VOL. 17 ISSUE NO. 43   | OCTOBER 26 – NOVEMBER 1, 2011


CCUSD93 waxing the financial fib

On Oct. 20, Willett granted the Goldwater Institute’s motion for attorney’s fees and costs in the amount of $31,867.60

learnyes signMaricopa County Campaign Finance Director Kristi Passarelli contacted the county attorney’s office to determine if LearnYes.org yard signs displayed inside vehicles on campus constitutes a violation of A.R.S. §15-511(A), prohibiting the use of school district personnel, equipment, materials, buildings or other resources for the purpose of influencing outcomes of elections.  Photo by Linda Bentley

CCUSD93 – For starters, Cave Creek Unified School District, while asking voters to approve a 15 percent M&O (maintenance and operations) override, already has M&O funding in place, which will take the district through fiscal year 2013-2014.

So, the campaign sticker on the rear window of Superintendent Debbi Burdick’s BMW, which reads: “If you can read this, keep 72 of our teachers, Vote Yes – CCUSD Override Nov. 8,” is disingenuous at best.

CCUSD93 typically holds override elections in off years, which usually generate a lower voter turnout than regular cycle general elections when other measures/candidates appear on the ballot.

It should be noted it costs taxpayers additional money to hold separate school elections rather than consolidating with other elections in Maricopa County.

CCUSD93 also likes to hold elections to “renew” overrides already in place years before they expire; in case voters reject the measure, they can return year after year to ask again.

Overrides are good for seven years. District voters passed the current one in 2007.

So, when CCUSD93 was unable to pass seven out of the last nine overrides, most of those requests were to “renew” existing overrides prematurely.

District residents must also pay for each of those elections, many of which were not consolidated with any other elections in Maricopa County for cost sharing.

Until the legislature passed a law requiring all school bond and override questions to appear on the ballot in November, CCUSD93 used to hold override elections in the off years in May, hoping for an even lower voter turnout.

The district currently has two overrides in place, a 10 percent M&O override and a K-3 override.

However, it is threatening to dismiss 72 teachers if this 15 percent override doesn’t pass, while at the same time it has been carrying over budget surpluses.

Additionally, the district has never expended the bonds issued in 2006 for the purpose of building a new high school, despite IRS regulations requiring tax-free municipal bond projects to be completed within three years.

It’s been over five years, no new high school has been built and taxpayers have been saddled with 20 years of property taxes to pay back bonds with interest alone coming to approximately $600,000 per year.

In 2000, district voters authorized $41.6 million in bonds for the purpose of building four new schools and purchasing pupil transportation vehicles.

However, according to the official statements issued by bond underwriters Peacock, Hislop, Stanley & Given, Inc., CCUSD93 issued $44 million from the 2000 project bonds as follows:
• May 4, 2001: $24 million Series A
• April 28, 2006: $5 million Series B
• Aug. 30, 2006: $15 million Series C

On May 14, 2002, the governing board passed a resolution to transfer $3,050,000 of the May 4, 2001 bond issue to the November 1999 bond election to complete construction of Lone Mountain Elementary School.

Basically, with only $24 million issued from the 2000 bond, the board authorized the district to make a journal entry transfer of $3,050,000 bond funds from the 2000 bond issue to the 1999 bond authorization.

If that transfer were considered to be 10 percent of the bond proceeds that may be used for projects other than those authorized by voters, it should have been limited to $2.4 million.
In 2006, the district issued an additional $20 million in bonds from the 2000 bond election, bringing the total issued to $44 million, exceeding the $41.6 million authorization by $2.4 million.

However, during the Oct. 11, 2011 governing board meeting, Associate Superintendent Kent Frison presented the annual bond program update, with no mention whatsoever of that $3,050,000.

In fact, according to Frison, only $40,950,000 of the bond authorization was sold, which is exactly $3,050,000 shy of the $44 million actually issued.

Additionally, in recapping the 10 percent money spent on other projects, Frison fails to include the $3,050,000 there either.

His expenditure report claims $3.4 million in 10 percent money was spent through June 30, 2011, when, in fact, after adding in the $3,050,000, $6.4 million has actually been expended.

The bond report also doesn’t reflect how the 10 percent money was spent prior to the 2010-2011 school year, during which the district claims to have spent $1.6 million, the bulk of which ($1.2 million) was used to reconstruct the Cactus Shadows High School parking lot.

Frison simply lumps all the 10 percent money together through June 2011 as $3.4 million, which means $1.8 million was spent in prior years and obviously does not include the $3,050,000 transferred to complete Lone Mountain.

That means the district has exceeded its 10 percent spending by $1.25 million.

Also take into consideration 10 percent of the bond proceeds is included in the bond proceeds, not 10 percent over and above the amount of the bond proceeds.

In other words, if the district diverted 10 percent of the proceeds, or $4.16 million, to projects other than those authorized by voters, then it would have $37.44 million remaining to spend on authorized projects.

Frison indicates in his bond report the district has spent a total of $30,129,685 in 2000 bond proceeds through June 2011. That figure also fails to include the $3,050,000.

So, if we were to add that in, the expenditures through June 2011 total $33,179,685.

Add in what Frison claims as 10 percent money expenditures through June 2011 and it comes to $36.5 million, leaving less than $1 million for the remaining 2000 bond projects.

As readers may be aware, CCUSD93 was sued by the Goldwater Institute on behalf of district taxpayers after the district decided to use the remaining 2000 bond money for purposes other than those approved by voters, based on Section 34, a law introduced by then Rep. Nancy Barto, R-Dist. 7, as a floor amendment to the 2010 Session Laws.

Last month, Maricopa County Superior Judge Eileen Willett found that law “contrary to the reasonable expectations of taxpayers within the district, the express purpose of a bond election, and the federal and Arizona Constitution.”

Willett further held, “Section 34 constitutes a special law and as such also violates … the Arizona Constitution.”

Last week, Willett granted the Goldwater Institute’s motion for attorney’s fees and costs in the amount of $31,867.60.

The board held an executive session to discuss the matter before Tuesday’s regularly scheduled meeting but did not agendize the item for board action.

It appears the district does not wish to publicly discuss the matter until after the override election.

As far as the election goes, A.R.S. §15-511(A) prohibits the use of school district personnel, equipment, materials, buildings or other resources for the purpose of influencing outcomes of elections.

The district apparently finds nothing wrong with advocating passage of the override on campus by displaying LearnYes.org yard signs reading: “Vote Yes! Override” placed inside the windshields of cars strategically parked in the district’s parking lot.

Maricopa County Campaign Finance Director Kristi Passarelli has contacted the county attorney’s office to determine if such displays constitute a violation.