There is often much misunderstanding and controversy surrounding the issuance of facility bonds by local school districts. The recent flap over Capital Appreciation Bonds is one of them, but completely ignored is a real cost added on to taxpayers by rating agencies who either don’t understand, or choose to ignore, how they work.
As background, if a school district issues local general obligation bonds (which must be placed on the ballot by the school board and then approved by local voters), these bonds are funded by an additional tax levy on property owners; this tax pays the interest and principal costs of these bonds over their life. Typically, this is an “ad valorem” tax, meaning the tax levied to pay debt service in any given year is based on real estate values (generally annual debt service divided by assessed values in that year). Each property owner pays an equal percentage tax tacked onto their annual property tax bills. So, effectively the bond debt service is collateralized by the property tax stream from the property owners. This is in contrast to a standard municipal bond where the issuing agency (the one receiving the proceeds) is the same as the one servicing the bond debt.
Like any financial instrument, the cost (interest in the case of bonds) is determined by the market. While investors generally conduct internal credit analysis, the bond market still relies on rating agencies, such as Standard & Poor’s (S&P) and Moody’s, to assign a rating to each bond issuance. For S&P, these ratings go from AAA all the way to D, with gradations along the way (AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-, etc.). The lower the rating, the higher the interest cost, on the theory that a lower rated bond has a higher likelihood of default and therefore must compensate investors with a higher return to accept that higher risk. For all bond issuers, public and private, getting a strong bond rating is key to keeping costs down.
When a school district issues general obligation bonds, it also goes to an agency like S&P to get a rating. As it does for other issuers, S&P rates the creditworthiness of the issuer on four key factors — the health of the local economy (which includes the tax base), the finances of the district, the management of the district, and the indebtedness of the district. The problem, however, is that three of these four criteria actually have nothing to do with the credit worthiness of the bonds. As school bond debt service is paid by property owners (unlike standard municipal bonds), the financial health of the district isn’t relevant at all. Even if our school district ceased to exist tomorrow, all of our bonds issued would still be paid off with no risk of default because the debt service isn’t coming from the district — it’s coming from property owners! The only possible scenario where these bonds could default would be if every property owner in the district declared bankruptcy, and did it simultaneously! Because even if the town were hit with a severe recession or if a substantial number of citizens moved away, the burden of debt service would just shift to the remaining taxpayers (who would then each pay a higher percentage ad valorem tax rate). In practice, the only conceivable — albeit farfetched — scenario to have a bond default would be some natural disaster where overnight our town literally ceased to exist!
It may be too easy to assume that this ignorance by the rating agencies is just laziness, but I would suggest this standardized approach is rather simply self-serving — the rating agencies generate business by doing this “research” on each local district when in reality no such research is necessary, because any objective analysis would conclude that all school bonds of this sort must be AAA rated almost by definition. This “rating deflation” costs taxpayers and districts real money — districts get reduced bonding capacity (given tax rate limits, a district can issue less bonds) and/or taxpayers pay more interest for no reason. For example, our district was rated AA- for its recent bond issuance, which is considered fairly strong by current methods. But even that three-step distance from a AAA rating can mean a difference of 0.35%, so for every $100 million in bonds outstanding, the taxpayers are burdened with an extra $350,000 per year (and of course, much more for districts with lower ratings).
Some bond attorneys argue that S&P has concerns about a theoretical situation where a district goes bankrupt and then looks to “sweep” money from the dedicated debt service account for general fund purposes. As this has never actually happened and is even against the law in this state, it’s a better assumption that keeping the status quo is just in the rating agencies’ self-interest. What incentive do they have to change a system so as to minimize or eliminate their “value-add”? Perhaps there are two conclusions here: (1) school bonds are probably one of the best debt instruments an investor can make given the relatively higher interest rate with no higher risk, and (2) in the absence of the rating agencies doing the right thing, maybe a state policy change can mitigate this long-standing, monopolistic power that is surreptitiously issuing an additional tax on most of our citizens.
At last night’s School Board meeting, the Board voted 4-1 to keep the Charter Learning Center (CLC) on the Tierra Linda campus. I was the dissenting vote. Although I think re-locating CLC to the Heather School campus would have been the more optimal solution, I’m glad that the decision is made and we can move on. As I said last night, despite the relative angst generated by this question, the truth is both of these solutions will work out fine for students, teachers, and for all of the schools involved. I had just felt that moving the school to Heather would have been a more efficient use of our land, would have given us greater future flexibility for growth, and would better disperse traffic throughout the city. My colleagues did not give as much of a weight to these arguments, and all cited the specific preference by CLC to stay on its current campus.
