The spending begins

By Marsha Sutton

The current financing schedule for San Dieguito Union High School District’s $449 million Proposition AA bond shows that $160 million Series A bonds will be issued this April, which is about one-third of the total.

Three more draws are planned over the next six years: $125 million Series B in 2015, $100 million Series C in 2017 and $64 million Series D in 2019.

The first draw of $160 million will be separated into Series A-1 bonds for $10.8 million, which is taxable, and tax-exempt Series A-2 bonds for $149.2 million.

The $10.8 million Series A-1 money will be used to repay 2010A Qualified School Construction Bonds, which were issued to fund solar projects at two of the district’s schools three years ago. Prop. AA’s ballot language listed this repayment as an intended use of part of the bond money, making it legal.

According to SDUHSD’s Feb. 7 school board report, the largest portions of the Series A-2 money in the first draw, the $149.2 million, will be allocated as follows:

•$52.5 million for the new middle school in Pacific Highlands Ranch, for land purchase, design work and construction

•$27.7 million at San Dieguito Academy in Encinitas, for artificial turf field, synthetic track, stadium reconstruction and a new math/science building

•$20 million at Canyon Crest Academy, for fields and athletic facilities

•$14.4 million on the La Costa Valley school site in Carlsbad, for a multi-purpose room and athletic fields

•$13.4 million at La Costa Canyon High School in Carlsbad, for technology infrastructure, media center remodel and planning for future construction

The rest will be used for lower-cost projects at the two middle schools in Encinitas, planning for future construction at Carmel Valley and Earl Warren middle schools, small projects at Torrey Pines High School and district-wide technology infrastructure.

Eric Dill, SDUHSD’s associate superintendent of business services, said about $20 million in this first draw will be spent on design work and the approval process for the first phases of construction on each of the school sites in the Master Plan. These are projects that require substantial architectural and engineering design and need extended lead time for the state approval process.

“Most of those construction projects will not start until we receive funding from our second draw which is estimated for 2015, but we will have already gone through the approval process so we will be ready to go when the funding arrives,” Dill said.

Specific school construction master plans can be viewed on the district’s website [].

Dill said most of the money in this first draw will be spent before the second draw in 2015, with the exception of the new middle school in Pacific Highlands Ranch and one building at San Dieguito Academy, both of which will spill over into 2016.

For the new middle school, Dill said the district needs to have “100 percent of the funding before we start. We don’t want to suddenly slam on the brakes.”

$52.5 million for new middle school

The district is budgeting about $52.5 million in this first draw for the new middle school which will be constructed in two phases, the first in 2015 and the second in 2020, to accommodate an eventual 1,000 students.

This amount is an estimate of the total costs for land purchase, design and architectural work, site preparation, and the first phase of construction which will serve 500 students.

Of the $52.5 million, $1.8 million is for architectural and engineering services from the firm Lionakis, with offices in Newport Beach. Actual construction on Phase 1 is expected to run about $36 million, Dill said.

This leaves about $14.7 million for land acquisition, although Dill would not state precisely how much the land will cost, as the district is currently in closed-session negotiations with landowner Pardee Homes over the final purchase price.

The $36 million for construction will fund the building of the core campus which will include classroom buildings, common areas and administrative offices.

Phase 2 construction, which will add another 500 seats, will cost less because the common areas will already be built.

The cost of the land, Dill said, will be either the option purchase price, which was a number set in 2004 that inflates every year, or the current appraised market value – whichever is lower. If the lower of the two is the option purchase price, the district will pay about $12 million.

$20 million for CCA fields

Astute readers will note that last week I reported that the field work being done this summer at Canyon Crest Academy would cost $3 million.

Clearly, this new number given at the Feb. 7 board meeting – $20 million for CCA – is way higher.

Dill explained that the $3 million cost for the CCA fields referred specifically to projects to be completed this summer, which are to install artificial turf and synthetic track and provide stadium seating.

