Letter to the editor: Vote for the candidate against supporting Certificates of Participation

Just when we thought the tax and spend saga of the Matanuska Borough and the Matanuska-Susitna School Board could not get beyond “the solution to everything is just more money, please, give us money!,” cry that comes with every bond proposal, now comes the Certificate of Participation scam to thwart the People’s right to determine if they can afford a new monument to architects and politicians.

Mat-Su Borough Resolution 18-003 adopted 21 Feb., 2018 demonstrates the audacity of the bureaucrats’ greed. The resolution states “. . . Certificate of Participation (COPS) could be issued by the Borough as a long-term debt instrument to assist the District in securing permanent facilities for: Mat-Su Central, school bus terminal(s), American Charter Academy, Birchtree Charter, and Midnight Sun Family Learning Center . . . COPS are considered lease-purchase agreements that can be structured such that securities can be issued and marketed to investors in a manner similar to tax-exempt debt . . . unlike general obligation bonds, COPS are not secured by the full faith and credit of the Borough and additional taxes would not need to be levied to repay these obligations . . . District funds . . . would be used to repay these debts.”

I wonder just whose money the Mat-Su School District thinks they are repaying the Certificate of Participation with? It is the Borough that would sign off on the Certificate of Participation. Meaning the tax payer is obligated in the end. Further, the audacity of the Mat-Su School Board to suggest a funding mechanism to avoid the voters’ approval is very disturbing.

What is not stated in the resolution, is who pays the staffing, the ongoing maintenance, and other costs of a new facility? The cost does not stop with the Certificate of Participation. This additional cost is why we vote on bonding debt. We are acting with our eyes open, as we are not just approving the building construction, but agreeing to the staffing cost, the maintenance and the other ongoing costs associated with a facility.

A Certificate of Participation bypasses the voter entirely, giving the school board and the Borough Assembly the ability to spend without one word to the public.

In its resolution, the Mat-Su School Board implies that the District will not own the property to be encumbered by the Certificate of Participation. If this is indeed a lease purchase, the holders of the Certificate of Participation own the property until repaid by the District (read taxpayer). What is not stated is what happens if the economy takes a nose dive?

In the case of the Certificate of Participation, the taxpayer is still left holding the proverbial bag, if the school or whatever is abandoned or underutilized due to an economic downturn. Someone has to pay, and the Borough gets its money from the taxpayer. For the undisclosed investor, this is a pretty good deal.

With a bond vote, We the People would have signed on for the repayment with our vote or refused the bond and the debt, if we felt we could not afford the cost. In the case of a Certificate of Participation project, we may not even know that the Borough obligated us for repayment.

There appears to be no transparency to the financing of the Certificate of Participation. This raises the specter of conflict of interest, ethics issues, the legality of the Certificate of Participation and repayment of the debt, should there be an economic downturn.

If the Borough and school district are so strapped for cash, maybe the Borough needs to look at selling off some of the land it has accrued over the years?

Unfortunately, there has already been at least one fire station paid for using a Certificate of Participation.

Seeking ways to avoid the Peoples’ vote is not a good attitude to have in our public officials during good times or bad.

The purpose of the Certificate of Participation is to “. . . circumvent restrictions that might exist on the amount of debt . . . “ government is authorized to take on. Which is exactly why we have a vote on bonding, to limit the amount of debt, if need be. (Wikipedia)

At least one candidate is running for school board who is against the school district supporting Certificates of Participation. That candidate is Tom Bergey.

Please vote on October 2nd.

Larry Wood,

Palmer