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School Bond Financiers Collected over $1.3 million in Fees

Three financial firms each contributed $25,000 to pass Measure C in 2004, then split over $1.3 million in fees. (File Photo)

Three financial firms each contributed $25,000 to pass Measure C in 2004, then split over $1.3 million in fees. (File Photo)

Three financial firms enjoyed a healthy return on their campaign contributions to pass Alameda Unified School District’s (AUSD) facility bonds in 2004, documents obtained by Action Alameda News show.

California Financial Services, UBS Securities and Piper Jaffray each contributed $25,000 to the Pro-Measure C campaign in 2004 to pass a bond measure that raised $63 million in property taxes to fix Alameda schools.

So-called “cost of issuance” documents obtained through a public records request show that California Financial Services was paid $680,000 from the proceeds of the bonds, and UBS Securities and Piper Jaffray were paid $673,251 in commission as an “underwriter’s discount,” in Wall Street parlance.

The two payments total $1,353,251.

California Financial Services acted as a financial advisor to the school district on the bond issue; the same documents show that the advisory firm asked representatives at Tramutola Advisors, a local political consulting outfit, to provide comment on the draft tax rate statement that accompanied the information provided to voters about the tax ballot measure.

The $63 million borrowed through the bond issue translated into $175,914,459 in principal and interest owed, with payments extending into 2036, due to the use of capital appreciation bonds, which defer principal re-payment, typically for 10 years or more.

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