The remaining $17 million in the first draw will be spent to relocate fields to make room for construction of the new middle school adjacent to CCA. These will be completed not this summer but over the next two years, Dill said.

The district plans to buy two parcels adjacent to CCA on the east and west sides of the high school campus. The six- and seven-acre parcels are both dirt lots currently. The east side is for the middle school while the west side will be for eventual expansion of CCA.

“The new middle school will be located on the southeast side of the CCA campus, partially on one of the new parcels but extending into space that is currently used as field space for CCA,” Dill said.

The district needs to relocate CCA’s fields west onto the other new parcel because the new middle school will encroach into CCA’s field space.

Because two parcels were offered to the district at different years, due to circumstances in the developing community that shifted Pardee’s priorities, CCA ended up being built to bisect the two parcels, requiring the need to move fields to make room for the middle school, Dill explained.

Over-enrollment at Carmel Valley Middle School and a growing population in Pacific Highlands Ranch meant greater demand and a re-evaluation of the property, and “the idea to combine the total acreage and shift fields … was born,” Dill said.

Therefore, “to accommodate a contiguous middle school campus which will straddle new and existing district-owned property,” $17 million of funds in the first draw for CCA is related to the relocation of fields, he said.

Specifically, the district will spend the $17 million to move four baseball and softball diamonds, one each for varsity and junior varsity. The work includes drainage, restrooms and concession buildings, seating around the baseball diamonds, dugout structures, backstops, fencing and general purpose fields for physical education and for field sports like soccer, lacrosse and field hockey.

Dill said the district hopes to begin this phase of field work this fall and complete it in 2014.


At San Dieguito Academy, the $27.7 million listed in this first draw includes $3 million for field work this summer, as reported last week. The remaining $24.7 million will be spent mostly on a new math/science building.

The $14.4 million to be spent on athletic fields and a multi-purpose room in La Costa Valley in Carlsbad is an interesting project, since the district has determined that, because of declining enrollment in Encinitas, there is no imminent need for a middle school there as originally planned when the land was purchased by the district in 1999.

Residents in that community protested loudly several years ago about the land sitting empty. Dill said the district approached the homeowners association about this idea to develop the land using bond proceeds and they were receptive.

He said constructing a multi-purpose room and athletic fields on the site is a good use of the bond money because an MPR can be for community use, after-school programs and adult education. And fields can be used by the community, for overflow from other nearby schools and for independent sports programs.

“This is bringing value to the overall community,” Dill said.

The payback ratio for this first draw, which includes no Capital Appreciation Bonds, is estimated to be no higher than 1 to 2.25, according to district documents. The interest is $200 million on the $160 million principal, for a debt service of $360 million.

The estimated costs associated with issuing this first draw come to $1,325,720. Dill said the costs of issuance are capped by law at 2 percent, and this comes to .829 percent.

Further, he said the amounts to be paid are not-to-exceed dollars, and the district is actively negotiating with all parties to further lower costs.

The biggest fees will be paid as follows (estimated amounts):

•$800,000 to bond underwriter De La Rosa & Co. of Los Angeles

•$135,000 to bond counsel DLA Piper of San Diego

•$85,000 to financial advisor The Dolinka Group of Irvine

•$70,000 for disclosure counsel Orrick Herrington & Sutcliffe of San Francisco

•$80,000 to rating agency Moody’s

•$60,000 to rating agency Standard & Poor’s

•$60,000 to the county for election costs

To oversee the Prop. AA projects, two more positions have been added to the four approved last month to join the in-house staff. On Feb. 7 the school board approved one new management position and resurrected an existing, currently vacant position.

The new position, Chief Facilities Officer, pays $122,012 to $140,768 annually. The existing vacant position, Director of Planning Services, pays $102,209 to $117,750 annually.

Under the terms of Prop. AA, property owners within district boundaries will be assessed about $25 per $100,000 in property value for about 40 years, through 2052, according to San Dieguito Union High School District documents.

—Marsha Sutton can be reached at