Uploaded: Mon, Jun 25, 2012, 4:18 pm
SRVUSD refinances bond, saves homeowners $17 million
The San Ramon Valley Unified School District recently refinanced and restructured its Measure A general obligation bond, a move projected to save property owners more than $17 million in taxes.
Used to repair and upgrade aging facilities throughout the district, the $167.9 million bond series was passed in 2002; residents currently pay $44.80 per $100,000 assessed home value each year. The refinancing of the bonds was authorized by the Board of Education at its May 22 meeting.
"Ten years ago, the community generously voted to support its schools by passing Measure A," said Superintendent Steven Enoch. "Taking advantage of the low interest rates and the district's favorable bond rating allowed us to generate considerable savings for property owners."
The interest rates on the outstanding bonds from the 2002 authorization ranged from 3.55 percent to 4.77 percent. The interest rates for the new bonds, issued on June 19, range from 0.52 percent to 3.14 percent, a difference that will save property owners a collective $17,002,379, or approximately $350 over the next 19 years.
Newly refinanced and restructured bonds will provide for a more stable annual payment and prevent spikes in yearly tax bills, said Community Relations Coordinator Terry Koehne. Rates would have gone up 20 percent over five years, creating confusion on tax bills, noted Assistant Superintendent Gary Black.
Prior to the bond sale, SRVUSD's bonds were rated by Standard and Poor's and Moody's, which provide credit ratings and research covering debt instruments and securities worldwide. Moody's assigned the District the rating of "Aa1" with a "stable" outlook. The rating of "Aa1" is the highest rating ever assigned to a California school district.
Standard & Poor's assigned the rating of "AA" with a "stable" outlook, and referenced the "high desirability of the district's educational services, and good financial performance demonstrated by the district's strong reserve levels."
As a result, the district could see significantly less borrowing costs on future obligations. Although it has made no official statement, the Board of Education may advocate for a facilities bond on the November 2012 ballot.
"(Restructuring) could have significant cost savings in the future if and when there ever was another series of bonds," said Black. "All the financial pieces aligned with those historical low rates."
Posted by Greg
a resident of Danville
on Jun 26, 2012 at 11:05 am
The lack of knowledge on school budgets is both discouraging and sad. The District made a decision to save the taxpayers money by taking advantage of reduced interest rates on its bonds. The cynical people who believe the District will take that savings and just spend it are dead wrong. The savings are from the property tax bills of the citizens and not from the District's budget. It is a true savings to the taxpayers. True, given the number of property owners in the Valley, the savings per house are relatively low. However, would the cynical ones on this forum have preferred the District not do it, since the per house savings are not that great? Or, would you have preferred to have the taxpayers save $17,000,000? I vote for saving the money, regardless of the amount per household.
The District is not spending General Fund money (read taxpayer money) on iPads. The vast majority of computers and iPads being used in classrooms is because of parent donations from individual parents, groups of parents, and foundations.
For those who automatically oppose a facility bond measure, they need to understand the need. Most states fund public education at huge levels compared to California. The SRVUSD gets about the same amount per child from the state as New York gave its schools in the late 1970's. When a school district in another state gets $20,000 or more per student, the District can afford to modernize, maintain and construct new schools using existing general fund revenue. California schools cannot due to the low funding levels. The updating of 25, 30 and 40 year old schools must happen with facility bond money. San Ramon Valley gets about $5,200 per student, while neighboring districts get as much as $10,500 per student in revenues per student. Most states fund schools at 300% the level of this school district. Next year, the state could cut additional support for schools and put San Ramon Valley as low as $4,700 per student. And yet, SRVUSD schools are rated some of the best in the state and nationally. Apparently for some that is not good enough.
The greatest thing one generation can give to another is the gift of education. This District has proven that it provides a high quality education in spite of being starved for money when compared to other districts within California and nationally. To also ask that schools be modernized out of the few dollars the District gets for education is impossible. So, the alternative is to either ask the taxpayeers to support facility bonds that help to keep the schools maintained, or let them fall into disrepair and fall further and further behind in terms of modern facilities, electrical systems, roofs, etc. Those who automatically oppose spending any money on schools would probably hate to live in a house built in 1915 (the opening of San Ramon Valley High) that had never been updated with electricity, indoor plumbing, etc. Schools are no different. With thousands of students using the classrooms and buildings every year, wear and tear is normal. Roofs have to be replaced, old leaky pipes need upgrading, etc. That is what a facility bond is all about.
Realtors in town tell us that the primary reason that the San Ramon Valley did not see the steep decline in property values compared to other communities in the county is the reputation and quality of the public schools. That requires investments. No one wants to pay more in taxes. However, when viewed as an investment in the future of the next generation, an investment in our own kids, and an investment that assures continued high property values in our communities, a small facility bond is a small price to pay.
I normally don't comment in these forums. However, I just couldn't let these comments pass without inserting my thoughts. I am on the school board and I am a fiscal conservative. I also support additional taxes to public agencies that have proven their abilities to use the taxpayers money wisely and effectively. By any reasonable measure, the SRVUSD had done just that. We negotiated with developers to save the taxpayers well over a billion dollars in the construction of new schools with no taxpayer funds (that includes the money to build the schools and the avoided interest payments on the bonds that were not issued). Our last facility bond money was spent to modernize dozens of school projects and the overall facility bond projects came in at or under budget and on time. The schools are ranked some of the highest in the state and nation academically, with 96% of our graduating seniors going on to colleges. By every reasonable measure, the District is meeting the needs and expectations of students, parents and taxpayers. I would expect reasonable people to support a facility bond if the District makes an appropriate case for why it is needed. I understand that some in this forum will oppose spending any money at any time for any reason on public education. However, I have faith that the reasonable majority will do what is right for the kids of this Valley. The icing on the cake will be the schools will continue to be viewed as great by those looking to move into the East Bay, and our property values will continue to be supported by the high quality reputation of our schools.
Sorry for being so long winded. Hopefully, this will help dispel some of the misconceptions and rumors.