In the grand scheme of things, this is the last piece of the puzzle that defined how we move forward on our Facilities Master Plan. And of course, this decision faced by the School Board was the result of the City Council’s inability to bring to the voters the proposition to swap land to have a new site on Crestview for CLC — that would have been better for both the school district as well as all San Carlans for for many reasons. So, despite the fact that CLC won’t be either in the optimal location (Crestview) or in what I think was the better back-up location (Heather), the decision allows us to move forward in what is, overall, an incredible plan for the school district and its students. We will have two new 4th-5th grade schools on each of the Central and TL campuses (built for 21st century learning), and we will relieve overcrowding at all of the elementary schools.
The default assumption has been that CLC would move to the upper part of the TL campus and the new 4-5 school would be where CLC is now. But in our upcoming board meetings, we will look at specific plans which could include an alternate configuration of leaving CLC in its current location and building the 4-5 in the lower section of campus.
Now, the main challenge will be traffic mitigation measures on the Alameda/Club/Dartmouth corridor. As our enrollment grows as does the enrollment of nearby Carlmont High School, there will need to be a fair bit of work on safety and traffic mitigation measures. There is a committee of four government agencies that has been working on some recommendations, so we will likely hear about that soon. Also, the District may need to consider re-locating some of the other facilities on the TL campus, including the Montessori school as well as the bus transportation yard.
School Board service is a funny thing. On the one hand, most recognize that my colleagues and I volunteer thousands of hours for no purpose other than to do the best thing for students. We have no other agenda — we have no political donors or parties to serve and no political career to protect. For me, it still a shining example of a representative democracy. And of course, we have a staff (from the Superintendent on down) who work for this public entity clearly not for the dazzling pay but for their devotion to children and their education. The work done by our leadership in this District is nothing short of groundbreaking.
But every once in a while (and fortunately not very often), people forget this dynamic and somehow imprint their view of politicians in general onto us, and in doing so engage in shockingly negative and downright mean behavior. Such was the case in the board’s discussion last night around the District’s approach to after-school programs. Unfortunately, the frenzy was kicked off by our current vendor, San Carlos/Belmont After School Program (SCBASP), who has been providing after-school programs for decades at some of our school sites. It has always been known by the District that students and families have been generally happy with SCBASP’s program, but the District has been reviewing all partnerships in the context of strengthening programs for kids, best aligning such programs with our overall Strategic Plan (where the goal is very clearly to better integrate all programs throughout the day), and examining financial alternatives given our continued poor funding from the state. Seeing an agenda item for yesterday’s board meeting, SCBASP sent out an alarmist e-mail full of half-truths to the families they serve, who in turn flooded us with e-mails and attended last night’s board meeting. I understand that parents were working with incomplete information, but it demonstrated something about social psychology that so many were willing to jump to conclusions without getting all of the information. I’m glad that many attended last night’s meeting so folks could hear what is really going on (which is the fact that under no circumstances would the after-school program go away — it was question of whether the District should consider “in-sourcing” it). And although some e-mails we received we only asking for more information, the far majority just parroted what they had heard and many went further as to sling insults at the Board at the District.
It saddened me to see members of our community act in this way, and it didn’t stop with the e-mails. Last night’s meeting demonstrated some of the rudest behavior I have seen at our meetings. Last night I tried to remind folks that if their goal is to influence policy, then insulting the policy makers is generally not a winning approach. Board members were constantly interrupted by some members of the audience and ignored the Board President’s plea for civility. It was an ironic lesson for our students in how not to behave.
I don’t know what the outcome will be for this particular decision, but I do know a few things. I am confident that our staff and Board will have an honest and thoughtful discussion and analysis around the issue, taking into account all dimensions of it and always keeping the quality of programs for our children as the prime consideration. I encourage SCBASP to join our ensemble of partners who have worked so hard to find collaborative solutions with the District and not work at odds with it, and I encourage parents to gain this perspective. Please remember that it is constructive engagement which influences.
At last night’s board meeting, we received an update on the District’s proposal for handling Common Core math implementation in the San Carlos School District. I wrote a detailed summary of our prior meeting in April where we went through some of the options and understood a bit better the approach behind Common Core. The big takeaways from that meeting included: (a) Common Core math is a much richer set of standards with an aim to significantly deepen students’ conceptual understanding of mathematics; (b) Common Core rethinks the sequence of when certain concepts are taught and blows up the boxes between what we formerly called certain areas of math, like Algebra, Geometry, etc. — in other words, certain parts of these “higher-level” math courses are actually taught a lot earlier than before; and (c) this is a very complex, multi-layered issue that has required extensive work by our math teachers and administrators, in collaboration with their high school counterparts. Because of all this, it is extremely difficult to compare our current offerings to the Common Core offerings. Some high schools for example, have embraced an “integrated” approach where they even remove the historical labels (Algebra, Geometry, etc.) altogether, and even though the Sequoia Union High School District is implementing Common Core, they are keeping a “traditional” nomenclature and sequencing.
