Visalia Unified to save $6M on first round of contentious school bonds

Some parents still unhappy with board’s vote in April to not use Measure A funds to build a fifth high school

VISALIA – It may be many years before Visalia residents trust the school district with another bond measure, but Visalia Unified does have a knack for saving tax payers money on the life of their bonds.

At its July 28 meeting, the Visalia Unified School District board was presented with the results from the sale of the first series of bonds from Measure A, the $105 million school bond approved by voters last November.

Matt Kolker with Government Financial Strategies, the firm in charge of the district’s bond sale, said the first $35 million in bonds were sold on June 25 and the district was able to take advantage of a volatile market when it was dripping in their favor. Moody’s gave the district an Aa3 rating and Standard and Poor’s gave VUSD an AA- rating, just below the highest rating of AA. “So we are in the double A area.” He said Measure A was planned to sell with an interest rate in the 4% range, but the rate dropped to 2.49% just before the sale and to 2.2% the week of the sale. The winning bid was submitted by JP Morgan Securities with an interest rate of 2.55%.

Overall, the district will generate $35 million in bond money by issuing $530,000 fewer bonds and resulting in $5.6 million less in debt service. The cost to taxpayers will average $31.20 per $100,000 of assessed value per year, much lower than the estimated $36 per $100,000 that voters approved. That’s about $77 per year for the average home in Visalia.

“You are looking at about $6 million less in total repayment,” Kolker said. “Lower debt service means less for taxpayers.”

VUSD CFO Nathan Hernandez said the bonds were sold in June instead of earlier so it did not interfere with issuing the last of Measure E bonds. Measure E, the $60 million bond measure passed by voters in 2012, built Ridgeview Middle School, a new wing at Redwood High School and made possible energy-saving solar installations, playground upgrades, safety and security improvements at campuses district-wide. Originally estimated to cost taxpayers $30 per $100,000 of assessed value per year, Measure E only ended up costing taxpayers $22.63 per $100,000 but generated an additional $3.4 million over the $60 million approved by voters.

Hernandez said the $35 million is for modernization, campus security, and new science lab classes at sites throughout the district.

“This is the largest modernization project in the history of this district and I’m looking forward to all the sites that will be fixed,” trustee Neissen Foster said.

Broken bond of trust

Saving money on a bond measure would normally be welcome news but parents are still unhappy with the district’s decision on how to spend Measure A.

The school board voted in April not to move forward with plans to build a fifth high school because the state would not have the other half of the funds after a statewide school construction bond, the unfortunately named Proposition 13, failed in March and the cost of construction in the state continued to skyrocket.

Brittany Christenson is among of group of 10 parents leading a recall of VUSD board president John Crabtree, in part, because of the district’s mishandling of the bond measure.

“The big issue here is transparency,” Christenson responded. Crabtree contends that the school board still wants to build a fifth high school but that would require another bond measure, something Christenson said would be “a huge issue because of voter trust.”

Crabtree said the board did not rescind the bonds because a new high school was just one of many needed projects. School bonds, like the $105 million Measure A, are a wish list of projects that the district prioritizes and funds as many of them as it can. In fact, this summer and fall the district has budgeted $30 million in Measure A funds to upgrade aging schools, science labs and campus security projects, which include installing cameras at single points of entry and door locking hardware that is operated remotely from a school’s front office in case of an active shooter.

Christenson said VUSD schools do need modernizing, and it would be good to raise funds for that goal. However, a better option would have been to ask voters what they wanted to do with the money instead of building a high school. One option would have been to give the money back.

“But from the beginning, they should have been more honest,” she said. “The new high school was the major selling point for that bond, and if voters had had all the information from the start, knowing that the money might not be used for that and may have gone towards other projects, that might have affected their choice to vote for the bond or not. That is how many of us feel at this point.”

Start typing and press Enter to search