School Districts Cannot Spend Bond Money on Projects Not Disclosed to Voters - School Bonds with 55 Percent Vote Threshold Must Contain a List of Specific Projects to be Funded

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The Fourth District Court of Appeal recently upheld a challenge to a school district’s spending voter-approved bond proceeds for field lighting at a high school stadium because the ballot proposition did not specifically list or otherwise include field lighting as a project to be funded by the bonds for that high school. As a result, the school district is prohibited from using the bond proceeds to fund the lighting improvements. Taxpayers for Accountable School Bond Spending v. San Diego Unified School District emphasizes the importance of ensuring that the project list included in a bond measure sufficiently identifies the improvements to be constructed with the bond proceeds.

In 2008 the San Diego Unified School District (SDUSD) submitted a school bond measure (Proposition S) to the voters. Proposition S contained a bond project list comprised of two parts. Part one allocated a specific amount of the bond proceeds to each school to be spent on qualified, permitted projects. Specific projects to be financed at all school sites included improvements “to support student health, safety, and security.” School site security improvements, “including increased lighting,” were identified as examples of these types of improvements. Part two identified specific projects to be completed at all school sites and at particular schools. Included in the specific list of projects for Hoover High School was the renovation and replacement of the school’s stadium bleachers and press box, and the upgrade of “fields, track, and courts for accessibility compliance.” Proposition S also authorized bond proceeds to be used for construction and other costs incidental to and necessary for completion of the listed projects. Other incidental costs necessary to complete the projects listed in the measure included athletic playing fields and “field lighting.”

SDUSD authorized the installation of new lighting for the Hoover High School stadium to be funded from a portion of the Proposition S bond proceeds. The use of the bond proceeds to fund the lighting improvements was challenged by the plaintiff, for among other reasons, that the stadium lighting improvements were not identified in the Proposition S project list for Hoover High School.

The Court of Appeal noted that the state constitution requires that a school bond that has a 55 percent vote threshold, such as Proposition S, must contain “a list of the specific school facilities projects to be funded.” School districts can seek bonds without such a list, but the bond measures face a higher vote threshold – at least two-thirds. The court held the Proposition S bond proceeds could not be used for the Hoover High School stadium field lighting because: (1) project list included the renovation of the stadium’s seating and press box, but did not expressly include lighting for the field; (2) the upgrade of the field was limited to improvements for accessibility compliance and lighting was not required for this purpose; and (3) field lighting was not incidental to or necessary for the completion of the renovation or replacement of the stadium bleachers or the press box.

For more information about this case or the impact that it may have on your school district, please contact your Best Best & Krieger attorney, Kelly J. Salt or an attorney in the firm’s Public Finance practice group.

Topics:  Bonds, Disclosure Requirements, Education Budget, Funding, Public Schools, School Districts

Published In: Civil Procedure Updates, Education Updates, Elections & Politics Updates, Finance & Banking Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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