School bond measures raise funds from businesses with financial interest
As voters around the state decide on more than two dozen local school bond measures tomorrow, the campaigns promoting many of them are funded largely by businesses that stand to benefit financially.
On local ballots from San Diego to Sonoma County, 28 school bond measures would authorize a combined $2.1 billion in debt to fund school construction, repairs and improvements, according to Ballotpedia, which tracks ballot measures. Twelve of the measures affect schools in the Bay Area, from Antioch to Mountain View and Sebastopol.
Bond campaigns draw small contributions from community members and school officials, but the larger donations often come from companies that work for the school districts: architects, construction companies, and the financial and law firms hired to work on selling the bonds. By law, school districts can’t spend public money to support bond measures, leaving the campaign committees reliant on donations from contractors.
A California Watch investigation found that in the last five years, almost every time an underwriting company gave money to a successful school bond campaign, that firm was hired to sell the bonds to investors for a profit. Critics, including some county treasurers, call the practice “pay to play,” arguing that the contributions affect the school districts’ business decisions. But school officials and underwriters counter that the money has no influence, pointing out that the companies usually are hired before they donate.
In Sonoma County, Measure E would authorize $35 million in bonds for the Healdsburg Unified School District. The committee backing the measure, Citizens for Healdsburg Excellence in Education, collected $5,000 from an architectural firm that has worked for the district and $3,500 from a law firm the district hired to work on the bond issue.
Piper Jaffray, the underwriting company chosen by the district to sell the bonds if the measure passes, gave $7,500 late last month.
“It’s in their interest, obviously, to help it get passed, but more importantly, we need to have the actual passage to make it work and accomplish the objectives of the community, and I don’t know that that’s a negative thing,” said John Holt, the committee’s volunteer treasurer. “Seems to me like that’s a rational thing to do.”
Holt said he also helped pick Piper Jaffray as the district’s underwriter, but the campaign contributions never factored in.
Piper Jaffray did not respond to a request for comment, but its website states: “We will not make, or indicate a willingness to make, any financial contribution as a condition to being retained as an underwriter.”
In San Diego County, Proposition H would authorize $12 million in bonds for the Alpine Union School District. Nearly half the money the campaign raised from January to May 19 came from a $15,000 donation from Piper Jaffray, which the district hired as an underwriter. An air-conditioning company gave $5,000, an Indian tribe that runs a local casino gave $4,000, and the law firm hired by the district gave $2,500.
Rob Turner, Alpine Union’s business manager, said the district never discusses campaign contributions when hiring a bond underwriter or bond counsel.
Several teachers, principals and district officials also gave between $100 and $250 each.
“The core group of people that are participating in this have all put in money personally,” said campaign treasurer Chris Loarie. “We can’t go out and ask people if we’re not willing as a committee … to put money in this thing.”
Loarie said local Indian tribes have long supported the school system, and the air-conditioning company worked for the district in the past.
Loarie said the bond campaign has been an “uphill battle” because voters already had approved bonds for the local high school district.
“This is necessary money. This is repaving; this is re-siding one of the schools that has wood that is literally going to fall off the building,” he said. “I don’t want to see the schools go into a state of disrepair.”
The Clovis Unified School District, near Fresno, is asking voters to approve Measure A, a $298 million bond measure. The campaign committee, Citizens for the Future of Clovis Schools, received many $25 and $50 donations from teachers and principals, along with donations up to $15,000 from construction and architectural firms.
Keygent, a financial advisory company hired by the district to help sell the bonds, gave $10,000. Keygent stands to earn between $55,000 and $75,000 on each bond sale.
A team of district staff picked Keygent after reviewing proposals from several different financial advisers, said Michael Johnston, assistant superintendent for business services. Campaign donations never factored in, he said.
“We’re trying to pick what’s best for the district,” he said.
Johnston said other contractors give money to the bond campaign “because there may be an opportunity down the road for them to bid and maybe be a successful bidder, but that depends on the bid process.”
Don Watnick, treasurer for the Clovis bond campaign and former chairman of the Fresno County Republican Party, said he’s not troubled by the donations from contractors.
“They know up front that there are no guarantees that they’ll get anything from it,” he said.
California school bond measures on the June 5 ballot
|Dublin Unified, Measure E||Alameda||$99,000,000|
|Biggs Unified, Measure B||Butte||$6,000,000|
|Gridley Unified, Measure C||Butte||$11,000,000|
|Gridley Elementary, Measure D||Butte||$2,500,000|
|Antioch Unified, Measure J||Contra Costa||$59,500,000|
|Pollock Pines Elementary, Measure K||El Dorado||$9,000,000|
|Clovis Unified, Measure A||Fresno||$298,000,000|
|Sierra Unified, Measure O||Fresno||$5,400,000|
|Charter Oak Unified, Measure CO||Los Angeles||$47,000,000|
|Sulphur Springs Union Elementary, Measure CK||Los Angeles||$72,000,000|
|Brea-Olinda Unified, Measure E||Orange||$54,000,000|
|Savanna Elementary, Measure G||Orange||$28,750,000|
|Jurupa Unified, Measure M||Riverside||$125,000,000|
|Val Verde Unified, Measure L||Riverside||$178,000,000|
|Alpine Union, Proposition H||San Diego||$11,995,000|
|Mountain Empire, Proposition G||San Diego||$30,800,000|
|Lincoln Unified, Measure A||San Joaquin||$48,500,000|
|Cabrillo Unified, Measure S||San Mateo||$81,000,000|
|Buellton Union, Measure V||Santa Barbara||$3,200,000|
|Cupertino Union, Measure H||Santa Clara||$200,000,000|
|Milpitas Unified, Measure E||Santa Clara||$95,000,000|
|Mountain View Whisman, Measure G||Santa Clara||$198,000,000|
|West Valley-Mission Community College, Measure C||Santa Clara/Santa Cruz||$350,000,000|
|Healdsburg Unified, Measure E||Sonoma||$35,000,000|
|Guerneville, Measure F||Sonoma||$6,000,000|
|Old Adobe Union, Measure G||Sonoma||$26,000,000|
|Sebastopol Union, Measure H||Sonoma||$9,000,000|
|Wright, Measure I||Sonoma||$14,000,000|
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