Orange County Grand Jury • 2014-2015 • Agency Response
Response to: Irvine Unified School District

Mello-Roos: Perpetual Debt Accumulation and Tax Assessment Obligation*

Published: September 21, 2015 2 pages
Ver PDF original

Findings and Recommendations 3 findings

F1
There is a lack of transparency to homeowners relative to how CFD funds are being used. Response: The District disagrees wholly with this finding. As a public entity, actions of the District occur at open, publicly noticed Board meetings, which all community members are welcome to attend. Specifically, the Audit of CFD expenditures are included in the Irvine Unified School District's annual Audit and reviewed at an open, publicly noticed Board meeting each year. The annual Audit of the District is conducted by an independent public auditing firm.
Related Recommendations (1)
R1
Each local agency that established the CFD should create an oversight committee and an audit committee to provide for an independent, transparent view of the manner in which CFD funds are being expended. (F.1, F.2) Response: The recommendation will not be implemented because it is not warranted or reasonable for the reasons discussed below. As noted above, the District specifically retains consultants and designates District employees to maintain strong internal audit controls over the CFDs and special tax expenditures. Expenditures of CFD funds are audited annually and such audit is reviewed at an open, publicly noticed Board meeting each year. Each Board meeting allows for public comment, during which community members are welcome to voice their opinions and concerns to the Board. District records, unless non-disclosable, are available for public review. Thus, there is already ample opportunity for the public to review any and all CFD fund expenditures, to the same extent any committee could review such expenditures.
F2
There does not seem to be appropriate oversight and auditing of CFDs and special tax expenditures within the County of Orange. Response: The District disagrees wholly with this finding as it relates to the District. As noted above, as a public entity, actions of the District occur at open, publicly noticed Board meetings, which all community members are welcome to attend. Expenditures of CFD funds are audited and such audits are available for public review. Additionally, the District specifically retains consultants and designates District employees to maintain strong internal audit controls over the CFDs and special tax expenditures. Such oversight and auditing is in compliance with the law and appropriate.
Related Recommendations (1)
R2
Audit report information, as delineated in California Government Code, 1982 § 53343.1, should be made available to the CFD taxpayers on a website after each fiscal year for each CFD number. (F.1, F.2) Response: The recommendation will not be implemented because it is not warranted. Section 53343.1 of the California Government Code states that an Annual Report shall be provided if requested by a person who resides in or owns property in the District. The District is already in compliance with the requirements of Section 53343.1. If you have any further questions or need additional information, please contact John Fogarty at (949) 936-5035. Sincerely, July Terry L. Walker, Superintendent, Irvine Unified School District
F3
While the assumption is that the CFD debt would be repaid in a finite period of time, there is a mechanism available to controlling entities to extend debt obligations and thereby extend the CFD special tax in perpetuity. ..... BOARD OF EDUCATION PAUL BOKOTA / LAUREN BROOKS / IRA GLASKY / MICHAEL PARHAM / SHARON WALLIN TERRY L. WALKER, Superintendent of Schools JOHN FOGARTY, Assistant Superintendent, Business Services / BRIANNE FORD, Chief Technology Officer EAMONN O'DONOVAN, Assistant Superintendent, Human Resources / CASSIE PARHAM, Assistant Superintendent. Education Services IUSD . . . providing the highest quality educational experience we can envision. Response: The District disagrees wholly with this finding. All District CFD special taxes by their terms, have a termination date. The termination date cannot be extended without a vote of the electorate. Issuing bonds does not extend the term of the special tax.
No recommendations for this finding

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.