press release 2017 11 16
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press release 2017 11 16

FOR IMMEDIATE RELEASE

Contact: Richard Michael
Phone: 909-378-5401
E-mail: walnutwatchdogs+press[at]gmail.com
Web: http://www.bigbadbonds.com/

November 16, 2017

County Officials Thumb Nose at California Legislature: Hold Illegal Elections


County officials ignore statutes when it suits them.

An informal coalition of taxpayer watchdogs, including Howard Jarvis Taxpayers Association, has sent a notice and demand to Trinity County officials to void a fraudulent Proposition 39 bond election ordered by the tiny Mountain Valley Unified School District on June 14, 2017.

Instead of rejecting the election order for the November 7, 2017 election, Shanna White ($117,838 total pay and benefits), the appointed county clerk and elections official, proceeded to hold the election at which the only item on the ballot for district voters was Measure J, a $5,950,000 bond.

"The legislature specifically restricted when an election for the low voter threshold (55%) bonds may be held," said Richard Michael, who runs the California School Bonds Clearinghouse web site exposing the corruption surrounding local school and college bonds around the state.

According to the California Education Code, which governs Proposition 39 bond measure elections, a governing board may only order an election for Proposition 39 bonds at a state-wide election or when there is already a regularly scheduled local election where all the district's voters are participating.

Proposition 39 bond elections impose a direct tax on all residential and business property owners in a district. The tax is secured by the all the taxable property in the district, in the same way as repayment of a mortgage note is secured by the property. The law exists to protect district taxpayers by prohibiting low-voter-threshold (55%) bond measures at an election where the bond measures are the only items on the ballot. The restriction is intended to prevent a stealth election where the voters won't even realize there's an election going on.

In the case of Mountain Valley, there was no other election on the ballot on November 7th.

"This is just another illustration highlighting how the people of California have misplaced their trust in public officials," said Michael.

Mountain Valley trustees adopted the election order, written by the district's bound counsel, on June 14th, then held onto it for more than a month before filing it with White. This is a typical tactic to keep the public in the dark about these taxes. Bond counsel, district staff, and the school board, in a further effort to prevent transparency, did not cite the governing board's legal authority to order the election in the resolution. The registrar of voters has a duty to qualify candidates and measures for the ballot. It's not clear whether or not White was ignorant of the law or simply ignored it.

Margaret E. Long, County Counsel, is required by the Election Code to write an Impartial Analysis for each bond measure. The Impartial Analysis addressed the law, but ignored or missed the prohibition. The Board of Supervisors also failed to stop it, when they "consolidated" the special bond election with nothing, a violation of Election Code 10400.

"It appears to be a case of lemmings following each other over a cliff," said Michael. "All the county officials, the district officials, and their lawyers and advisors are presumed to know the law, yet they clearly didn't comply with it."

Mountain Valley (about 300 students) didn't even run a campaign aside from posting unlawful campaign materials on the home page of its web site.

At best, the campaign materials were deceptive. The mold issue, which allegedly was the impetus for the bond measure, had already been funded through $5,000,000 in certificates of participation which had been approved in April and sold in August. The district's "fact" sheet misled voters that mold at the high school, which was only discovered two months after the governing board ordered the bond election, was one of the reasons for the bond.

"It's not uncommon to see deceptive practices in school bond elections," Michael said, "because the bond counsel and the financial advisors only get their huge pay day after the bond measure has passed."

In the case of Mountain Valley, the financial advisor also did a campaign survey. The results of that survey were used to formulate the 75-word question which the voters considered. According to Attorney General Opinion 13-304, issued on January 26, 2016, Kamala Harris concluded that that practice was a criminal violation of Education Code 7054.

State-wide Fraudulent Proposition Bond Elections

2017 was a banner year for illegal Proposition 39 bond elections with four of the five November measures presenting voters with only bond measures on the ballot.

In Monterey County, officials ignored the lack of authority of the North Monterey County Unified School District to call two bond elections despite notice and demand and it's follow-up. Public officials wasted over a quarter million dollars on the election alone. District voters made the issue moot when an unfunded local opposition campaign defeated over $30,000 in special interest funding to send both measures to a resounding defeat. The measures were for $36,000,000 and $40,000,000 ($154,621,300 in taxes). The superintendent admitted in e-mails obtained through a public records request that the district's 2013 Measure H was also illegal. All the Measure H bonds were quickly issued, but the statute of limitations has not yet run on the securities fraud connected with their issuance.

In Los Angeles County, officials failed to reject the $98,000,000 ($178,532,415 in taxes) measure for Glendora Unified School District. That measure was trounced by another unfunded local campaign. The waste of taxpayer money on the election is estimated to exceed a quarter million dollars as well.

When the school bonds cartel reviews the results of bond measures for 2017, it will see a radical reversal of the previous willingness of voters to approve these bonds. Of the six bond measures presented to voters in 2017, three of the four illegal measures failed, and only one legitimate measures passed.

Michael cautions, however, "There are already a dozen school and college district bond measures ordered for June 2018. Taxpayers can't be complacent and let these measures slip under their radar. The earlier that action is taken, the more likely bonds that violate the Proposition 39 mandate of a 'list of the specific school facility projects' can be defeated."

About Mountain Valley Unified School District Debt

The bond authorization was the maximum amount the district could ask for under Proposition 39 rules -- $60 per $100,000 of assessed value. The measure would cost taxpayers at least $11,621,300 in new taxes. The cost of the certificates of participation adds to that an estimated $10,000,000 which the district will have to pay from its general fund.

About California School Bonds Clearinghouse

The California School Bonds Clearinghouse exists to provide tools and strategies to aid taxpayers fight the rampant lawlessness that has fostered an industry and a culture of corruption around Proposition 39 bonds, from the unlawful use of public resources to win elections, to the co-opting of the allegedly independent citizens' bond oversight committees, to the misuse of bond proceeds for purposes prohibited by the California Constitution.

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References

Notice and Demand Letter

Trinity County Elections

Education Code 15266(a)

MVUSD Bond Campaign

California Attorney General Opinion 13-304

 


Copyright © 2015-2017, Richard Michael. All Rights Reserved.