In addition to her 18 years of volunteer service to our District, and her commitment to serving all of our students, stakeholder engagement, and balancing academic rigor and wellness, Amal is the only candidate with relevant financial skills. In her 18-year tenure at the University of California, she has been responsible for financial management, reporting, and operations. In her current role as Associate Dean for Financial Affairs at the UCSF School of Medicine, she leads a team responsible for budgeting, reporting, and planning for a $2+ Billion enterprise. She understands state funding for education, accounting reporting requirements, compliance and controls issues, and the realities of balancing competing needs with limited resources.

In 2017, the opportunity to refund the Capital Appreciation Bonds (CABs) was presented to the board by the District’s financial advisors, KNN, and not at the urging or advice of anyone in this community. Amal, along with the rest of the board, voted to refund these bonds prior to January 1, 2018, saving taxpayers $26.1 million. Amal and the board chose to act because advice from KNN indicated that there was pending national legislation that would remove the District’s ability to refund the CABs (which did, in fact, pass) and that the likelihood of rising interest rates would impact potential savings.

We support Amal because of her strong financial skills, as well as her practical wisdom and reasoned approach to all issues that are brought before the board. Please join us in voting to re-elect Amal to our school board. She’s already demonstrated that she has what it takes to serve our community.

By Dana & Mike Serleth, Piedmont Residents

The two most critical issues facing our school district are managing the budget, and teacher recruitment and retention. Two candidates have the professional expertise and personal experience to address these issues:

As Associate Dean of Financial Affairs for the UCSF medical school, Amal Smith has extensive experience managing budgets in a complex educational environment with government regulations and many stakeholders. With her tenure at the Piedmont Education Foundation including as President, Amal has a strong record of working with multiple parent constituencies to balance, fund and support the wide range of Piedmont student interests and needs from kindergarten through 12^th grade.

Megan Pillsbury, a long-time educator and PUSD teacher, has the training, classroom experience, and credibility to address teacher recruitment and retention given budget limitations. Megan knows the intangibles that influence whether a teacher loves their job or leaves: a supportive teaching environment, professional development and belonging to a community of valued teaching professionals. Megan also knows first-hand the importance of partnering with parents to create the best learning environment for their students.

Please join us in voting for Amal Smith and Megan Pillsbury for School Board.

Sincerely,

Chris & Katy Ford, Piedmont Residents

The historical record demonstrates that Hari Titan is not spreading falsehoods (nor widely).  While I’ll refuse to respond tit-for-tat to the semantical hair-splitting to which this debate has descended (and the careful use of ellipses to cloud the discussion), I firmly and confidently state that Hari’s positive influence on improving PUSD’s financial decision-making when it comes to bond financing, is neither a myth, nor false, nor exaggerated, nor can it be overstated.

The School Board may have fully understood that the financial impact of 2013’s Series E CAB sale was expected to be an incremental $18.8M in interest payments for Piedmont taxpayers and rationalized those excess costs as a ‘necessary evil’. However, denying responsibility for that decision by declaring that there was no opposition to it at the time is tantamount to deflecting culpability on the public (which was, indeed, ignorant about the significant trade-offs CABs entail, even if the School Board was not).

It is abundantly clear, and is supported by the historical record, that Hari Titan single-handedly (and unpopularly) discovered the use of CABs, dug in and did his homework to understand the long-term financial ramifications, and explained the issue clearly to the voting public.  It is also clear that once the public was aware of the use of this ‘creative’ financing mechanism, public opposition to the continuing or future use of CABs was broad-based, vocal, and vehement.  I admire Hari’s courage in vigorously waving the cautionary flag to prevent further sale of CABs*.

It is also obvious from the historical record that the School Board was open to considering continuing use of CABs in spite of this opposition.  CAB’s were presented as a financing option to refurbish the Alan Harvey theatre (the topic became moot when the bond proposition was not passed by voters**).

