New San Ysidro Interim Sup Wants To Save Property Taxpayers $51-$71 Million

By Barbara Zaragoza

Ever since Edward Velasquez became the new interim superintendent of the San Ysidro School District on February 2nd, board members have moved swiftly to regain public trust after reeling from a pay-to-play scandal, a near takeover by the state due to negative certification and a teacher’s strike.

On February 3rd, the San Ysidro School District filed a lawsuit against former superintendent Manuel Paul, demanding that he return the approximately $210,000 he received after stepping down from the position. Paul faced misdemeanor charges for allegedly taking $2,500 in cash from a contractor who wanted to get work with the district. Last month, Paul was found guilty, fined $5,000 and sentenced to two months in jail. The lawsuit argues that because Paul was found guilty, he is obligated to pay the district back for the money he received from a retirement agreement.

At the February 12th board meeting, Velasquez then made a suggestion to trustees: refinance the district’s Proposition C bond.
Proposition C was passed in 1997 when, fed up with crumbling infrastructure, a grass roots campaign convinced voters to authorized $250 million for the district, the largest bond ever issued in California history. Velasquez explained that refinancing the Prop C bond from a 7.2% interest rate down to a 5.2% interest rate could be a first step in building back trust within the community. A retired educator of 35 years, he is credited with taking the Lynwood Unified School District out of near bankruptcy within three months.

Velasquez said, “If things go right, we’ll be able to do a great job in saving millions of dollars to the property taxpayers.”

He brought in a group of legal and financial advisors to explain the refinance. Frank Vega of RBC Capital Markets said that the maximum tax rate has been reached for property owners. “So because the way the ballot measure was written, the district cannot sell any bonds today. You’re over your maximum legal tax and there’s nothing the district can do about that… So one option is to stop building, stop construction. Other option, and many districts do this is, can we refinance our debt, can we lower our payments so that the tax rate goes down with it. And if you execute a bond refinancing, then the payments will go down, ideally the tax rate goes down with it, and then that might allow you to sell bonds at some point in the future.”

The rate reduction would save property taxpayers anywhere from $51 to $71 million over the next thirty-five years. Vega said, “Every dollar of savings goes to the community.”

Lora Duzyk, Assistant Superintendent of Business Services for the San Diego County Office of Education, sat in the audience and made it clear to board members that the county would have to review and approve the refinance.

Newly elected trustee Marcos Diaz pointed out during the meeting that board members receive a $237 per month stipend.

Trustees are now tasked with reviewing hundreds of pages of legal and financial paperwork that the negative accreditation and lawsuits have left behind.

Velasquez said, “I want the community to know that you can trust this board, you can trust this administration… I didn’t create this mess. This board didn’t create this mess, but we’re going to fix it. We’re going to fix it for the kids, first, the parents and the community.”

Still pending is the $12 million owed to solar company EcoBusiness Alliance due to a breach-of-contract lawsuit. San Diego Superior Court records show that the district filed an appeal, which was certified on January 16, 2015.

On February 7th the board held a special meeting, where they entered into a legal service agreement with Long Beach lawfirm Leal & Trejo, PC. Velasquez said: “We brought in special council for two things. One is to deal with the EcoBusiness, and the other is to deal with the bond. General council didn’t want to handle the EcoBusiness lawsuit.”

He was referring to the law firm Stutz Artiano Shinoff & Holtz that represented the district in the breach-of-contract lawsuit and lost. Now, trustees have agreed that attorney William Trejo will take over at a rate of $180 per hour. Community members are waiting to see if Trejo will go forward with the appeal, settle with EcoBusiness, or pay the $12 million in a district whose overall budget is about $33 million per year.

The San Ysidro district consists of seven schools and serves about 5,500 students, mostly lower-income. An eighth school, Beyer Elementary, is currently undergoing renovation.