La Cañada Unified’s creative bond financing could save taxpayers $500K
La Cañada Unified officials conducted business at a fast pace Tuesday during a regular meeting, authorizing the issuance of a second series of Measure LCF school bonds and learning how state affairs could impact the district’s 2019-20 budget.
Early bond issuance, refinancing could mean big savings
Board members unanimously passed a resolution authorizing the issuance of $30 million in school bonds in March, as opposed to the original 2021 timeline, to help fund construction projects identified in the district’s facilities master plan.
Measure LCF bond consultant Adam Bauer, of Irvine-based Fieldman, Rolapp & Associates, suggested the move would give officials more purchasing power by allowing them to pay for projects earlier and keep rising construction costs at a minimum.
Bauer said the combination of historically low interest rates and La Cañada Unified’s stronger than ever assessed value total provides a key opportunity for the district to realize cost savings by refinancing a 2011 bond series.
The consultant estimated that, factoring in the net present value of the early issuance with a reduction in expenses of about $125,000, that the overall savings to district taxpayers would be about $466,911.
School board member Dan Jeffries said the idea of early issuance and refinancing the 2011 bond seemed a wise course of action.
“If we refinance, we can save taxpayers about a half a million bucks,” Jeffries said. “And if we issue bonds early, we can get more bang for our buck because we can start our projects earlier.”
Bauer said bond prices would be set for investors by around March 11 with the closing period anticipated for March 25.
Interim budget update sees $1M uptick
Assistant Supt. Mark Evans provided a rough estimate of the district’s financial picture through 2022, presenting a second interim report for 2019-20.
The district is on track to receive nearly $49.3 million in revenues this fiscal year, about $1.13 million more than what officials anticipated in their first interim budget in November, which forecast more than $1.6 million in deficit spending.
Gov. Gavin Newsom recently proposed a cost-of-living adjustment of 2.29% — smaller than the 3% assumed in the first interim budget but above later projections that forecast a 1.7% change.
“What we have is a net gain over the first interim,” Evans said. “There is a budget surplus, but it’s not as extensive as before and there are several [one-time funding] programs the governor is proposing — and education is among those.”
Expenditures are steadily climbing as LCUSD is mandated to increase its commitments to employee pensions, a trend Evans said will continue in outlying years. Currently, the district pays about $30 million for employee salaries and contributes nearly $5 million toward retirement.
Evans said the budget must be submitted to the county by March 15, after receiving board approval.
Also Tuesday, board members:
• Recognized classified and certificated employees selected Friday as the first-ever winners of a new quarterly LCUSD award created to recognize staff members who excel in their jobs. “The nominations were inspiring and gave firsthand accounts of the amazing work being done throughout LCUSD,” said Supt. Wendy Sinnette, reading the inaugural recipients. Classified winners were Claudia Alequin, La Cañada High School office manager; Effie Edwards, Paradise Canyon Elementary School office manager; and Jill Oliver, Palm Crest Elementary School paraprofessional. Certificated winners were Laurie Hopkins, La Cañada Elementary School fourth-grade teacher; Leslie Baldwin, LCHS 7/8 English teacher; and Sarah Beattie, LCHS social studies teacher and Associated Student Body adviser.
• Approved cost increases for two Measure LCF projects, including the high school cafeteria renovation (from $1,195,000 to $1,254,608) for the correction of design deficiencies, and the high school band room renovation and parking lot drainage project (from $985,993 to $1,027,020), which required the installation of new cabinets.
• Accepted initial negotiation proposals between the district and La Cañada Teachers Assn. union members, which will allow for the beginning of talks regarding hours and wages, the school calendar and extra duty assignments, according to Assistant Supt. Mark Evans, who will head the effort.
• Received updated 2020-21 school site safety plans for all La Cañada Unified school sites, previously reviewed and approved by members of the district’s Local Control Accountability Plan committee members, administrators and representative parents and students.
