{"id":223565,"date":"2016-03-25T00:00:00","date_gmt":"2016-03-25T07:00:00","guid":{"rendered":"https:\/\/sdnews.com\/prop-u-re-fi\/"},"modified":"2016-03-25T00:00:00","modified_gmt":"2016-03-25T07:00:00","slug":"prop-u-re-fi","status":"publish","type":"post","link":"https:\/\/test.sdnews.com\/es\/prop-u-re-fi\/","title":{"rendered":"Prop U re-fi"},"content":{"rendered":"

Por Jeff Clemetson | Editor<\/p>\n

Property tax increase\u00a0<\/strong>could save millions\u00a0in<\/strong>\u00a0long run<\/strong><\/p>\n

Grossmont Unified High School District is hoping voters will be willing to support a November ballot measure to \u201crefinance\u201d Proposition U, the district-wide bond measure for building and repairing GUHSD facilities that was passed by voters in 2008.<\/p>\n

The projects that still need to be completed under Prop U include work on 30 buildings, a new high school in Alpine and other facilities improvements. Beyond Prop U, the district needs additional work on 44 buildings, storm water construction, hardscape projects, water conservation projects and deferred maintenance. And according to GUHSD board members, refinancing is the best way to get the work done for less money.<\/p>\n

\u201cOur ability to sell bonds authorized under Proposition U has been severely stressed due to the lingering effects of the economic downturn,\u201d said Deputy Superintendent of Business Services Scott Patterson at a special GUHSD board meeting held Jan. 26.<\/p>\n

\"Microsoft<\/a>
(Courtesy of Grossmont Union High School District) [Click to enlarge]<\/figcaption><\/figure>Although property values have started to come back, they still are not at a level that would allow the board to sell the bonds in the original timeframe defined by Prop U and that has caused delays for much needed projects, Patterson said.<\/p>\n

When voters passed Prop U, the plan was to sell all the bonds by 2019. Current projections estimate the bonds can\u2019t be sold until after 2032 unless more money can be raised, which is impossible to do under Prop U because it caps the amount of money it can tax homeowners to pay for the bond at $27.90 per $100,000 of the assessed value (AV) of a home. When home prices fell, so did the value of the bonds and investors stopped buying.<\/p>\n

Of the total $417 million worth of bonds that voters authorized to sell under Prop U, only $289 million in bonds have been sold \u2014 leaving over $128 million left to sell, Patterson said.<\/p>\n

The district\u2019s solution is to pass a \u201crefinancing\u201d measure in November that will fund the remaining $128 million of Prop U projects; with an obligation that the district stops issuing Prop U bonds \u2014 in effect, replacing Prop U. If the new measure doesn\u2019t pass, Prop U projects will take more time and money to complete.<\/p>\n

\u201cBasically, it is going to take us another 14, 15 years from where we sit today to use [the remaining] $128 million and the repayment ratio for those dollars would be $497 million \u2014 or roughly four times, if we do nothing,\u201d said Mark Young, a financial advisor who studied the issue for the district.<\/p>\n

Under the terms of the proposed bond replacement, the repayment on Prop U\u2019s remaining $128 million is estimated at $238 million \u2014 less than half the $497 million projected under the current setup, Young said.<\/p>\n

The GUHSD board hired Young to find out what the added tax rate would be like with a new authorization on the same Prop U projects and found it would be nearly $11 per $100,000 AV of homes on top of the $27.90 per $100,000 AV.<\/p>\n

The median price of a home in the district\u2019s area is close to $300,000, so the average homeowner already pays around $90 a year for Prop U and would see an increase of roughly $33 if the new bond measure passes.<\/p>\n

\u201cHowever, the $27.90 would end much sooner under the replacement bond scenario, resulting in significant savings,\u201d Patterson said. Currently, Prop U bonds won\u2019t be paid off until 2054 but the replacement bond pushes that date up to 2044 because the district won\u2019t have to wait until 2032 to start selling bonds again.<\/p>\n

But the cost savings for the district won\u2019t exactly translate to a savings for taxpayers \u2014 at least not in the short-term.<\/p>\n

\u201cFor somebody who is in a house today, they\u2019re not really saving money because now there\u2019s going to be an additional tax in order to get those facilities in place over the next three years,\u201d Young said. \u201cBut over the life of the program, various constituencies in the district will save over a quarter of a billion dollars. Someone who is in a house today who is maybe retired and won\u2019t be in that house in 10 years won\u2019t see the benefit \u2026 their grandkids will.\u201d<\/p>\n

If the proposed measure passes, the district will see the timeline for completing Prop U projects speed up significantly.<\/p>\n

\u201cIf we had this refinancing, or whatever the correct name for it is, in late 2016, early 2017, I would be doing design and then in 2017, 2018 I\u2019d be able to start construction again,\u201d said Katy Wright, director of facilities management for GUHSD. \u201cAnd that\u2019s [much] different than stretching onesie, twosie projects out for the next 16 years \u2014 and that\u2019s what in fact I\u2019d be forced to do [without the bond fix].\u201d<\/p>\n

Wright thinks speeding up the timeline by refinancing Prop U projects would also save additional money.<\/p>\n

\u201cWe also put escalation into the program because we know things cost more tomorrow than they do today,\u201d she said. \u201cSo that would be an additional $60 to $80 million worth of projects we can do by avoiding the long delay.\u201d<\/p>\n

\u2014Escriba a Jeff Clemetson a jeff@sdcnn.com.<\/em><\/p>\n

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