A Better Path Forward: Learning from Past Financial Mistakes to Protect Our Schools and Taxpayers

In 2011 and 2014, the Placentia-Yorba Linda Unified School District (PYLUSD) made the decision to issue Capital Appreciation Bonds (CABs) to finance school construction and modernization projects. While these bonds provided immediate funding without raising taxes, they deferred all payments, including both principal and interest, until maturity. This decision resulted in a long-term debt burden that will cost future generations exponentially more than the original borrowing. For example, in 2011, the district borrowed $22.1 million but will ultimately have to repay $281 million by 2049, which equates to $12.73 for every dollar borrowed​.

Unfortunately, these bonds have placed a heavy burden on future taxpayers, who will face difficult decisions in the coming years. As a candidate for the PYLUSD School Board, I am committed to ensuring we avoid repeating such mistakes. Here are some proactive strategies we can implement to prepare for the eventual repayment of these bonds and avoid massive negative financial consequences like school closures, teacher layoffs, or tax increases.

1. Create a Long-Term Reserve Fund

One of the most effective ways to prepare for future bond repayments is by establishing a Debt Repayment Reserve Fund. By setting aside money each year, the district can build up reserves specifically earmarked for covering the cost of these bond payments. This proactive approach ensures we don't face a financial crisis when the payments come due.

We can look for additional revenue sources, such as selling surplus property or entering partnerships with local businesses, and direct some of that income into this reserve fund. Over time, these reserves can reduce the need for drastic measures like raising taxes or cutting services.

2. Leverage State and Federal Aid

In addition to building a reserve, we must actively pursue state and federal aid. California offers state matching funds for school construction and modernization, which can help cover future infrastructure needs without additional borrowing. We should also lobby for federal programs like Qualified School Construction Bonds (QSCBs) or Build America Bonds (BABs) that provide significant subsidies, reducing the cost of borrowing.

If programs like these are not available at the time, we should advocate for the creation of similar initiatives at both the state and federal levels. Taking advantage of these opportunities can alleviate the district’s financial burden and prevent the need for future debt accumulation​(

3. Increase Efficiency and Cut Costs

To prepare for upcoming financial obligations, we need to ensure that the district operates as efficiently as possible. Conducting a thorough review of the district’s budget can identify areas where costs can be reduced without compromising the quality of education.

Some examples include improving energy efficiency in school buildings, reducing administrative overhead, and consolidating services between schools. Every dollar saved can be redirected toward debt repayment, helping to shield our schools from future cuts or closures. Additionally, fostering partnerships with local businesses and community organizations can lead to new revenue streams, which can further alleviate financial pressures​.

4. Engage the Community in Planning

One of the most important ways to ensure responsible financial management is through community engagement and transparency. Taxpayers deserve to know where their money is going and how it is being spent. By involving the community in discussions about future financial plans, we can gain their support for fiscally responsible measures, including the creation of reserve funds or seeking voter approval for more manageable forms of debt like General Obligation Bonds (GO Bonds).

Community engagement can also foster innovative ideas and solutions to avoid future financial hardship. When taxpayers are involved in the process and can see the direct impact of their contributions, they are more likely to support initiatives that benefit the entire district​.

5. Implement Long-Term Financial Planning

Finally, we need to implement a robust, long-term financial plan that includes 10- to 20-year projections. This will allow us to anticipate upcoming financial challenges and prepare for them well in advance. By projecting revenue growth, identifying potential risks, and establishing contingency plans, the district can make informed decisions that avoid financial crises.

This type of long-term planning should also include a detailed roadmap for repaying the CABs, with milestones and checkpoints to ensure we are on track. With this proactive approach, we can prevent the need for drastic measures like teacher layoffs, school closures, or tax increases.

Conclusion: A Better Future through Responsible Leadership

While the decisions made in 2011 and 2014 to issue Capital Appreciation Bonds were misguided, we have the opportunity to chart a better path forward. By taking proactive steps today—building reserves, leveraging aid, cutting costs, engaging the community, and planning for the long term—we can protect our schools, students, and taxpayers from the severe financial repercussions that loom in the future.

As your representative on the PYLUSD School Board, I am committed to responsible financial stewardship. We can ensure that future generations inherit a district that is financially sound and focused on providing high-quality education, not weighed down by unnecessary debt.

"DISCLAIMER: This information is written by Ryan Miller, candidate for the PYLUSD School Board. It is published by the Miller for School Board Campaign Team and is not funded by any candidate or candidate's committee, with no associated costs."