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HMG-CN INVESTIGATION: Did Bassett Unified and ‘Megataxers’ Commit Bond Fraud?

 

 

 

 

 

bassett unified

July 28, 2021

BY JONESY SMITH, THE IRISHMAN, AND BRIAN HEWS

In 2006, students from local communities, prompted by the release of the Edward James Olmos’ film Walkout, the story of the Chicano Blowouts, marched from the city of Pico Rivera to Montebello High.  They lowered the flag of the United States and raised the standard of Mexico.  They turned the red, white and blue upside down and flew Old Glory underneath.  This nation can take demonstrations and protests for a good cause.  Civil disobedience without violence is admirable and tolerable.  Just ask Martin Luther King.

Students from Bassett Unified did not join the march.  Most of the schools were in “program improvement,” meaning they were close to failing.

From 2007 on, Paul Solano guided the District to make improvements under the banner of education.  A line of superintendents followed, including James Ballard, who resigned in 2010.

Ballard was replaced by Martin Galindo, who raised test scores but resigned three years later in 2013, moving to El Rancho Unified School District in Pico Rivera.

The superintendents were given huge salaries $220,000; nearly $300,000 after all the bells and whistles are added on.

Jose Reynoso was hired in 2016; he did not last long.  The suicide of Jenifer Lenihan, allegedly based on administrative abuse and bullying, ended his career.  Deputy Superintendent Alex Rojas took over and stayed until May of 2017.

At that time, the Board engaged Luis Rojas and his construction management firm, Del Terra.  Interestingly, the Board also hired Fairbank, Maslin, Maullin, Metz & Associates, Inc. and paid them nearly $24,000 to frame the next ballot question in January 2018.

Fairbanks is known as FM3; they are the experts, part of the Megataxers that schmooze school district boards.

FM3 promotes nothing but taxation; according to their website they, “helped secure voter approval for a total of 123 bond measures for California K-12 public school districts with a combined total of approximately $46.8 billion.”

Did they say $46.8 billion?  Is that with or without Tax Rate Statements?

If without, the overall cost to local residents would be closer to $100 billion.

FM3 noted that “Assembly Bill 195 mandates that ballot details for local bonds include precise figures about authorization amount and the rate and duration of the resulting property tax increase.”

AB 195 language is the kind of information that should be displayed prominently while the tax measure is in the process of passing, and has a major effect on the bond’s viability.

FM3 set the Megataxing spin machine in motion advising BUSD to, “identify ballot language for the District’s bond that complies with AB-195 while simultaneously maximizing its public support and electoral viability.”

Under Superintendent Art Cunha, and the guidance of FM3, the Board made their move.  In November of 2019,  they passed Resolution 06-20 to approve $50 Million in school bonds at a cost to taxpayers of $96 Million.

The Clerk had prepared the date and bond documents for the primary election in March of 2020; the pandemic put that on hold, so the Board decided to place the tax measure on the ballot in November of 2020.

But they forgot to change the date from March to November on the documents;  the measure languished for months.

Can Districts Refinance Bonds?

While Proposition 39 allows 55%  of voters to approve a tax measure for school and community college districts, the Constitution provides taxation only “for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of school facilities.”

In the BUSD Resolution, the Board asserted they were “authorized to order elections within the District for the purposes of considering bond measures to finance and refinance the ongoing capital improvement needs of the District, pursuant to the State Constitution and the California Education Code.”

The Board was desperate, they formally recognized the sale of bonds as subject to the California Education Code, specifically, the Strict Accountability in Local School Bond Construction Act of 2000, Education Code Section 15264.

Altered Documents

BUSD officials subsequently noticed that Resolution 06-20 did not match the November 2020 election.

So they altered it to place the tax measure on the ballot.

HMG-CN obtained “Resolution 06-20__,” a resolution that looked like the original 06-20, but had an extra underline at the end. The documents showed the election date was altered from March to November, other pertinent information was altered, and most shockingly, the signature line was altered.

Dolores Rivera, former President and now Member of the Board, delivered the altered document to the County. Rivera and Paul Solano certified that the Resolution “is a full, true and correct copy of the Resolution adopted by said Board of Education on the 12th day of November 2019.”

They had started their illegal quest to get their $50 million.

 

 

THE ALTERED Resolution 06_20_ signature page. Normally the “Certified a True Copy” signature line is executed by the Clerk of the Board who at the time was Armando Barajas. But the document was altered to accommodate Board Member Paul Solano as a Board Member.

 

Altered the Ballot Measure

Resolution 06-20_, under Accountability Measures, provided that, “in the event the full text of the bond proposition is not reprinted in the voter information ballot in its entirety, the Registrar is hereby requested to include the following statement in the ballot in compliance with the Education Code:

“If Measure __ is approved, the Board of Education of the Bassett Unified School District will appoint a citizens’ oversight committee and conduct annual independent audits to assure that bond funds are spent only on the construction, reconstruction, rehabilitation, or replacement of school  facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities, and for no other purposes.”

 But officials had no intention complying with the Education Code, starting the full text of the ballot measure with an “Abbreviation of Bond Proposition” noting, “the following to appear on the ballot.”  The ballot label and question stated:

“BASSETT SCHOOLS SAFETY, COLLEGE/CAREER READINESS MEASURE.” To improve school facilities, by replacing leaky roofs, improving access to technology, repairing and upgrading security/fire/earthquake systems, modernizing, acquiring, constructing, repairing classroom, restrooms, and facilities, shall Bassett Unified School District issue $50 million of bonds, within legal interest rates, averaging $2.66 million annually for 36 years (estimated), at projected rate of 6 cents per $100 of assessed value while bond are outstanding, be adopted, with all funds staying local.”

California’s Education Code requires that the actual ballot, not the sample ballot, contain a statement that, “the board will appoint a citizens’ oversight committee and conduct annual independent audits to assure that funds are spent only on school and classroom improvements and for no other purpose.”

BUSD spent nearly $25,000 to construct a non-compliant ballot label.  Not a word about citizens oversight or audits.

They had followed FM3’s advice to, “identify ballot language for the District’s bond that complies with AB-195 while simultaneously maximizing its public support and electoral viability.”

But BUSD failed to provide timely notice of the election to the public as required by law, which could lead to a public challenge.

HMG-CN has obtained backdated and counterfeit “official documents” delivered to the County Registrar by Dolores Rivera on August 7, 2020, which triggered the scheduling of the bond on the November 2020 ballot.

In addition, the entire BUSD bond debt had caused another problem; the bonded indebtedness limit, which, by law, caps out at 2.5% of the taxable property of the District.

In the official documents, the Resolution advised the public that, “the Board determined that it will be necessary to submit a waiver request to the State Board of Education to waive the bonded indebtedness limit of 2.5%.”

Translation: BUSD has hit their bond debt ceiling and they needed to raise it.

The Board did this under the radar, unknown to residents, requesting a massive .06% increase in the limit from 2.5% to 3.1%, and they were successful.

They were also successful in placing the tax on the ballot, calling it Measure BB, but the investigation could not identify who qualified the measure.

Without a single penny spent to support the measure, it passed 70%-30%.

This, as you will see, is extraordinary.  Never underestimate the ability of the Megataxers to operate covertly.

And sometimes even the County helps.

 

 

 

 

 

 

 

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