UPDATE: Bond to Cost Monrovia Unified 5 Times the Amount Borrowed

The Monrovia Unified School District and other districts across the state took out capital appreciation bonds that will wind up costing several times more than the original amount borrowed.

The Monrovia Unified School District will wind up paying five times the amount it borrowed through a capital appreciation bond used to finance construction projects, the Los Angeles Times reports.

A $3 million bond bought by MUSD in 2010 will end up costing the district more than $15 million to pay back over 24 years, according to Times data. Monrovia is one of about 200 districts statewide to purchase these bonds, which allow districts to postpone payments on them for decades, the Times reports.

The bonds are controversial because of the high interest districts wind up paying over the life of the bond.

"Gov­ern­ment fin­ance ex­perts con­sider bonds im­prudent if the total cost is more than four times the money bor­rowed or the ma­tur­ity peri­od is great­er than 25 years," the Times writes.

Superintendent Linda Wagner said in an email that the district considers its bond debt payback ratio as a whole to be "very reasonable." Overall, the disrict's payback ratio stands at less than 3 to 1.

Wagner said she agreed with the district's decision to purchase the capital appreciation bond.

"I believe it was a wise decision by the then-Board and Superintendent because it allowed the district to access its bond funds more quickly than if it hadn't used CABs and deliver projects to the community that improved student achievement," she wrote in an email.

Dan Crandell December 02, 2012 at 02:39 AM
@Fred ... That Prop 30 money is already spent. State had thugs breathing down his neck to repay Wall Street gambling adventures. Something to do with betting on future stock market rates. And we were told "do it for the kids". Boy are we stupid or what?
Fred December 02, 2012 at 03:12 AM
@Dan, exactly my point. It's this foolishness that got us to where we thought we needed Prop 30, and the press/media/lobbists neglected to show all sides of the Prop prior to the election and many people blindly voted to "save our schools". We Californians are too eager to throw money at our problems. There's really a management problem along with with a feeling at government and business that sees it as other people's money and spend like there will always be more, MUSD is just one example of many and that we are the "other" people needs to set in.
Tom Adams December 02, 2012 at 05:46 PM
Dan, I am unsure what the district did, you may want to ask on of the board members? As for the food trucks, they have been here and will continue to come.
Dan Crandell December 04, 2012 at 12:02 AM
@ Tom Adams ... Guess I'LL have to pay attention cause I have not not seen one truck. Must be down on Duarte Rd. Thanks Tom.
Ann R December 05, 2012 at 05:03 AM
two bonds Published: Nov. 28, 2012 LA Times MUSD 2010 Principal $3,016,250 Total Debt Service $20,593,049 25.6 years MUSD 2009 Principal $3,016,664 Total Debt Service $15,650,000 24.2 years


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »