Santa Barbara school board members are expected to decide Tuesday night whether they will authorize selling the rest of the district’s general obligation bonds in August, even though the move would increase the tax rate. At the same special meeting, they will face the reality of the district’s facility needs, which go hundreds of millions of dollars beyond the existing bonds available — even if the district does sell them all.
The board is scheduled to re-evaluate the list of bond-funded projects and make priorities, pending the decision to sell more bonds. The elementary and secondary districts have $20 million and $35 million left to sell, respectively.
Santa Barbara Unified School District staff members suggest selling either current interest bonds or capital appreciation bonds. The latter, which the district used for the previous sale, has higher interest and costs much more to pay back. Either way, selling bonds in August would cause the tax rate to increase.
Ed Price, property tax division chief of the Santa Barbara County Auditor-Controller’s Office, told the board there is no way to predict future tax rates.
He said the very basic formula for calculating a tax rate is dividing the debt service requirement over the total amount of assessed valuation, so a greater valuation would yield lower tax rates.
Ed Heron, an outspoken critic of the plan to sell the bonds in June or August of this year, has said his concern comes from the bond campaign’s insistence that the bond sales wouldn’t raise tax rates.
Practically speaking, he said, “there’s no question we should sell the bonds,” adding that he felt morally compelled to dig into the details of the tax rate implications of the board’s actions.
In the Hope Elementary School District, the board had similar misgivings.
Measure L, an $8 million bond, was passed in 2010 to fund solar panels, a library at Monte Vista School, a multipurpose room at Vieja Valley School and education technology, according to Superintendent Dan Cooperman.
The solar installations have halved the district’s electricity bill — even with rate hikes — and it will receive $420,000 in rebates from Southern California Edison over the next five years, Cooperman said.
The district had to pay $4 on every dollar borrowed for the $3 million in capital appreciation bonds.
Since the board knew the tax rates would go up, members wanted input. After many public meetings, the district filed an active validation lawsuit against any interested persons. Basically, it gives any member of the public a chance to protest, and if anyone does, the court decides whether the district can raise the tax rate and sell bonds, Cooperman said.
The comment period is open until May 23.
If the sale is validated, the district will sell the bonds and finish its projects. If not the, district may wait, Cooperman said.
“A public hearing at the board doesn’t give you legal validation,” he noted. There is also a “passive validation” process — the board could sell the bonds, wait 60 days and see if anyone protests, but Cooperman said members wanted to be more proactive and open to the public.
The Santa Barbara school board’s special meeting is scheduled to start at 5 p.m. Tuesday in the district board room, 720 Santa Barbara St.
In addition to future bond sales, the board will hear a detailed facilities report from TELACU Construction Management, the bond project management firm.
The district hasn’t had a Facilities Master Plan since 2007, and TELACU is recommending that the district update it with its Strategic Plan.
If bonds are sold, the board will have to prioritize the rest of the capital improvement projects, since the need exceeds the funds by at least $300 million.
Superintendent Dave Cash also will discuss the many “unfunded necessary projects,” such as replacing portable classrooms, modernizing classrooms, installing photovoltaic systems and replacing windows at historic school sites.