Bond Issue Brings School Board Meeting to Boil
Apr 09, 2024 02:43PM ● By Angela Underwood, photos by Angela Underwood
WEST SACRAMENTO, CA (MPG) - A resolution to refund a bond based on market conditions caused some controversy at the March 28 Washington Unified School District (WUSD) Meeting.
Washington Unified School District Chief Business Officer Monique Stovall and KNN Public Finance managing director Blake Boehm presented to the board trustees and the public a presentation on general obligation bonds and how they are used to improve and maintain school and district facilities.
Stovall explained that doing so costs "a pretty large amount of money."
"As a matter of fact, in 2016, over 60,000 West Sacramento voters approved the $49.8-million bond," Stovall said, adding that the bond is distributed in a series based on needed projects.
Stovall explained that a possible bond refinancing was for Measure V in 2015, amounting to $24.9 million. The chief business officer likened the district's financial situation to homeowners refinancing for better interest rates.
"The key difference between refunding a bond and refinancing a home is when refund bond a bond it does not extend the length of the payment schedule," Stovall said.
The item on the board agenda, listed under action rather than information, upset two community members at the podium. Suzanne Johnson made it clear that she found it "reprehensible" that the district was considering the "possibility of refinancing the bond."
"That is not what you are doing; it is an action item. You are clearly going to try to approve that tonight," Johnson said.
Community member Danielle Langford agreed that the agenda item should have been informational and up for further discussion rather than actionable. Langford read from an email she sent to each board member, whom she accused of "signing a blank check" before asking the board to table the resolution until actual costs clear.
Former Washington Unified School District board trustee Pat Flint said it would be hard for anyone to oppose the action if it resulted in an "overall decrease in the cost of the bonds to the taxpayers."
"However, as I looked through the over 150 pages of the documents that were presented, I found very few specifics," Flint said. "In fact, most of the locations where specifics would be included, such as the amount of interest rate and bond rate, everything was left blank."
Citing Yolo County's error in not charging up to $52 million in bond obligations in 2013 because the county assumed it was paid in full, Johnson said the district can no longer use the county as a scapegoat.
"You can blame the county all you want for the stuff that happened before but somebody in the district is responsible for watching those things," Johnson said, adding that's what they pay administration to do. "You want to know why we don't trust you; this is why."
Holding up a laptop with real-time footage of projects and reports, Board Clerk Sarah Kirby-Gonzalez, Area 1, made it clear that board trustees have nothing to hide.
Board Clerk Sarah Kirby-Gonzalez, Area 1, shows the public how transparent the district is on its website that lists all projects and information for view.
"We are very transparent about the bond money and what is happening with it, and you can view it all on the website," Kirby-Gonzalez said.
Board Trustee Coby Pizzotti, Area 3, asked Bohem and Stovall to return to the podium "to clear up some of the lies" made by the public, to which Pizzotti immediately apologized for his sarcasm.
Washington Unified School District Board Trustee Coby Pizzotti, Area 3, speaks at the meeting.
Boehm explained the reason parts of the document remained blank was because "until we get approval from the board to move forward with the refunding," they cannot look into the market to price the bonds for better rates.
Boehm said he and Stovall are "working off information based on current markets and preliminary numbers in conjunction with the underwriter" to provide good faith estimates that were, in fact, included within the resolution.
"The current good faith estimates that are reflected are based on a total level of debt service savings of approximately $1.16 million, which is reflected a reduction in interest," Boehm said. "The current series 2015 bonds have an average interest rate of roughly 3.9%, and we are looking at reducing that rate closer to 3.06%, equating to about $1.7 million in interest cost savings."
Board Trustee Jackie Thu-Huong Wong, Area 4, clarified that blank spaces are necessary for now.
Washington Unified School District Board Trustee Jackie Thu-Hong Wong, Area 4, comments.
"To underscore, you can't do this if it's a cost burden to us; two, you are estimating because you are not in the market, really understand what those s[eco], so you can't put in a number you can't commit to," Thu-Huong Wong said of what could be a $1.16 million saving over the life of the bond.
As for any future errors on the county's side, Thu-Huong Wong said, "Next time this comes to fruition, we will contact the county and make sure our taxpayers are not delayed charged."
Community member Suzanne Johnson shares her concerns about the possibility of refinancing a bond.
The Board of Trustees unanimously approved the resolution, which directs the city staff together and Boehm to conduct a detailed analysis of current market conditions. The analysis must show a minimum percentage threshold in savings before Washington Unified School District can proceed with a refunding. Closing out the comment portion of the meeting, Pizzotti empathized with the public.
"I understand that you are frustrated because you are taxpayers, and so are we," Pizzotti said. "I felt my taxes go up as well."
Community member Diane Langford wanted the bond resolution action to be tabled at the Washington Unified School District Board of Trustees meeting March 28.
