The June 22, 2011 School Board Meeting included presentation of the Results of the First Bond Issuance for Measure I.
On November 7, 2010, voters approved Measure I, a school bond in the amount of $210 million. The proceeds from Measure I may only be used for the projects listed in the Measure.
Measure I authorizes a local property tax to pay the principal and interest costs of the bond issuances. The tax rate to voters will continue to mirror the rates of prior measures and will hold to the District’s promise to not exceed the highest rate of $0.1728 of the assessed value that occurred in 2003-04.
In May, the District issued its first set of bonds—$25 million in Direct Pay Qualified School Construction Bonds (QSCBs) under the American Recovery and Reinvestment Act of 2009 and $10 million in traditional tax-exempt general obligation bonds. This result is an improvement over what was outlined in the District’s original plan for Measure I, and was enabled by three factors: the District’s QSCB allocation, the District’s increased credit rating, and the restructuring of the Measure I issuance.
The District’s QSCB allocation: Savings of Approximately $10 million
The benefit of a QSCB allocation is that the U.S. Treasury will pay a subsidy to the District to offset a significant portion of the interest on the QSCB-portion of any bond issuance.[*]
The increase in the District’s credit rating: Savings of Approximately $1.2 million
As a result of its good financial stewardship and its sizable ending fund balance, Standard & Poor’s upgraded the District’s credit rating from “A+” to “AA-”. This improvement means that the interest rate, and thus interest payments, on the District’s bonds was lower than it otherwise would have been.
The District restructured the Measure I issuances: Savings of Approximately $1 million
The District was able to issue $35 million instead of the originally-planned $30 million. As a result, the District is able to start certain projects sooner than originally planned, which will generate savings from less inflation costs.
Total Estimated Savings: $12.2 million
These savings, which are spread out over 25 years, are estimates and are based on the judgment and experience of District staff and the District’s financial consultant. They are intended to provide a general sense of what savings resulted from District efforts.
V. Resources: Generate and equitably allocate resources for programs and services that enable every student to succeed.