Culver City schools will be saving quite a bit of money after the School Board approved a resolution to sell $53 million in Series II Measure CC bonds earlier than expected.
Mike Reynolds, assistant superintendent for business services, said accelerating the timing of the bond sale helped the School District take advantage of falling interest rates. This resulted in significantly lower debt service.
Among the nine bidders for the bonds, the winner, Robert W. Baird & Co., Inc., came in with a bid of 3.635 percent. The District had projected an interest cost of 5.5 percent.
Mr. Reynolds added that the timing of the bond sale also allowed the District to take advantage of today’s construction costs before they rise.
Mr. Reynolds aid the accelerated schedule “likely has saved millions of dollars compared to what we would have paid down the road.”
Total net debt service anticipated when the bonds first were approved was $114.7 million. Recent refinancing means the District only will pay $90.1 million in principal and interest for the $53 million in Measure CC bonds.
The bonds fund a wide array of improvement projects, including:
- Repairing or replacing deteriorating school floors, walls, windows, leaky roofs, plumbing and restrooms.
- Bringing schools up to modern standards for fire and earthquake safety, removing asbestos, fungus and other hazardous materials, and install needed fencing, lighting, locks and security to keep students safe.
- Installing or upgrading air conditioning, heating and air filtration to ensure healthy learning environments.
- Upgrading and repairing aging school electrical systems, and replacing science labs and equipment so that schools can offer modern classroom technology and computer science to students.
- Providing the technological equipment and the modern classrooms necessary to ensure that all CCUSD students are college and career ready.
- Providing permanent classrooms for students in the continuation high school.
All of these developments “dramatically improve the learning environment and opportunities for all students,” said School Board President Sue Robins.
Citing near-term improvements such as safety and security upgrades, air conditioning and new learning facilities for Career Technical Education, Science, and Arts Ms. Robins said changes to the Robert Frost Auditorium will make it “a premier theater space on the Westside.”
A big reason for the more advantageous interest rate is the astronomical growth in the District’s overall assessed value. It grew to 8.9 percent in 2016, fourth highest among school districts in all of Los Angeles County.
Mr. Maleman may be contacted at gmaleman@aol.com
I don’t see any actual savings here. The “savings” here are based on an earlier projection, an educated guess. Just because the district’s earlier estimate was off–almost two percentage points too high- doesn’t constitute any future savings. It just shows how far off the projection was. If the district had made a 6.5% estimate would that make our “savings” thirty million dollars?
The rate of 3.635% is the actual rate taxpayers will pay. Now, if at a later date, the district can refinance these funds at an even lower rate; then that would actually be a savings to the community. Not this theoretical, paper savings.