Wednesday, September 25, 2013

Leander ISD Doubles Down on Debt

Although one might think a downgraded bond rating and a whopping $2.7 billion in debt, the caretakers of the Leander ISD might be doing the Dave Ramsey thing and trying to exercise some measure of fiscal restraint.  Alas, four of the seven school board members decided that $2.7 billion is no big deal, and last week voted to double-down on that debt burden for future generations. 

In voting to sell even more bonds, the ISD will use the funds to build a 6th high school at a cost of $106 million, but that's only the initial cost.  By utilizing even more of the highly controversial Capital Appreciation Bonds, LISD will defer payments for 15 years (Merry Christmas, Kids!) so that even with a 5.85% rate, the total cost of the high school will rise to $614 million.

The move is certainly shocking, especially considering the devastating impact of Capital Appreciation Bonds.  "CAB"s have been banned elsewhere and were nearly banned by the 2013 Texas Legislative session.  The 2015 session will certainly re-engage on this issue and hope to reform this dangerous borrowing procedure, but in the interim some folks are willing to continue to spend like drunken sailors

Debt apologists on the LISD Board, along with the oft-fined and censured loan shark bond salesmen at Southwest Securities, argue that 1) everyone is doing it, and 2) they must keep building since they are the "second-fastest" growing district in the nation.  The only problem is that neither 1 nor 2 is actually true, but what is true is that Leander ISD continues to be a poster-child for poor fiscal government.  (Pardon the poor pun.)

Here's who voted to party on increase the LISD debt with CAB's:

Pam Waggoner
Don Hisle
Russell Bundy
Grace Barber-Jordan

Board members who voted against (and for fiscal restraint):

Lisa Mallory
Will Streit
Aaron Johnson

The Board graciously allows you to contact them through this page:

1 comment:

Dave Schumacher said...

Is there any mechanism to recall in Leander? If so, what are the folks there waiting for. Sweep out all four.