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SEC INVESTIGATION – RAMSEY IN HOT SEAT

Posted by xaviervir on August 15, 2014

The Security and Exchange Commission is investigating West Contra Costa’s School Bonds. Subpoenas have been served and the head of the school board, Charles Ramsey has been subpoenaed.

The following article appears in today’s West County Times:

HomeNewsStory

West Contra Costa school district to pay board president’s legal costs in investigation

By Theresa Harrington

Contra Costa Times

POSTED: 08/14/2014 05:12:23 PM PDT0 COMMENTS| UPDATED: ABOUT 8 HOURS AGO

RICHMOND — The West Contra Costa school board will pay to defend the board president in an investigation by the Securities and Exchange Commission related to financing for the district’s construction program.

Trustees voted in closed session Wednesday to pay legal costs for board President Charles Ramsey, who was subpoenaed Aug. 1 by the SEC, along with the district, county treasurer-tax collector, some members of the district’s financing team and some of its consultants and advisers.

The subpoenas were listed in a supplemental disclosure for the district’s sale of nearly $77.5 million in bonds through a negotiated refinancing deal that was finalized Wednesday.

“The district is aware that its board president, certain members of its financing team and some of its consultants and advisers also received subpoenas from the SEC,” the disclosure states. “The district is currently preparing its response to the subpoena. The district has not been advised by the SEC of the nature or scope of the investigation to which the subpoena relates and is unable to predict the outcome of such investigation.”

Ramsey referred specific questions to his attorneys, Amy Craig and his brother, Ismail Ramsey. His attorneys declined to comment about the investigation.

Since 1998, West County voters have approved six bonds worth $1.6 billion to finance the third-largest school construction program in the state, behind San Diego and Los Angeles. The district has issued about $1 billion, with nearly $600 million remaining.

The district subpoena requested documents relating to bonds issued from 2009 through 2013, and records related to current and proposed bond refinancing.

In June, the board approved a resolution authorizing its financial underwriters to refinance up to $100 million in previously issued bonds. In July, the board directed underwriters to only sell about $50 million and to hold off on the rest until next year or later. The underwriters sold $77.5 million in bonds at a lower rate. Ramsey said Thursday that despite the board’s direction, the underwriters had authorization under the resolution to sell more than $50 million if district goals were met.

The SEC characterized its investigation as a “nonpublic, fact-finding inquiry.” The commission’s enforcement division can recommend civil actions in federal court or before an administrative law judge and can impose sanctions, including fines, according to its website. It also works with other law enforcement agencies on criminal cases.

Ramsey said the subpoenas do not mean there is any wrongdoing

“It’s not an indictment, it’s just a request for records,” he said. “They’re not saying anybody’s guilty of anything or that they have a negative opinion of anybody.”

District resident Linda Ruiz-Lozito questions whether the district will continue paying legal costs for Ramsey after his term expires in November.

“Educational dollars shouldn’t be spent to defend school board members — especially if they have violated federal laws,” she said. “Is the district also going to be funding a defense for ‘certain members of its financing team and some of its consultant and advisers?'”

Trustee Todd Groves said it made sense for the board to pay Ramsey’s legal costs, which were not disclosed.

“I think that the district needs to represent its board members if they are in a position where they are under scrutiny related to what they’re doing for our district,” Groves said. “I think it would be a really discouraging situation if people see that they step up for service and end up having to defend themselves on their own dollar in relation to serving the public. It sends a very chilling message to potential candidates or anybody who serves.”

Theresa Harrington covers education. Contact her at 925-945-4764. Follow her atTwitter.com/tunedtotheresa.

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One Response to “SEC INVESTIGATION – RAMSEY IN HOT SEAT”

  1. Hi Xavier and San Pablo Residents,
    I don’t know how to contact you directly, Xavier, but I’d like you folks to know that I’m running for Director, West Contra Costa Healthcare District. I’m the only independent taxpayer advocate candidate. The other 3 ladies are all the same people who have run unopposed for some years’ now and are political insiders reporting to the administration and Dist. 1 Supervisor Gioia.

    Here is my candidate statement – I hope you’ll tell a friend and vote for me. There are 3 slots open for election and my goal is to win one of the three:
    _______________________________________________________________

    Candidate Statement for Marilynne L. Mellander, Candidate for Director West Contra Costa Healthcare District:

    I’ve owned a home in El Sobrante since 1978. My property taxes have more than quadrupled since that time.

    West Contra Costa Healthcare District (District) formed in 1954 to serve insured community residents. Doctors Medical Center (DMC) serves indigent and uninsured patients. However, District taxpayers have continued to fund what now operates as a County hospital. In spite of calls by property owners, the nurses union and now the Richmond City council to have the County absorb this hospital, Dist. 1 Supervisor Gioia insists this is not financially feasible.

    Regardless of what happens to DMC, District taxpayers will be saddled with debt for decades to come. The County has made three transfers of District taxpayer ad valorem taxes totaling $42.8 million without a public vote.

    Financial information is hard to come by but I found that:
    Our 2011 property tax was sold to investors in the form of Certificates of Participation to pay back the County
    Gemino Healthcare Financing receives over $50,000/month interest on a $7,400,000 loan; DMC administration gave them a lien on the hospital property to prevent foreclosure
    Hospital CEO Dawn Gideo receives $40,000/month salary
    A “stakeholder group” now meets in private to decide the fate of DMC
    There has never been citizen oversight on this District in spite of 2011 parcel tax ballot language. I believe citizen taxpayers are important “stakeholders” in all discussions to determine the future of DMC. If elected, I intend to represent the interests of District taxpayers.
    __________________________________________________________

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