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Frontline Strategies’ Mark Sandriff on the costly loan of California’s Poway School District.
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Look out for sharks and California loan sharks that is one San Diego school district is using a controversial type of Muni bond.
For school renovations but listen to this.
In order to borrow 105 million dollars they have to pay back almost eighty billion dollars in part I love.
The payments don't start for twenty years.
What happens we're gonna -- down to mark Sandra up front -- strategies.
Thanks for coming back in the show mark you know I hardly know where to start with this one.
It is there is it's not as bad as it sounds are as we've said it up.
No no I think it's pretty much -- not just as bad its words it's it's I mean look at it this way.
You know first of all they decide that they're not gonna go back to the voters because it's a bad environment to ask for more taxes -- there already asked them for an extension once.
On -- 2002 bond that was gonna start to you know may -- help with W renovating and -- replacing some of their older school buildings yeah now they've gone and said look.
We're we're gonna if we're gonna extend the loan not a few more years we're just not gonna tell you that we're gonna have balloon payments of 304050.
Million dollars coming up read about the time your kids -- -- -- Seems like paying a billion dollars 405.
Million dollars worth of money.
Is really awful I mean I know when I sit there and I calculate my mortgage and how much I will have actually paid over time vs the price of the house in the first place it's really ugly but this is really ugly right.
Well.
If it's it's not it's just not ugly it's -- this is this is worse than ugly this is like the combination of all the ugly step -- rolled into 11 of all.
You know you've taken basically a -- five million dollars and said yes on the pay you back a billion.
Only I can't refinance the loan because that's part of the loan agreement and on top of that.
You're hoping that in twenty years you're gonna have the extra fifty million dollars added to your original tax revenue.
That's going to allow you to try to make these balloon payment.
Your next always -- that's.
-- -- also years those politicians are not gonna be there I mean that's what this is really LL outright is that the little on the homeowners -- gonna be there either yeah.
But that the people are signing up -- -- -- aren't going to be around are going to be in office when it most likely when it comes to you right twenty years from now so they don't really have to worry about it go ahead.
This this this is the way I look at it -- I'm I'm a private pilot this would be like me.
Loading up my plane to its maximum payload capacity.
And taking off with my passengers not telling them that don't have enough fuel to make it to my destination but I'm hoping for a really strong tail wind.
Now we're -- -- stay on top of this story -- I hope that they tax payers in this district do something about this because I don't think.
Repainting the school and renovating it is worth this -- debt down the road.
Mark thanks so much going on we always appreciate your point --
