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School Bond Update

As 2012 draws to a close it is a good time to give an update on the school construction projects and to answer a few

Phase One of our projects started last summer is 99% completed. We are now running on solar power at both campuses which will reduce our carbon footprint and significantly reduce our PG&E monthly bill. There is a monitor at each site so students can track our energy production. We will also receive a check from the California Solar Initiative each month for the next five years. We estimate the total to be approximately $270,000.

Most of the work last summer was done at the elementary school. We started on the roofs which we had been patching for years and replaced all the flat roofs on the main building and one of the modular classroom buildings. We also gutted the two bathrooms at west end of the main building and replaced them with one large boys bathroom that meets all the Americans with Disabilities (ADA) requirements. We put in a similar restroom for the girls replacing the boiler room and a storage closet. We also upgraded the electrical service and ran computer fiber optic service to the classrooms.

One critical need that we have had for years has been space for small groups and specialists to work with students. We created two new small group spaces one at the north end of the office hallway and we divided the teachers lunchroom in half to create the second space.

The computer lab was totally modernized with new workstations, new carpet, wall coverings, and lighting. The computer classroom will be the standard we will use to modernize all the classrooms in further phases.

At the high school some bond funding was used for the locker room renovation. Both boys’ and girls’ locker rooms were totally modernized. The bathrooms were re-tiled and brought up to ADA standards with all new fixtures. The showers were changed to individual shower stalls with new tile and fixtures. Coaches’ offices and storage rooms were also redone.

I know there has been some concern about the status of the bond repayment because of the issues that came up in Willits and in some other districts across the state. The two issues that relate to these problems are balloon payments and capital appreciation bonds.

The balloon payments come up if a district takes out a bond anticipation note. Districts get their money for projects as bonds are sold. Bonds are sold as the level of assessed value increases and there are funds to repay the bonds. Some districts don’t want to wait for the assessed value to appreciate to get on with their project so they take out a loan (BAN-Bond Anticiaption Note) and get on with their project. When the payment is due hopefully the increased value will support a new bond sale to pay off the BAN. Anderson Valley looked at the idea of a BAN but the board decided against it. So, we have no balloon payment.

The other issue of concern is the purchase of capital appreciation bonds (CAB). Some districts across the state have purchased CABs to finance their building. These bonds are often on a repayment schedule of up to 40 years and they are typically on a higher interest rate. If a district bought 100% of their bonds as CAB’s the cost of repayment would be extremely high.

We purchased a small amount of CAB bonds, approximately 5% of the total debt, for a specific purpose. For our solar bonds there is a limit to what we can use to cover the cost of issuance. We are allowed to use CAB bonds to cover those costs. When we purchased these bonds we received a premium which when factored in keeps our repayment cost in the same range as a normal general obligation (GO) bonds. We also will repay these bonds on a 25 year schedule like our other bonds.

The financing of school modernization is complicated but is reviewed and approved by our school board. We also have a great citizens’ advisory board that reviews our spending and our program is audited every year to make sure everything is done correctly. Our board has taken a very fiscally prudent approach to our spending. We wait until the money is approved and in the bank before moving forward. We appreciate the support the community showed us when they passed Measure A and we take our responsibility to spend the funds wisely .

As to our next phase we are approved for $1.5 million in modernization from the state and we hope to get these funds early in the new year. When the check is in the bank we can continue our building and if things go according to plan we will sell some more bonds in 2015.

--Superintendent J.R. Collins

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