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Schools

BHUSD Seeks Short-Term Loan for Measure E Projects

The Board of Education on Tuesday approved a request to seek up to $80 million in bridge financing.

The Board of Education this week unanimously approved a request from a district official to seek up to $80 million in bridge financing to fund the start of several -related projects.

Bridge financing is a short-term loan used until permanent financing—in this instance new bond sales—is secured. Money from the new financing is used to pay back the bridge loan. 

"Unless we get some measure or bridge financing to bring these bond sales a lot closer to when we need the money, we will be limited to starting construction on one or possibly two [school] sites," Nelson Cayabyab, chief facilities manager for the Beverly Hills Unified School District, said at Tuesday's board meeting.

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Bridge financing is needed because the $334 million in Measure E bond sales are staggered from 2009 to 2018. Measure E was passed by voters in 2008 with the aim of modernizing the city's five schools.

The first batch of the Measure E bonds—$75 million worth—were sold in fiscal year 2009; $62 million of these funds remain, Cayabyab told the board.

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Neither Cayabyab nor board members explained how $13 million from the first round of bond sales was spent. As Patch has reported, some of the money has gone to associated with the prosecution of Cayabyab’s predecessor, Karen Christiansen, who has been ordered on two counts of misappropriation of public funds and four felony counts of conflict of interest.

A total of $321 million in Measure E bond sales is currently scheduled, including the bonds already sold, according to Cayabyab. About $44.2 million of bonds are to be sold in fiscal year 2012, $38.73 million in fiscal year 2015 and $176.07 million in fiscal year 2018.

Measure E construction plans have been made in the order of greatest need, Cayabyab said. is designated as having the most problems, with renovations there estimated to cost $46 million.

is next on the list with $31.5 million needed for repairs followed by with $33.4 million and with $12 million. (Much of Beverly Vista was rebuilt after it was damaged in the 1994 Northridge earthquake.)

Repairs at are estimated to cost $176 million, with an additional $10 million needed to update the structure that houses the pool, gym and locker rooms. Repairs at the alternative education building are expected to cost $10 million.

The scheduled repairs add up to $319 million. The total estimate is 20 percent higher than the actual estimate to account for unanticipated expenses, Cayabyab said.

The exact amount of bridge financing needed will be determined later this year after construction starts. But a chart displayed during Cayabyab's presentation showed the district running out of money in December 2013, with an $80 million gap at that time between the funds available and the funds needed for construction.

Cayabyab confirmed to Patch that he would seek at least $80 million in bridge financing.

"I will not start construction on any site unless I am sure I have the funds to finish," he said.

The BHUSD should expect to pay an interest rate of 3 to 5 percent on the bridge loans, Cayabyab told the board. The bonds BHUSD holds earn just 1.5 percent of interest, he said.

The board’s decision gave Cayabyab the authority to invite financial institutions to send in their proposals for the short-term loan. Ads have been placed in local media, he said, and the request is on the BHUSD website under "News & Announcements."

"The Beverly Hills Unified School District is soliciting a Statement of Qualifications from qualified firms specializing in the K-12 public educational sector to assist the district with bond financing options for its facilities modernization program," the announcement states.

It will take several weeks to review submitted proposals. 

"I expect to come back to the board with a recommendation in about two months," Cayabyab told Patch.

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