SAN DIEGO–San Diego Taxpayers Educational Foundation (SDTEF) recently announced that the San Diego Unified School District received a perfect score of 100 percent for transparency for its Props. S & Z bond program. The district received the latest of several independent, third-party evaluations giving its bond program high marks.
“Knowing that our district has one of the largest public works program in San Diego County, we take our responsibility and accountability very seriously,” Board of Education President Mike McQuary said today. “To ensure transparency, we not only have annual audits; but we also have a board-appointed Independent Citizens’ Oversight Committee (ICOC) that monitors the expenditures of bond funds, and holds public meetings each month. In addition, the ICOC posts its meeting information and documents on its web pages for anyone to review.”
The SDTEF released its scorecard and summary report, “School Bond Transparency In San Diego County,” on June 14. In the report, the foundation scores all the county school districts on their website information for their bond oversight committees, the committees’ 2015 annual reports, third-party audits and performance audits that meet SDCTA standards. San Diego Unified was one of only seven county school districts that received a perfect score.
“This report is intended to provide tools for San Diego County school districts to use in the ongoing process of improving transparency with respect to school facilities bond programs,” according to the SDTEF. “While there are many criteria that go into making a school facilities bond program effective, the scope of this study focuses solely on transparency–the accessibility of information that makes it possible for taxpayers to assess the performance of school facility bond programs.”
Founded in 1987, the SDTEF is the research arm of the San Diego County Taxpayers Association. According to the taxpayers association, it releases the research “to bring attention to the issues that impact taxpayers and often informs the Taxpayers Association’s advocacy efforts.”
The perfect score from SDTEF is just the latest in high marks for San Diego Unified’s capital improvement bond program. The district has also received excellent evaluations from independent, third-party auditors, and it’s highest-ever ratings from bond-rating agencies.
In advance of the district’s recent bond refunding effort, the district’s finance team and consultants pursued high investment grade ratings with the bond rating agencies. As a result, San Diego Unified School District received extremely favorable credit ratings for its 2016 general obligation bonds and green bonds totaling nearly $550 million. The ratings were either the highest or near-highest ratings available from the agencies, and the highest-ever for the district’s general obligation bonds.
The district received ”AAA” from Fitch Ratings, Inc., the highest issued by the agency. It also received a rating of ”AA+” from Kroll Bond Rating Agency and “Aa2” from Moody’s Investor Service, Inc. The Moody’s rating is an upgrade from their prior rating of “Aa3,” while the two others represent inaugural ratings for the district’s credit. All three rating agencies also assigned a “stable” outlook to the district, a standard assignment that signals change is likely to their ratings over the next two years.
“Achieving such high investment grade ratings from the rating agencies helped generate confidence from a variety of buyers, which led to a lower cost of borrowing for the school district, and will ultimately save taxpayers millions of dollars over the life of our bond program,” said Cindy Marten, superintendent of San Diego Unified School District.
For the seventh consecutive year, the district’s capital bond program has received the highest opinion auditors can offer for both its financial and performance audits. For the second consecutive year, the auditors had no adverse findings, a significant achievement for a bond program of this size and complexity.
“Our district has a proven track record for successfully managing its capital improvement bond programs,” McQuary said. “Each year the district’s bond program undergoes an independent performance audit and an independent financial audit, and each year the Props. S & Z bond programs have received high audit opinions.”
In its financial audit of the 2014-15 fiscal year, Crowe Horwath found that the district’s financial statements “present fairly, in all material respects, the financial position of the Propositions S and Z Bonds Building Funds as of June 30, 2015, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.” This is the highest opinion that can be bestowed on the financial statements of a school bond program.
In its performance audit, Crowe Horwath found that the Propositions S and Z bond programs “complied, in all material respects, with California Proposition 39, as incorporated in Article 13A of the California Constitution and Education Code Section 15264 et seq. during the fiscal year that ended on June 30, 2015.” This is the highest opinion that can be bestowed on an operational performance of a school bond program.”