Buellton Union School District’s board of trustees will answer a million-dollar question on the evening of Feb. 16: How should Santa Barbara County’s taxpayers pay back the $3.2 million general obligation bond voters passed in June 2012?
The board has three options to choose from: An 11-year bond, a 19-year bond, or a 24-year bond. The longer-term options would levy a lower tax rate from county residents, but according to the district’s financial advisor Jon Isom, the short-term bond is a better deal for both the taxpayer and the district.
“From a taxpayer perspective, the difference between the two options is the shorter term is likely projected to save taxpayers about $1.2 million,” Isom told the Sun. “A secondary benefit to the district is that they’re able to achieve more proceeds for projects, so they’re able to complete more facility improvements.”
The bond in question passed as Measure V2012, and it aims to cover facility improvements, student access to computers and modern technology in the classrooms, additional energy efficiency improvements, upgrades to the school cafeteria, and an option to build new classrooms for early childhood education.
Isom said its primary focus was to improve energy efficiency via the district’s solar project, which involved the installation of solar panels at both the Jonata Middle School and Oak Valley Elementary campuses. According to Superintendent Randal Haggard, the solar project now covers all of the district’s energy needs.
“To be able to continue to move down that project list and complete more things for the community would be a great thing,” Haggard told the Sun.
After V2012 passed, the Board of Trustees voted to issue a bond anticipation note, which allowed the district to take out a loan and begin projects without yet collecting from taxpayers, who were still paying taxes on a different bond passed in 1992. Now that the 1992 bond is exiting the tax roll, it will be replaced by V2012.
Haggard said he anticipates the board will vote for the 11-year bond—a decision he would support.
“From my perspective, it looks like a win-win for the community,” he said. “We just want everyone to be aware this will mean an incremental increase.”
The three bond refinance options are laid out as follows:
• Option 1 would collect $5.9 million from taxpayers over a 28-year period, concluding in 2041. The tax rate would come out to about $45 per $100,000 assessed in value, and this option would provide $185,000 in additional funds for district projects.
• Option 2 would collect nearly $5.5 million over a 19-year period, concluding in 2036. Taxpayers would pay a rate of $56 per $100,000 assessed in value, and this option would provide $480,000 in additional project funds.
• Option 3 would collect nearly $4.7 million over 11 years, concluding in 2028. The levied tax rate would be about $63 per $100,000 assessed in value, and this option would provide $650,000 in additional project funds.
Isom compared the bond options to different mortgage options on a house—for example, a 15-year mortgage would require higher payments than a 30-year mortgage, but the shorter one would cost less in the long run once interest is taken into account.
For this reason, Isom said he thought the shortest-term bond option, or Option 3, was the best deal, echoing Haggard’s opinion that it would be a “win-win.”
“It’s more financially efficient, you’re saving taxpayers more money, and you’re getting additional fund dollars,” Isom said.
Haggard added that the bond oversight committee—which Haggard said has a “broad representation” of perspectives—supported the shortest-term bond option unanimously.
Though Haggard said he hopes the board will opt for Option 3, he is also concerned that the community might not be aware of what the short-term bond option could mean for them as far as taxes go.
“It’s hard to know how best to get that word out, because it’s complicated information,” he said. “It has such an impact on our taxpaying citizens in the community. I think it’s important that they be aware.”
The district’s board of trustees will vote on the bond refinance options on Feb. 16 at the board’s 7 p.m. meeting, located in the Jonata School library.
This article appears in Feb 16-23, 2017.