Legal, financial experts warn Hillsborough School Board members to choose their words carefully

Financial experts warned how board members’ words can influence financial markets that hold the district’s debt.

10 Tampa Bay | by Eric Glasser | May 18, 2021

TAMPA, Fla. — As the Hillsborough School District grapples with its future financial challenges, board members got a strongly worded bit of advice Tuesday.

Experts essentially urged board members to watch what they say when they talk about district finances – not just as a matter of money but of federal law.

As the Hillsborough school district worked to avoid a state financial takeover, there was no shortage of blaming and badmouthing. Now, school board members are being advised to turn down the rhetoric.

“As things deteriorate, as conditions get worse, people place greater focus on what you say,” District Financial Advisor Jerry Ford told the board.

The district’s chief financial officer invited Ford and a lawyer specializing in finances, George Smith, to explain how board members’ words can influence financial markets that hold the district’s debt.

That includes bonds issued for past projects whose value can fluctuate based on the school district’s perceived soundness.

“We have taken a journey from being one of the two highest rated school districts in the state, by all three rating agencies, to being the lowest large school district in the state,” said Ford.

Members were warned they – and the board as a whole – could even be investigated for securities fraud based on questionable comments.

“If you’re making a statement and you’re talking about the financial conditions or the operational conditions, or the management conditions, or anything else about Hillsborough Schools that could be considered communications with the security market you could be subject to anti-fraud rules,” said Smith.

“You don’t have to cook the books,” he said. “You don’t have to change the numbers. If you were reckless then that could still be considered fraud.”

“Although we live in America and we have freedom of speech, every word and action that comes out of our mouth does have a consequence to it,” said Board Member Melissa Snively.

Some board members took offense to the notion.

National attention brought to the district’s financial woes wasn’t their doing, they said. Instead, they blamed Education Commissioner Richard Corcoran’s tersely worded letter threatening a state takeover.

“I personally think that the letter from the DOE was really negative,” said Board Member Nadia Combs. “I don’t see anything positive that came out of that.”

“Some folks took that as a negative,” said Ford. “Others took it as a positive and said hey, they are going to be forced into doing something that they might not otherwise be willing to do.”

There was no indication the district or any board members are currently under legal scrutiny. But financial experts warned perception matters. 

At some point, they said, Hillsborough schools will head back into the marketplace to raise money through bonds, and it could potentially be a lot more expensive if the district’s rating continues to suffer.