As one could imagine, there is a fair bit of confusion and angst around this change, both because of the lack of comparability to the past as well our lack of history and data about what will best work for students. The District has continued to work hard on this issue and has had lots of community input (including at a meeting on May 7). Based on all of this, the Board received a more specific proposal last night, and I applaud the District staff for all of the hard work and for coming up with solutions that address so many of the needs and concerns.
My observation here is that there has been a healthy tension between parents who largely appear to be most concerned (and understandably so) about whether their kids will be challenged enough and educators who worry that the new deeper Common Core curriculum will actually be much more difficult and that we risk making inappropriate placement decisions if we use the same framework as before, e.g. “my child must take Algebra (or Geometry) by 8th grade.” Both of these perspectives are valid, and we must recognize that this is in the context of much uncertainty — all being new, we have no experience or data to inform decisions on placements of students and pacing of offerings.
So, to address all this, the District is proposing a broad set of offerings, with a number of different “paces” to find an appropriate one for each student. Although there has been some concern over the last few months by many parents that we wouldn’t any more be offering an “accelerated” class for 6th graders and/or a Geometry class for 8th graders, these options will indeed remain open. You can see the entire presentation from last night’s meeting, but the most relevant new piece of information was slide 5 (click on the image to enlarge):
These three “paces” should accommodate almost all of our students, but we will must recognize that each class is still more advanced than its counterpart in the past. For example, being proficient in Common Core Geometry as an 8th grader should be much more difficult than it is even now, so although there is no way to predict the percentage of the student body that will fall into each of these paths, the educators are saying they think this “3 year pace” may be reserved for a very small number of students.
The next step is for the middle schools to develop their schedule for next year and look at student placements. Parents will be hearing soon about the placement process for next year. But given that we will be in a transition period for the next few years, we must recognize that we will make mistakes in placement. So, the Board consensus last night was that we need to build in extra flexibility and fluidity into the system so that we can accommodate (and indeed, even expect) the movement of students from one “pace” to another, either from year-to-year or within a given year. Also, we must ensure that there will be frequent communication throughout the year with individual parents to best understand how their student is doing in the current placement and also provide the appropriate level of support for each child during any change.
In general, these changes are all very exciting, but they will certainly produce some anxiety (particularly among parents) as it moves forward. Perhaps in three to five years these issues will be moot as we will have the experience and the data to be certain in our offerings and student placements, but for now we will work forward in partnership between our dedicated educators and families.
As many of you know, next year our school district (along with every other in the state) will be fully implementing the new Common Core State Standards (CCSS) in language arts and mathematics. These new standards are designed to be fewer, deeper, and to better promote critical thinking and conceptual understanding. (The San Mateo County School Boards Association recently published a white paper reviewing the history of CCSS development and the benefits it will bring to public education.) Our district has embraced CCSS, and we have invested heavily in professional development for our staff around pedagogy based on these standards. Also, we are implementing the Smarter Balanced Assessments (SBAC), meant to gauge students’ progress on these standards (most parents may know that this is a “practice” year for SBAC where scores do not count, and these tests started in our schools last week). Most educators’ view is that CCSS is a marked improvement over the current “mile wide and inch deep” standards currently in use in California. If you’re interested in learning more about common core, I recommend this video which does a good job laying out the changes and the benefits.
One of the big complexities here is in the implementation of, and transition to, CCSS, specifically with respect to mathematics. CCSS creates pathways that will seem very unfamiliar to all of us who went to school in this country. Just one year ago, we made a significant change in how we approach math in our school district. We had a number of years of data that suggested we were being too conservative in how many kids were accelerated into higher math classes, and we had different approaches in our two middle schools. We changed the policy to make higher math eligible for more students, and we aligned the approach between the schools, including bringing geometry “in-house” at Tierra Linda. However, what we didn’t know at the time was what would be included in the general “Common Core” math standards in each grade.
Through this past year, there has been a lot more clarity in the specifics around Common Core math offerings in both middle school and high school. In general, the Common Core math standards are much more rigorous than both the current standards as well as what we had expected them to be. At last night’s School Board meeting, we spent a long time on this topic, hearing presentations from David Foster from the Silicon Valley Mathematics Initiative (SVMI) as well as from our own staff (administrators and teachers) who have been working on this problem throughout the school year. Although most of this work has not been visible to parents and students, our math teachers have been working a great deal with their counterparts at other elementary school districts as well as teachers at the high schools, and area superintendents have also been continually collaborating on this transition. This is a very complicated, multi-layered issue which took us quite a bit of time to unwrap. I’ll try to outline the highlights.
