In the $105 million bond deal, taxpayers in the Poway school district were promised that there would be no tax increases for 40 years. The district was already on the radar screen because the tax revenue it was getting was being eaten up by old loans at those whopping 12.6% interest rates.

But now, the school district doesn't have to pay interest or principal on the bond for 20 years - leaving a $982 million bill for taxpayers at the back end.
The underwriters for the nearly $1 billion Poway bond deal, Stone & Youngberg, a unit of Stifel Nicolaus, and financial advisor Dolinka Group of Irvine, Calif., will get a sweet $1.4 million in total fees.

Citigroup (C), Goldman Sachs (GS), Bank of America/Merrill Lynch (BAC), among others, will split a cool $2.1 million on San Diego's $164 million bond where taxpayers will eventually pay a billion dollars, Farrell notes.

Meanwhile, San Diego County school superintendents, presidents and administrators make a lot of money. More than a dozen average $227,000 in compensation as of 2010, latest data available. The superintendent of the San Diego County Office of Education earned more than $286,000 in base pay that fiscal year.

Poway, home to more than 34,000 students, is also a school district where school administrator and teacher compensation chew up 85% of its annual budget. And its expenses chronically exceed revenues, by nearly $40 million from 2009 to 2011.

In two decades' time, taxpayers in the Poway district will have to start paying about $50 million a year towards the loan - one-fifth of its current $250 million budget. However, right now, the district only receives about $11 million a year from homeowners towards paying off its bonds.

One estimate says the total assessed value of property within the taxed area would have to quadruple just to cover the eventual $1 billion bill for this one bond alone.