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:  http://www.leanderisd.org/default.aspx?name=abt.board.communicate

Leander ISD Debt A Major Factor in May Elections

Although it pales in comparison to the national debt, the Leander Independent School District's $2,676,639,982.00 in total debt is nothing to sneeze at.  Yep, you read that right; Leander ISD is now nearly $2.7 billion in debt.  Even worse is that LISD has been exploiting use of Capital Appreciation Bonds, or CABs, to the point of being called out in the Austin American Statesman.  (Use of CABs will result in LISD taxpayers having to pay $9 for every $1 borrowed.)  And it's not just us meany-cow Conservatives sounding the alarm on CABs; even the New York Times is voicing concern over CAB debt, and one state has already outlawed CABs.

LISD's deplorable debt is rapidly becoming an issue in the upcoming Board elections.  Jim MacKay of Cedar Park has filed for Place 3, and is questioning the poor leadership decisions that landed the district in such a financial mess.  He notes that as a result of poor financial decisions, the LISD's Fitch Bond Rating dropped from "AAA" to "AA," and most recently to "AA-".  To cope with these issues, LISD residents now pay one of the highest school property tax rates in Texas.  ($1.51187 per $100 of valuation.)  And don't forget, while Leander touts some pretty awesome and awesomely expensive football stadiums, they also have at least one empty school building they don't know what to do with.  (How about leasing them out to someone who can use them?)

Mr. MacKay is well known in the community for his volunteerism with the school district (he is "The Voice" of the Vista Ridge Football program, and since moving to the District has become a member of the Vista Ridge high School Campus Site-base committee as well as two advisory councils).  A former air traffic controller with the U.S. Air Force, MacKay continues to serve with the Air National Guard as a firefighter and medical first responder.  Some current board members are very upset with MacKay for challenging the cozy status quo, and have begun a whisper campaign claiming that they've never seen him before.  Of course this is a little awkward since the LISD School Board presented him with the Demonstrating Acts of Heroism Award just last November.

LISD leadership has been in place for a long, long time.  Trustee Don Hisle has enjoyed a seat on the board for 18 years now, and despite the district's desperate financial situation, allegedly he is very upset with Jim MacKay for asking too many pesky questions.  Unfortunately, Hisle's hegemony over the district won't be challenged this year; his current term doesn't end until 2015.  Pamela Waggoner, Russel Bundy, and Grace Barber-Jordan are all up for re-election this year.  MacKay is challenging Waggoner, who has served on the board intermittently since 2002.

I look forward to hearing more about Jim MacKay's campaign, and hope to keep readers updated until the May 11, 2013 Elections.  In the meantime, check out MacKay's website to learn more.

 Jim MacKay, Candidate for LISD Place 3.