Solana Beach School District is given AAA bond rating
The Solana Beach School District recently received an AAA bond rating by Standard & Poor’s Global and Moody’s for its general obligation bond, the highest rating assigned. The AAA mark denotes that the district has an “extremely strong capacity to meet its financial commitments.”
“There are not that many AAA-rated districts and they tend to be very strong, fiscally-solvent districts so we were very pleased,” said Solana Beach School District Superintendent Terry Decker at the April 20 board meeting.
While there are several AA and AA+ rated districts nearby, Rancho Santa Fe School District is the only other AAA rated school district in the area, Decker said.
“What that means to the community is that we’re saving them tax money because we’re going to be having better interest rates,” said board member Holly Lewry.
In their bond credit rating, Decker said the S&P analysts said they were very impressed and talked about the strong economy in the area, the fact that the district maintained a strong general fund balance.
“I know that’s something our board has taken very seriously; that fiduciary responsibility to ensure that we are covered should anything untoward happen,” Decker said.
Decker said the analysts also pointed out the strength of the Solana Beach Foundation and the support it provides as part of the positive overall rating.
The district’s target date for Measure JJ bond sales is May 3.
The $105 million Measure JJ was approved by the voters in November 2016. Cost for the repayment of these bonds will be approximately $272 a year for the average homeowner in the district.
The first issuance will be for $50 million and the first phase of district-wide improvements includes the reconstruction of Skyline School, the modernization of Solana Highlands this summer and the completion of the Solana Pacific solar project. In the 2017-18 school year, the district will begin the planning process for the reconstruction of Solana Vista and the modernization of Solana Santa Fe schools.
The district has stated its commitment to ensuring transparency in the use and expenditure of bond funds. There will be no use of Capital Appreciation Bonds (CABs) which proved controversial in the Poway Unified district—the long-dated CABs can result in a higher debt burden for bond issuers. The term of the SBSD’s bonds will be limited to no more than 30 years, bond revenue will not be used for teacher or administrator salaries and an Independent Citizen’s Oversight Committee (ICOC) is currently being formed. The Strict Accountability in Local Construction Bonds Act requires that school districts appoint an ICOC after a bond election to monitor the expenditures of bond revenues and inform the public of any waste or improper use of taxpayer money.
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