|No Premium For Honesty - How the CUSD Skims An Extra 5%|
The CUSD has done it again. They have sold bonds that have such a high rate of interest that investors are willing to pay up to a buck and a quarter on the dollar for them. Yep. Investors are so thrilled by the interest we are paying on those bonds that they are lining up to pay $125.00 for a bond with a face value of $100.00.
If you were to ask the CUSD, they would tell you that they reduced their borrowing authority by 18 million dollars in the series A bonds and 20 million more in series B bonds. 81 million - 38 million. You do the math.
The thing is, the CUSD borrowed and $19,715,860.15 for series A bonds and $21,067,416.35 for the series B bonds.
Here is the proof:
Series A bonds --
Series B bonds --
Attorney General, Kamala Harris has issued an opinion that selling bonds at premiums is not only unconstitutional, it is fraudulent as it deceives the taxpayer. Here is a link to her opinion:
Here is a link that explains the in and outs of selling school bonds for a premium:
As usual, we as a community have to watch what they are doing, whom ever they might be, when they are spending other people's money. Why not offer interests rates that generate even higher premiums. Why not offer to pay 18% or even 29%.
At least our School Board hasn't resorted to Capital Appreciation Bonds.......yet.