To best understand how Common Core is approaching math, we should start with the options for high school. High schools in California were given the option of one of two approaches to the pathway for math courses — “traditional” or “integrated.” Both choices would include the deeper learning inherent in CCSS, but they take different approaches to sequencing. The traditional approach is just that — it maintains a path we’re all familiar with — Algebra, Geometry, Algebra 2, Trigonometry, Calculus, etc (or some combination of those). The integrated approach is one which breaks down the walls of those traditional classifications and creates a sequence of courses, each of which teaches concepts inherent in all of these subjects, e.g. there are “calculus” concepts that would be taught in 9th, 10th, and 11th grade as well. Experts in the field (including SVMI) highly recommend the integrated approach as it better aligns with the deeper standards inherent in CCSS and has proven to work better as evidenced by the experience of high-performing countries around the world (that is why some refer to the integrated approach as an “international” approach). Different school districts within California have taken different approaches, and indeed whole states across the nation have chosen different paths. Over the objection of many (including many of the county’s elementary school districts), the Sequoia Union High School District (to which most of our students will matriculate) has chosen the traditional path.
For SCSD, there are a few levels of complication. The first is that the current courses at each grade level are not as rigorous as their Common Core analog. (Although this a gross simplification and not entirely accurate, it seems useful to think of the equivalent Common Core math course for any respective grade as being roughly one-half of a year ahead of the historical standard course for that grade. What is really happening is that these new standards are better addressing core conceptual mathematical principles. This in theory will address the superficial treatment and mastery of these concepts that often only become apparent in later courses — including in science — when students are called upon to “make use” of math to solve real world problems. So, the Common Core courses are more “advanced” without per se being “ahead of” the current ones.). Secondly, we have students who are currently taking Algebra (both in 7th and 8th grade) as well as some 8th graders taking Geometry. Particularly for the 7th graders taking Algebra this year and for 6th graders who would have gone into Algebra next year under the current system, there is a transition period where we may need to offer classes not entirely consistent with CCSS for a short period of time and/or perhaps “catch students up” to a course they can take next year. Lastly, we have to align our placements with the paths in high school. Notwithstanding the high school district’s choice of the traditional math pathway, there are still some adjustments and potential “compacting” that would need to happen, particularly to ensure that our higher-achieving students can have the option of taking calculus in high school. The presentation from last night’s meeting outlines some of the potential pathways through both middle school and high school (note that Carlmont and Sequoia will actually take different approaches to “compacting”).
So, there is still quite a bit of work to do, both with respect to the “transition” period over the next year or two as well as where we settle on the math offerings. For example, it’s very possible going forward we may offer only two course levels in 8th grade — “Common Core 8″ and “Common Core Algebra 1,” the latter being more advanced and richer than the algebra currently offered (note that in any case, we will offer Geometry next year for 7th grade students currently taking Algebra 1). But the board discussed two important concepts last night: (1) that we must provide support to students (identified by teachers) who need to “fill in the concept gap” between their current course and the following year’s accelerated course, and (2) we need to remain flexible in our future offerings, particularly for higher-achieving students. As this is still so new for all of us, we need a few years of data to better understand if we’re providing the right mix of classes and if we’re appropriately balancing being conservative or aggressive in the number of students at each level. Despite the changes in course names and sequences, what won’t change is the District’s overarching goal of creating the most appropriate path for each student and pushing each one to his/her potential.
The District will be communicating a lot more over the next couple of months about these pending changes. I encourage folks to read all correspondence on this topic and to attend any events that you can. The next local event will be Wednesday, May 7th at 7:00 PM in Mustang Hall at Central Middle School. This meeting will discuss the Common Core math progression and will include representatives from both Sequoia and Carlmont High School Math Departments. Bring all of your questions!
As parents and former students ourselves, we are inherently biased by our own experience with education, yet we are now entering an era where more and more things about our public schools will look very unfamiliar to us. This includes so many aspects of our Strategic Plan, our new 4th-5th grade schools, how we look at master scheduling, and certainly all of the curriculum changes inherent in the Common Core. I encourage everyone to embrace this unfamiliarity as symbols of real progress in a system that hasn’t changed much in a century. Despite all of the challenges and angst that will accompany this transitions (particularly with Common Core Mathematics), patience and persistence will ultimately yield great results for our students.