Monday, April 1, 2013

Issuing Bonds Isn't Routine Matter

Read the column here.

Note that, according to whom one is speaking, the terminology concerning a school district’s sales tax levy varies.  The technically correct term is “SPLOST,” just like with a county’s sales tax levy, though the two are (sometimes) governed by different O.C.G.A. sections.  The terms “E-LOST” and “E-SPLOST” are similarly used, but all three means the same thing.

Remember that, legally speaking, school districts cannot levy taxes; they are “requesting” authorities.  The actual imposition of taxes falls to county governments; they are “levying” authorities.  Of course, case law leaves essentially no leeway for county governments not to approve whatever the4or respective school districts request, assuming that the requests are otherwise legal.

Some of my concerns about the CCSD’s SPLOST 4 bonds actually began with questions I had about the SPLOST 3 bonds – questions to which no one seemed to know the answers.  After very long and circuitous investigations through quite a number of local and state bureaucracies (CCSD, Department of Education, Department of Revenue, etc.), I eventually found the answers to a couple of them.  The first listed below, about exceeding the 20 mills limit, is courtesy of the Attorney General’s office.  The second is the result of a conversation I had with a bond attorney over in Atlanta (because the AG’s office clammed up on me):

Seaboard Air-Line Railway Company v. Wright, comptroller-general, et al.
I could not find the text of this decision online, but I am told by the AG’s office that this is the case that exempts bond debt service form any constitution limit on a school district’s millage rate.

O.C.G.A. §48-8-121(c) – Use of proceeds; issuance of general obligation debt:
“General obligation debt issued under this part shall be payable first from the separate account in which are placed the proceeds received by the county or qualified municipalities within the special district issuing such debt from the tax authorized by this part. Such debt, however, shall constitute a pledge of the full faith, credit, and taxing power of the county or qualified municipalities within the special district issuing such debt; and any liability on said debt which is not satisfied from the proceeds of the tax authorized by this part shall be satisfied from the general funds of the county or qualified municipalities within the special district issuing such debt.”

Readers can follow the progress of the SPLOST 4 bond resolution for themselves below (note that the agenda items in January concerned the SPLOST 4 “schedule and plan,” not the bond resolution itself, so I have omitted those meetings):

December 2012 – Board Regular Meeting Agenda (no agenda meeting in December)
See page 88 PDF.  Note that the memorandum had to do with initiating the bond issuance process only, having nothing to do with the bond resolution itself or any other links or background material.

December 2012 – Board Regular Meeting Brief
See page 4 of the PDF.  Concerning the SPLOST 4 bonds under New Business, it notes “The Board approved the authorization to initiate the process to issue bonds for the upcoming SPLOST 4 construction projects.”  That’s it; no other information or links to background material are provided.

December 2012 – Board Regular Meeting Minutes
See page 5 of the PDF.

March 2013 – Board Regular Meeting Agenda (no agenda meeting in March)
See page 1 of the PDR.  Under Superintendent’s Report, all that is mentioned is “SPLOST Bond Resolution.”  No additional or background information or links are provided.

March 2013 – Board Regular Meeting Brief
See page 2 of the PDF.  Note that the paragraph pertaining to the Superintendent’s Report merely says about the SPLOST 4 bonds that “After that, attorney Terrell Benton introduced a presentation on a SPLOST Bond Referendum that will be voted on at a called Mar. 20 Board of Education meeting.”  Note also that no time or place is given for the special called meeting nor are additional or background information or links are provided.

Calendar of Events
Note that the finance committee and full Board meetings on 07 March are clearly indicated, but that the special called meeting on 20 March is notable by its absence.

“This Week in the CCSD”
It is true that the email message forwarded to me by a member of the local new media did contain notice of the Board’s special called meeting in the text of the email message itself.  Note, however, that three is no mention of the special called meeting in the document.  Had one not received the email directly and relied on the attached file, one would not have known of the special called meeting.

For a further critique and timeline of the hurried process used to pass the bond resolution and the stunning lack of public notice, see my first comment following this news article:

I received three responses to my emailed inquiries about how much money would be saved by issuing SPLOST 4 bonds and how such savings could be calculated, which were sent to Board members (as elected officials) on purpose so as to establish that I had concerns about the SPLOST 4 bond issue.  One indicated that the Board member had forwarded my questions to the appropriate CCSD administrative personnel, which was a fair enough response, as I knew that Board had no idea.  The second merely was a “reply all” that sent my questions to all of the other members of the Board, the email addressed of whom I had purposefully included in the address line (not the CC or BCC line) specifically for the purpose of letting the Board Members know that I had sent my questions to all of them.  The third response was to ask me if I had received any other responses.

Finally, I must thank Denise Spangler and Ted Gilbert.  When I asked the former, after the Board meeting on 20 March, where a member of the public could get a copy of the various resolutions just approved, she graciously gave me her copies.  That is the only reason I have them – to my knowledge, they are still not available anywhere else.  The latter, with whom I have had amicable dealings in the past, has indicated that he will try to come up with some numbers for me as to how much money the CCSD ostensibly saved by issuing bonds under both SPLOST 3 and SPOST 4.

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