Financing options for executing what’s left of two voter-approved bond measures — M and O — will be part of a special study session held by the San Mateo Union High School District Board of Trustees tonight.
How the money is financed could change the district’s cash flow and the potential projects to be tackled by the bond funds.
This isn’t the first time the use of bond funds, as well as financing options, has been revisited. The plans for using money from Measure M — a 2006 $298 million bond measure — were revisited in 2011. The 2009 plan, structured based on historical assessed values of properties, had to be looked at again when property values went down for the first time in 30 years. Measure O, a $186 million bond measure passed in November 2010, was written with lots of leeway. A large reason for the 2010 measure was to pay off previous debt created by bridge loans.
Now the challenge is about how bonds are issued.
Legislation is currently moving through the state that could restrict the issuance of bonds to 25-year terms. Currently, school districts can use a mixture of 25-year and 40-year bond terms. The legislation was introduced after a Southern California district misused the 40-year option creating mountains of debt for voters with few improvements to facilities. Locally, many districts couple the longer term option with the 25-year bonds as a way to capitalize on lower rates or possibly refinance down the road but have cash while construction prices are low.
Restrictions could impact bonds issued next year. Tonight’s study session will look at the financing options as well as prioritizing the remaining projects.
The board meets 5:30 p.m. Tuesday, June 25 at the Burlingame High School Alumni Room, 1 Mangini Way, Burlingame.