VOL. 17 ISSUE NO. 51   |  DECEMBER 21 – 27, 2011


Show us the lies!

Absent facts, school board resorts to name calling

david schaefferCCUSD93 – Cave Creek Unified School District Governing Board President David Schaefer (l) accuses Sonoran News of lying, because the facts don’t support his or the district’s attempt at obfuscating its misuse of public funds.

As part of the Dec. 13, 2011 governing board meeting agenda, Sonoran News made the board’s self-evaluation top-three list of “challenges the board faced.”

While the board was asked to “list in order of priority the three challenges the board faced [and] briefly review how the board dealt with them,” the statements made by board members, without attribution, were comprised of anger, pettiness, complaints and finger pointing, not how the board members dealt with any of it.

For example, budget topped the list of challenges with regard to the district’s failure to pass an override, blaming the state for cuts to funding, which it said places more pressure on local elections.

The state doesn’t have any money except that which comes from taxpayers. The taxpayers are broke, therefore the state is broke. It’s the same broke taxpayers at the local level. In other words, if there’s no money at the state level, it’s because there’s no money at the local level.

Another board member stated, “most board members worked hard to pass [the override].”
Another comment, probably from Schaefer, stated, “A local publication continues to press a negative agenda without actually attending our meetings to see what we do or speak with the board president. These critics refuse to engage in dialogue or present reasonable alternatives. Accusations of misuse of public funds are reckless and utterly false.”

Another said, “Sonoran News lies and spreads propaganda against the school district. Most board members work hard to promote the truth.”

No board member or district administrator has ever cited specifically what they’re claiming Sonoran News lied about or what they deem propaganda.

For the record, I’ve lived in the district for about 20 years and have attended more governing board meetings than any current member of the board with the exception of Susan Clancy.

Sonoran News stopped attending board meetings when, under former Superintendent Tacy Ashby’s leadership, meetings became front-loaded with band, glee club, film and other such student performances and/or presentations that had nothing to do with board business.

Board meetings couldn’t seem to ever get down to the business at hand, repeatedly continuing important agenda items on into the future, while always having time for performances.

Besides, the board-approved minutes are a detailed representation, if not an actual transcript, of what transpired during each meeting. If they’re not accurate, the board shouldn’t approve them.

I personally attended all of the 2006 and 2007 meetings during which the board was advised on the implications of issuing bonds in advance of having an established project to fund, not to mention all of the long range planning committee presentations as the district continued to ebb and flow on what it wanted to build.

An ongoing IRS investigation, resulting in legal costs that have already exceeded $50,000, to address the matter, speaks volumes about the district’s handling of its finances.

The 1,850 or so pages of documents the district has submitted to the IRS with respect to the 2006 issuance of the $15 million in bonds from the 2000 bond authorization corroborates everything Sonoran News has reported to date on the subject.

The board was advised in 2006 about the consequences of issuing bonds in advance of knowing how those funds would be used or without reasonable expectation the funds would be spent within three years.

Superintendent Debbie Burdick, as associate superintendent of curriculum at the time, and Associate Superintendent of Finance Kent Frison were present during the April 11, 2006 meeting when the district’s Bond Attorney Fred Rosenfeld and Bryan Lundberg, from the bond underwriting firm Peacock, Hislop, Staley & Given, Inc., provided stern warnings about IRS and SEC rules with respect to handling of tax-free bonds.

Rosenfeld advised the district had a little “wiggle room,” whereas 10 percent of the bond proceeds could be used for projects other than those specified in the ballot pamphlet.

Knowing the bonds would expire in November 2006 the board disregarded counsel’s advice and voted to issue $15 million in bonds from the 2000 bond authorization.

During that April 2006 board meeting, Mark Warren’s motion to issue the bonds, seconded by Stephanie Reese, passed unanimously.

It’s been five years and the bond money has still not been expended as required.
And the IRS wants to know why.

Although the district issued the bonds and accepted the matching funds from the Arizona School Facilities Board (SFB) to build a new high school, the board subsequently changed its mind about what it wanted to build.

The district then opted to call for a bond election in November 2007, when it asked the taxpayers to authorize an additional $123 million in bonds.

Taxpayers voted against the bond measure, which included an additional $45 million to build a “mega-high school” on the southern campus, along with millions more for “repurposing” the existing high school, for which taxpayers hadn’t finished paying.

The economy subsequently plunged and the SFB placed a moratorium on all projects that were not currently underway.

So, the district lost its matching funds to build a new high school.

That would not have happened, had the board followed Rosenfeld’s stern warnings.

He told the district if it is unable to spend the bond proceeds in three years due to a problem created by a third party, such as the SFB withdrawing funds or an earthquake – an event beyond the district’s control – it probably would not result in penalties.

However, he cautioned, “A change in determination by the board is not sufficient to prevent fines ... It is when it is within the district’s control that the IRS gets upset.”

Rosenfeld went on to warn the board its failure to expend the funds within three years could render the tax-free bonds taxable and investors could sue the district if the board was responsible for causing the funds not to be expended and loss of tax-free status.

It was the change in determination by the board that delayed expending the bond proceeds which resulted in the loss of SFB funding.

The district enlisted members of the state legislature to introduce unconstitutional laws that would allow a simple majority vote of the board to spend bond proceeds on projects other than those authorized by voters.

Attempts to spend the money on other projects resulted in the district being on the losing end of a lawsuit brought by the Goldwater Institute on behalf of district taxpayers.

Although it is appealing the court’s decision, the district owes the Goldwater Institute more than $32,000 in attorney fees and costs.

The Dec. 13, 2011 board evaluation touched on the Goldwater Institute lawsuit as well, with one board member complaining about building maintenance being stalled as a result, while pointing the finger of responsibility at the state for forcing the burden on local taxpayers.
“[O]ne board member sided with the plaintiffs,” complained another.

Another member blamed a “few community members” for placing “legal constrictions” on the board, preventing it from going forward with needed projects.

Actually, it is the U.S. and Arizona constitutions that place legal constrictions on the board, which attempted to divert funds from voter-approved projects to projects it preferred.

Board members continue to blame everyone but themselves as Burdick laments how the district is now unable to perform needed roof repairs or replace fire alarms, projects the district could have prioritized before spending more than $2.3 million of the bond proceeds on items such as electronic marquees, landscape design, courtyard landscaping, playground equipment, soccer and softball fields, architectural design and redesign of a school and other buildings it will likely never build.