
  • CVESD borrowed $95 million in 1998 (the smallest amount), in 2016, we’re still paying that debt and in 2012, they passed another $90 M bond (Proposition E)
  • SWC and SUHSD each borrowed over half a billion dollars

This series will explore some of the issues and pitfalls that come with issuing bonds:

Part 3: Fool Me Once, Fool Me Twice (coming)

Part 4: Used Car Sales Tactics (coming)

Part 5: Options (coming)

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4 Responses to Bonds are Like Manure: We Still Owe $1.4 Billion in Bond Debt (Part 2) 

  1. Pingback: Bonds are Like Manure: The Flood Gates are Opening (Part 1) | Focus on Chula Vista

  2. David Danciu says:

    I am not completely against bonds. That being said, it is a travesty that SWC spent the last bond on a new stadium, 3 swimming pools and a workout facility. Don’t forget the corruption that led to a redesign of the entire corner lot plan. The SUHSD and CVESD have hardly been better so my conclusion is that the schools should not receive another dime until adequately demonstrating competence in this area.

  3. RussH. says:

    Well Dave the question next should be simply this: when is “enough ever enough”? The tax and spenders seem to never ever have enough. And in most cases can’t account for what they spend dime for dime and are oblivious to debt being piled on and passed on to the next generation. They have no shame only greed. Because our communities have been so poorly planned in general, we seem to never to be able to pay for our own way during our time in office. So we pass on millions and trillions of debt to the young folks.

    You see, the immense failure of Chula Vista western suburban renewal has now caught up with us. There is no economic growth to sustain the huge housing developments. Wouldn’t it be refreshing to see the city tax and spenders finally come to grips with the reality that CV needs an aggressive and consistent economic growth plan before they pick the pockets of the taxpayers who foot the bill for everything in this town eventually. Economic growth fills the city treasury. A novel concept to some—I get it. It can be done and should be done long before another dime is requested from the taxpayers.

    The well is dry and it is high time to get over that fact. The cost of living in this community and state is beyond outrageous thanks to fuzzy headed tax and spend politicians and their enabling executive level civil servants to have long forgotten ethics and loyalty to the very taxpayers that make possible their six figure salaries, gold plate benefits and lucrative CalPERS retirements.

  4. Jaime. O says:

    I stumbled across this article browsing on the internet and I’m happy i did. Being a small time business owner. i was looking into bonds. i guess that’s how i came across this blog. But this has really allowed me to second guess where i should put my money. Thank you for this very informative article. Being a Chula Vista Native. good to know whats going on in my city.

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