BEVERLY HILLS—Mayor John Mirisch has stated that the city council is against the acceleration of the issuance of the Measure E Bonds. He requested the Beverly Hills City Council to take a “position of non-support” against the aforementioned Measure E Bond.
Beverly Hills Mayor John Mirisch
The issue was discussed on Tuesday, July 16 at city hall at 7 p.m. at the council’s formal meeting. “The City Council does not support the acceleration of the issuance of additional Measure E bonds which would have the effect of increasing property tax rates until such time as the voters approve such acceleration through an advisory election or otherwise authorize the issuance of additional or replacement bonds. The City Council further urges the Board to rescind their direction to the
Board of Supervisors to adjust the tax rates for 2013-2014 until such time as the voters approve the upcoming new bond measure,” Mirisch stated.
The mayor was referring back to the vote on June 26, when the Beverly Hills School Board voted 4-1 to accelerate the payback rate of the $334 million Measure E bond. The School Board had initially approved the Measure E bond in November 2008 and the bond was supposed to raise $334 million through four series of bond sales between 2009 and 2018 in order to renovate and modernize the city’s five schools; Beverly Vista, El Rodeo, Hawthorne, Horace Mann and Beverly Hills High School.
In November 2008, the Beverly Hills Unified School District (BHUSD) Officials promised that the bond tax rate levied on residents would stay below $50 per $100,000 of assessed value; meaning that a home with an assessed value of supposedly $1 million would pay less than $500 annually for Measure E taxes.
However, the unstable market conditions and flat property tax values have dampened the ambitions of the BHUSD to raise $334 million by 2018 through the Measure E bond.
During Tuesday’s meeting, bond consultants hired by the BHUSD stated that the Measure E bond plan is not feasible because the assessed values of the
Beverly Hills properties turned out to be inflated, and they were based on assumptions that were bound to change. The initial assumptions made by the Measure E bond in 2008, were that the assessed value of the city property would rise perhaps by an average of 5.77 percent for 2009 through 2011 and then 4.5 percent from then on. City properties’ assessed values rose by a mere 1.75 percent from 2009 through 2011. Another issue is how the supposed interest rate of 5.5 percent on the bonds rose between 7 and 7.5 percent.
According to the Assistant Superintendent for Business Services Alex Cherniss, “The BHUSD is grappling with the same issues as many districts statewide that passed general obligation bonds [just before] the recession.”
Significant delays could be made to the BHUSD’s plans to renovate the schools, because market conditions would delay the next set of bond sales until the funds that are necessary to renovate the
Beverly Hills schools will be postponed until 2033.
This was why the acceleration of the Measure E bond issuances were brought up on June 26, because one of the ways to continue with the original plan would be to raise the bond tax rate for residents. However, Board members Jake Manaster, Myra Lurie and Brian Goldberg defied the plan of acceleration because it would mean going against a promise to voters that the taxes won’t be raised in 2008, at the time the Measure E bond was drafted.
The decision to accelerate the issuance rate of the Measure E could mean that it would raise property taxes up to $114 per $100,000 of assessed value for the 2013/14 year. That figure will be more than twice the current rate of $52 per $100,000 of assessed value that property owners now pay.
Board members approved a ballot measure that will allow voters to make a decision, as to whether they want to create a new bond that will replace Measure E.
On the future of the funding of the Beverly Hills Schools, Cherniss said that “our board of education, with input from stakeholders throughout the community, will need to work together to develop a [new] financial plan to upgrade our schools.”