The Board of Education will hold a special meeting Wednesday to consider ways to modify the .
The board that changing market conditions and flat property tax values had voided the Beverly Hills Unified School District’s plans to raise $334 million by 2018 through Measure E. The measure was passed by voters in 2008, with the aim of raising funds to modernize all five of the city’s aging schools.
The district’s bond consultant, Keygent, reported at a July 19 Measure E study session that the original bond schedule was no longer viable because assumptions made in 2008 about the assessed value (AV) of Beverly Hills property were inflated. Measure E assumed that the AV of city property would rise an average of 5.77 percent for 2009 through 2011, and rise an average of 4.5 percent thereafter. However, the city’s AV rose just 1.75 percent from 2009 through 2011.
Taking into account the actual growth of the city’s AV and current AV projections, it would take 40 years to raise $334 million if no changes were made to the program.
Keygent is expected to present several financial options to the board, including using a combination of 40-year bonds and Bond Anticipation Notes, which would allow the BHUSD to access bond proceeds several years before the actual issuance of bond sales.
The company’s presentation is available as a PDF on the BHUSD website.
The district already sold its first round of Measure E bonds—$72 million worth—in 2009. After paying for legal bills related to the case and for architectural fees, there is about $60 million remaining.
The board must also decide what to do, if anything, with these funds. The money could be spent on renovations at either or , the two schools deemed to be in the worst condition.
“It’s been almost three years since the bond passed,” board member Steven Fenton said at the July 19 meeting. “We were elected to make decisions, so let’s make a decision about this money.”
But several of his colleagues said the board needed to solve the larger Measure E funding issues before breaking ground on any school construction.
If the board votes in favor of Bond Anticipation Notes or another complicated form of interim financing, the decision could jeopardize BHUSD's high investment ratings; both Moody's Investors Service and Standard & Poor's have given the district their .
Another option would require raising the bond tax rate for residents. The BHUSD has legal authority under California's Proposition 39 to raise the tax rate by a limited amount, or the district could hold a referendum seeking voter approval to raise the rate by a substantial margin.
BHUSD staff is optimistic that Keygent will help find a solution.
“I have a lot of faith in Keygent as they are one of the top advising firms in the state,” Superintendent recently told Patch. He worked with the agency in his prior job as superintendent of the top-rated San Marino Unified School District.
Wednesday’s special board meeting will take place at 4 p.m. at the BHUSD district office and is open to the public. Keygent officials and Chief Facilities Manager Nelson Cayabyab will also attend.
“It is real important for the board to consider input from various community groups when making a decision,” Woods said.
Like Woods, I urge parents, residents and taxpayers to attend the meeting.