Voters are pleased with the approval of the School District 9-R bond ballot measure, but staff’s actions leading up to approval raise concerns. The amount of projects 9-R wanted to build, through bonds, was significantly over the $90 million on the ballot measure.
So a bond sales company, Royal Bank of Canada, had multiple discussions with 9-R staff on the use of bond premiums, a way to secure financing well above the face value of the bonds. Hence, 9-R could secure funding well above what was publicly stated. The use of bond premiums is heavily scrutinized in California and critics in many states cite high fees, inflated interest rates and lack of transparency.
The 9-R finance director signed a letter agreement with RBC. Their letter proposed a fee related to the bond value, likely over $500,000, yet 9-R did not solicit bids for this service. RBC’s letter to 9-R stated they may make a contribution to the bond campaign.
The State of Colorado shows RBC did make a significant contribution to the bond campaign committee headed by the mother of the 9-R finance director. This seems like a quid pro quo and likely falls into a gray area for a campaign finance violation.
The SEC charged RBC for issuing high-risk bonds to a Wisconsin school district. We want 9-R to maintain public trust, which can be done with the 9-R Board or state conducting an investigation and then updating 9-R financial controls and ethics policies.
Dave PetersDurango
