By Marsha Sutton
Bond issues pertaining to improvements at Torrey Pines High School and at schools districtwide were passed by the San Dieguito Union High School District’s Board of Education on March 1.
With the school board’s approval to issue $2 million in lease revenue bonds for Torrey Pines, three projects will move forward. Two projects will replace heating, ventilation and air conditioning units and provide roof repair at one building for $450,000 and at another for $302,000.
The third project is the replacement of the synthetic field at TPHS for a cost of $1.25 million.
The bonds would have an eight-year term with interest-only payments in the first three years, after which level interest and principal payments would be made. Unlike General Obligation bonds which are backed up by special taxes on property owners, “the ultimate backstop for lease revenue bonds is the district’s general fund,” according to the agenda report.
The total principal amount of the bonds would be $2.5 million, with about $2 million available for the projects. After including various funding sources, the estimated cost to the district to issue the bonds is about $200,000.
Eric Dill, SDUHSD’s associate superintendent of business services, told the board the principal payments would be deferred for three years, at which time the district would need to recognize this liability. However, if San Dieguito is successful in passing a General Obligation bond in November, then GO bond proceeds could be used instead of dollars from the general fund to pay off the lease revenue bonds, according to the board report.
The immediate need to replace the Torrey Pines field was a blow for the district. Dill said the lifespan of the field was estimated to be eight to 10 years. It is now in its 10th year and beyond the warranty period.
Board member John Salazar said that paying $200,000 in upfront costs “seems enormously expensive.” Dill agreed, saying this was not “the preferable way of funding,” but the district had little choice.
Although SDUHSD is considering asking voters to approve a GO bond that could potentially pay for this work the following year, Dill said the district could not wait another year to fix the field. He said the field is not safe, and the district risks incurring liability for injuries unless the turf is replaced. He said nothing on the field “appears to be grass any more.”
Furthermore, the outcome of the GO bond – whether it will pass or even whether the school board will decide to place it on the November 2012 ballot — is uncertain.
Dill said the TPHS Foundation approved a contribution of $50,000 for the cost of the landscape architect, D.A. Hogan & Associates, “who will create the specifications and oversee the installation by the contractor.” That cost, however, is apart from the project funds approved by the board at the March 1 meeting.
The vote was unanimous, although Salazar hesitated before voting. After the meeting, in an email, he said he was initially against the lease revenue bonds “because of their outrageous upfront expenses.”
He said he was told by district staff that there was no alternative. “What really convinced me was that the administration believed that if we did not replace the field this summer, then the district could be vulnerable to lawsuits in the unfortunate event of an injury,” Salazar said. “I knew, by speaking to many parents and students, that the community wanted a new sports field, so even though I was frustrated by the expense, it was something that I ultimately decided needed to be done.”
SDUHSD superintendent Ken Noah later said staff explored the possibility of renting another field for one year until the district was able to determine the outcome of the GO bond, but this was not a viable option. And cancelling sporting events for one year was “unacceptable,” he said, calling the school’s athletic programs “an important part of our mission.”
Dill said TPHS uses the field for six periods of physical education, plus football, soccer, lacrosse, field hockey, track & field, cross country for speed work, and other sports for training, including cheer, wrestling, tennis, gymnastics and basketball.
Public opinion poll
The second bond-related item passed by the SDUHSD school board March 1 was to expand the scope of work with the Dolinka Group.
A contract with Dolinka was approved last month to provide financial advisory services related to placing a GO bond measure on an upcoming ballot, for $20,000, and to provide financial advisory services regarding the issuance of the bonds, for $65,000. Funding for both these phases is listed by the district as “campaign donations and future bond issues.”
The newly expanded contract authorizes a third task for Dolinka: to obtain community input by hiring a professional polling service to question residents on their tolerance for new taxation for extensive renovations and upgrades district-wide totaling about $400 million.
The projects would improve technology and modernize aging campuses that serve the district’s more than 12,000 middle and high school students. The GO bond, which the district is considering for the November ballot, would need 55 percent of voter approval.
The district had first considered placing the GO bond on the June ballot, but that is no longer an option.
“We want to get more information on public support before we take action, and there wasn’t enough time to get a poll done and then draft all of the documents which would be necessary to put the measure up for board consideration and submission to the county election officials,” Dill said in an email.
Districts are restricted from using GO bond money to offset general fund operating costs; the money can only be spent on school facilities and capital improvements. The cost of the bond is limited to a maximum of $30 annually per $100,000 of assessed property value, and pricing and terms would be determined after preliminary work is completed.
This newest component of the Dolinka contract replaces work that was to be done by another company, Oakland-based Tramutola LLC, after the district’s Tramutola liaison unexpectedly resigned her post.
Dolinka had originally submitted a separate proposal for this work as part of the group’s initial proposal and will conduct a limited public opinion poll on a smaller scale than first planned. The purpose, Noah said, is to determine the feasibility for success and gauge public opinion in light of potentially competing bond measures that may also be on the November ballot.
Dolinka, according to the board report, will be “developing a community outreach program; identifying key stakeholders; creating factual non-advocacy information and material; designing, conducting and interpreting a limited baseline public opinion poll; and develop[ing] potential ballot language.”
Noah said this is not advocacy, so district funds can be used. The cost for this additional work will be $2,000 per month for March through July, $1,500 for August 1 to 15, $18,000 when the poll is complete, and other expenses related to authorized work.
August 15 is the final day the school board can decide whether to proceed with the bond measure.
Noah said the district will publish the results of the poll, which will identify where support exists, what supporters look like and where there’s little or no support. He said about 400 randomly selected registered voters would be contacted by telephone and the polling company would provide an “extensive summary” of the results.
Noah said he would not bring the recommendation to the board if the poll does not show sufficient support. “That would be wasteful,” he said. “I have no interest in pursuing something that’s a losing proposition.”
Salazar had a number of questions regarding the amended Dolinka contract that Noah answered, but in the end was not satisfied and voted against the measure which passed 4 to 1.
“I voted no because I feel that regardless how it is framed the end result of the survey/outreach will be slanted towards support of the GO bond,” Salazar said in an email. “I think if the administration believes we need to have a GO bond to re-build/re-model our schools, then that is what they should recommend to the board.”
He said board members should be able “to make a decision without the aid of a very expensive political outreach and survey program at taxpayers’ expense.”
But Noah said the poll would use neutral language and would provide vital information.