Perhaps you have already seen it. My understanding is that at least some of these guidelines were later legislated. I think you will need to cite the law and the PUSD’s own rules and guidelines (but better the law) to successfully argue to them their need for transparent accountability as to how these funds are being used, IMO.
Here is a good “layman’s guide” to CA Education Law” put out by the League of Women Voters.
Special Assessment Bonds often are considered a special form of revenue bonds since the debt service is payable only from the proceeds derives from a special assessment levies against those who benefit from the facilities constructed (e.g., special assessments for curbs and gutters in certain residential areas). The burden of financing special assessment bonds falls on those individuals or properties receiving the greatest benefits from the improvements. In some cases, however, the property owners who must pay the assessments have had little or no say in the issuance of the bonds for which they must meet the debt service commitments Such is the case with the so-called Mello-Roos bonds in the State of California.
After the passage of the property tax-cutting Proposition 13 in 1978, funding for local infrastructure improvements in dried up. The State legislature adopted special legislation that permitted the creation of special taxing districts which empowered local governments to cooperate with developers to achieve more flexible funding options to finance streets, schools, sewer and water facilities and other specific improvements in primarily new residential areas. Billions of dollars of bonds were issues to finance these improvements with the homeowners served by these facilities obligated to pay off the bonds through annual assessments added to their property tax bills.
Until the residential development has been completed and all of the property has been transferred to individual owners, however, the burden of the assessment is shared by the developer and the homeowners that have moved into the area. When the California real estate market experienced some slow downs in the early 1990’s, some developers where forced to file for bankruptcy, prompting banks or other investors to begin fore-closure proceedings on the development. The bank then assumes financial responsibility for the special assessment bonds. In many cases, bond payments are delinquent and the banks must either assume this additional obligation or use any reserves in the bond offering to pay off the bond-holders.
In 1994, nearly 5 percent of all Mello-Roos bond issues were reported as experiencing some degree of financial difficulty primarily due to due to significant delinquencies. The value of the bonds in trouble was nearly $300 million. Examples include: (1) an $8.1 million bond issues by the County of Los Angeles in 1988 for a Mello-Roos district in which nearly 22 percent of the bond payments are delinquent by local real estate developers; (2) a $7.4 million Mello-Roos district in the northwest area of the City of San Bernardino which experienced a 77 percent delinquency rate; and (3) a 211-acre housing and commercial project in the City of Oxnard on which the developer stopped payment on the bonds in 1991 and the bonds went into default in October, 1993.
Several changes in the Mello-Roos enabling legislation were adopted in 1993 in an effort to prevent abuses and to reduce risks to municipalities and homeowners in the event of default caused by bankrupt developers. Tighter rules for policing the bonds were adopted, and city and county agencies are now required to limit fee increases to homeowners in the event of default. Developers are required to do a better job of disclosing to home buyers that they will be living in a Mello-Roos district and how much in special district taxes they will be required to pay.
Summary
Revenue bonds can play an important role in the long-range planning of capital facilities. It must be clearly established, however, that revenues generated by the proposed project are sufficient to: (1) cover the cost of operations, maintenance, and debt service; (2) provide a comfort-able margin of working capital; and (3) create a reserve fund for emergencies and to cover possible declines in income. In short, revenue bonding must be approached with the principles of sound management and debt administration firmly in mind.
From this excerpt, it doesn’t appear that your issue of receiving agency/entity misuse of MR bond income was addressed in the 1993 legislation. However, I have not yet had a chance to research state law on this subject.