CABs remained in the School Board’s consideration set for use in the most recent $60M bond approval.  Board members rationalized keeping CABs ‘on the table’ as a financing vehicle because CABs provide the District  ‘flexibility’ to continue spending on construction projects while delaying payments on them (no downpayment!  0% financing!).  The fact that current and recent School Board members claim victory for deciding NOT to continue using CABs after 2013 belies the fact that the School Board may very well have utilized CABs as a financing instrument if it were not for the fierce opposition raised by Hari Titan’s public education on the subject and the consistent and vocal preference declared by many, many Piedmont parents, taxpayers and voters for the use of more classical, steady-handed, disciplined financing methods.

Hari will also receive my vote for PUSD’s School Board.

*It is germane to this point that shortly after the 2013 sale of CABs by PUSD, the CA legislature outlawed the sale of those same CABs to CA School Districts because the usurious rates charged on them had nearly, or actually, bankrupted many school districts state-wide who were similarly ham-strung by the Recession’s impact on school district finances.

**It is worth noting, for those unfamiliar with Measure H history, that Measure H, a $13-15M bond placement to refurbish Alan Harvey Theatre, was rejected by Piedmont voters, primarily due to the courageous communication and diligent research supplied by Hari Titan and Alicia Kalamas, which credibly questioned the District’s plan to renovate, rather than demolish and rebuild, PHS’s existing theatre.  Their time-consuming, competitive research provided local case-study evidence inferring that the proposed Alan Harvey Theatre project was projected to be excessively costly yet yield a facility with inferior amenities compared to the recent construction costs and designs of other Bay Area high school theaters.

Hope Salzer, Piedmont Resident

In Rick’s [Raushenbush] Piedmont Civic Association Oct 17, 2018 article he makes the following statements that I challenge or refute below. I copied and pasted his comments and have my own numbering. See his original opinion article for additional context.

1. 1. First, the District and the School Board clearly understood the difference between Current Interest Bonds (CIBs) and Capital Appreciation Bonds (CABs), as well as Qualified School Construction Bonds (QSCBs) and Bond Anticipation Notes (BANs). These financing mechanisms, their pros and cons, were discussed in public meetings back to 2006.

Very roughly speaking, CIBs reduce total interest payments by levying taxes at a higher rate to pay down the debt starting immediately, while CABs reduce the immediate tax rate at the cost of greater total interest payments by deferring repayment of the debt. — Rick Raushenbush 2018

1. Pursuant to statute, anticipated tax rates to repay bonds issued under Measure E were limited to $60 per $100,000 in assessed value. The District could not have sold CIBs to fund this work as the tax rate to repay the bonds would have exceeded the limit.
2. I do not recall anyone, including current School Board candidates, appearing before the School Board at the time to argue that Wildwood and Beach work should be deferred for years to reduce total interest payments.
3. Third, refinancing bonds to save money is not a new concept. Even before the CABs were sold, the Board and District anticipated re-financing them as soon as it was possible to do so (call dates were set as soon as feasible given market requirements)
4. Fourth, the School Board, well aware that CABs keep current tax rates lower only by increasing total interest payments, has chosen CIBs over CABs when available. In 2014, when proposing a bond measure to fix Alan Harvey Theater, the Board ruled out using CABs as the feasible tax rate supported the CIB option. No one on the Board was advocating CABs.
5. According to Minutes of the Nov. 8, 2017 meeting, however, “Hari Titan encouraged the Board to wait for at least a year on CAB refinancing.”

Rick Raushenbush never contacted me about his beliefs but my responses are below.

