At the May 6 special meeting of the Governing Board, trustees discussed selling a fourth series of bonds through Proposition R. The amount of the bond sale—Series D—is not to exceed $135 million.
As required by Education Code and Assembly Bill 182, the Governing Board discusses all elements of the bond sale in two consecutively scheduled public board meetings. Included in the discussion are the types of bonds being sold—current interest bonds and capital appreciation bonds.
The Governing Board reviewed Exhibit B of the resolution which illustrated two scenarios for the bond sales—one with a mixture of current interest bonds and capital appreciation bonds and one with current interest bonds only.
The college district’s underwriters, Piper Jaffray, and financial advisor, KNN, predict that under current market conditions that a sale with a mixture of current interest boards and Assembly Bill 182 compliant capital appreciation bonds could yield up to $122 million.
Assembly Bill 182 provides strict regulations for school and college districts seeking to sell capital appreciation bonds. Those regulations include annual interest rates that do not exceed 8%; ratio of total debt service to principal to not exceed 4 to 1; that they are callable; and maturity dates no greater than 25 years.
The Governing Board is seeking input regarding this resolution before it votes on May 13. To ask questions or provide your comments, please fill out the form at www.swccd.edu/PropRquestions
A PowerPoint that provides illustrations of the repayment schedule can be accessed here. Additional documents available for review include the purchase contract and the preliminary official statement that outlines all the details of the property values and tax rates within the district.
The Governing Board will meet on May 13 at 7 p.m. in Room 214 on the Chula Vista campus.