Two Sides to Every Coin
Local school bond issues have been making the news lately and for good reason.
Jack Durham of the McKinleyville Press has a good write-up
today regarding the approval of $5 million in bonds for Arcata
Mr. Durham writes:
Amid a state-wide controversy over how some school districts are spending too much on bond financing, the local high school district board approved the issuance of $5 million in new bonds last week.
The Northern Humboldt Union High School District Board of Trustees voted unanimously at its Dec. 11 meeting to pursue $5 million in bonds to remodel and expand the multi-purpose room at Arcata High School. The bonds will be paid for by the residents of the district, which includes Orick, Trinidad, Westhaven, McKinleyville, Fieldbrook, Blue Lake, Arcata and Manila…
…Before the NHUHSD board held its regular monthly meeting Dec. 11 and approved the new spending, it held a special two-hour study session on bonds. This was sparked by the recent controversy over school districts throughout the state paying high interest rates for bonds.
At the heart of the controversy are Capital Appreciation Bonds, which allow districts to delay making payments for years, but have high interest rates.
Of the $8 million in bonds obtained by the NHUHSD, $195,000 were in the form of CABs. The interest payments alone on those CABs will come to nearly $1.8 million. That means the district is paying $1,975,000 for less than $200,000. That’s 10.1 times more than the amount acquired for school repairs…
For the rest of the story we suggest you pick up a copy of this week’s McKinleyville Press.
If you can’t wait, you can read the rest of Mr. Durham’s report on the issue here.
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Thank you for the news, Jack. It’s a good and timely report that NoHum folks should be aware of.
(Posted by Skippy Massey)