Hari Titan’s Responses

1. Rick did not produce any links to public discussions back in 2006. Although technically these discussions are open to the public most of the public is unaware of what they are about. His 2018 “roughly speaking” description is to this day overly simplified and misses key financial concepts, the absence of which mislead the public regarding the negative side of CABs. For example Rick does not mention any of the following: compound interest, negative amortization, balloon payments, above market interest rates, increasing debt, non-productive debt. I have been educating the public about these aspects which led to the vast majority of the public not wanting CABs.
2. In the October 11, 2017 meeting to refinance the 2013 CAB at H:M:S 1:35:16 – onwards, it is revealed that as long as there are savings to the public from a refinance, the new refinance can go over the prior $60/$100k AV limits. This was new information from district bond counsel that was not discussed (and likely not known) at the May 8, 2013 board meeting prior to issuing the 2013 CAB.
3. My proposal was not to defer the work and financing in 2013 but to use CIBs by getting a new voter authorization, see my article here. In the May 2013 board meeting, KNN Public Finance confirms that a new voter authorization would provide a new $60/$100k AV limit, see:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=916 Minute 1:06
4. Maintaining the no-refinance clause to 10-years per market demands for CABs is not the same thing as planning to do a refinance of the CABs. There is no record of board members actually stating their wish for refinancing the upcoming August 2013 CAB in their May 2013 board meeting:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=916 Check Minutes 0:44 – 1:07 . In fact, we did the 2017 refinance of the 2013 CAB before the 10-year no-refinance clause expired. Board members at the time did not balk at or comment on the high repayment multipliers from 4:1 to 5.6:1 and only CABs were on the table at that time.
5. Measure H had CABs as Option 1 even though there was no existing $60/$100k AV limitation. The board voluntarily put CABs on the table and then removed it in favor of CIBs. It shows that the board was not just putting CABs on the table because they thought they were forced to by Prop 39 but instead that they were relying on what I would say is a faulty presentation of present value arguments that don’t apply to taxpayers but apply to bond investors. Andrea Swenson invited KNN Public Finance and another community member to do the advocating for CABs. I was the only community member to oppose CABs at this meeting and a few earlier meetings. Here is the video to follow along with the proponents of CABs:http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=1042 see Minutes 2:00 – 2:41
6. The minutes of the meeting ignores that I changed my opinion in that meeting based on new information from KNN Public Finance. Here is a link to the actual video of the meeting: http://piedmont.granicus.com/MediaPlayer.php?view_id=3&clip_id=1688 Initially at minute 54 second 47 I say: “Even if the Fed dot plot is correct and the interest rates will go up 75 basis points next year, it may be well worth just waiting to see if that is really going to happen. We have a new Fed chairman who has made verbal statements to not increase rates…. we could wait and monitor interest rates.” However at minute 1:25, based on the new information provided by KNN I switch my recommendation to: “I’m with Cory given this new information… maybe the best thing for the community is to take action now and go with Option B… I would give a thumbs up if the board took action now.”

In summary, the Board in 2013 missed 2 approaches to avoiding the 2013 CAB. One approach was to get a new voter authorization and another approach was to consult with bond counsel and find out if a new voter authorization was even required.

Furthermore and consistent with the above video evidence, KNN Public Finance told me that they were not asked to run numbers for a CIB option in 2013 because the board was not interested in CIBs at that time.

The actual moment the $18.8 million was lost was at 1 hour and 6 minutes into the May 8, 2013 board meeting when KNN points out (in response to Tolles) that a new voter authorization would grant a new $60/$100k AV limitation. Nobody on the board asked if such a new voter authorization would allow CIBs back on the to table and what those savings would be.

Hari Titan, Candidate for Piedmont School Board

We have lived in this beautiful city of Piedmont for twenty years. As working professionals, we don’t have hundreds of hours to attend long board meetings and read dense financial reports filled with complex financial calculus.  That’s how Dr. Titan found out about the expensive financing schemes that did not improve the schools but cost taxpayers unnecessarily high interest charges.  We’re grateful to Dr. Titan, a father and mathematician, for devoting his time and interest on the finances of our schools since 2013.  He helped save us $26 million once and he might save an additional $26 million dollars!  Piedmonters will be well served with Dr. Titan on the School Board.

Sincerely,
Wayne Leong and Suzanna Chan, Piedmont Residents