By a 4-3 vote, Morgan Hill Unified School Board trustees have
approved a resolution to refund a general obligation bond passed by
voters in June 1999 to build Barrett Elementary School, Sobrato
High School and to renovate Live Oak High School.
Morgan Hill – By a 4-3 vote, Morgan Hill Unified School Board trustees have approved a resolution to refund a general obligation bond passed by voters in June 1999 to build Barrett Elementary School, Sobrato High School and to renovate Live Oak High School.
The refunding will bring in an estimated $10 million to the district.
Renovation of Live Oak was never completed, though the district has spent $24 million to date on improvements including a new practice gym and library, a new track and field, plus a total modernization of several classroom buildings.
But the list of additional refurbishing needed is lengthy, with items ranging from a new security system to the complete makeover of the boys’ locker room.
The trustees had discussed refunding the bond as a way to bring in more money for work on Live Oak, as there was approximately $4 million remaining in the bond, plus an additional $3 million available once Sobrato was completed.
The available $7 million would not be enough, however, to complete the proposed renovations. With the refunding, trustees would have more than $17 million to finish refurbishing the school.
Although no cost estimates have been completed for the remaining projects, according to Deputy Superintendent Bonnie Tognazzini, the scope of the projects can be based on the money available for them.
Trustee Shelle Thomas is worried the district will not have enough money to complete all the renovations necessary.
“My concern is that we don’t know what the costs are,” she said. “Will the $17 million be enough? We are caught in the same catch-22 that we were caught in before, without setting a budget and setting parameters. Taxpayers need to have clear idea how this money will be spent.”
Trustee Julia Hover-Smoot is concerned that the housing “bubble” will burst, and that will affect how the bond is paid back.
“(The home valuation) that has increased over the past six years, that probably will never occur again,” she said. “I just don’t think that’s going to be sustainable.”
If the trustees voted to approve the refunding, Hover-Smoot said, they should consider one of two other options, which would bring in less money to be used for Live Oak High but would be easier on taxpayer pockets.
But trustees favored refunding using the option that offered the highest yield.
According to estimates, the projected tax rate beginning fiscal year 2006-07 would be $65.73 per $100,000 of assessed value. The refunding with this option would reduce the bond’s term by six years, to 2020, reduce the average life of the bond 3.3 years to 8.5 years, and reduce the aggregate debt service by $1.1 million.
School Board President Mike Hickey and Trustees Peter Mandel, Kathy Sullivan and Don Moody chose this option. Trustees Amina Khemici, Thomas and Hover-Smoot voted against it.
“I’m voting no because greed is getting in the way of common sense,” Hover-Smoot said.
The three said they had concerns about the burden on taxpayers.
Trustees could have also raised tax rates by $4 per year until the rate reached $65.73 per $100,00 assessed value and garnered $7.5 million for the district and by $2 per year until it reached $65.73 which would garner $6.4 million for the district to spend on Live Oak.
Thomas made a motion to remove the refunding item from the agenda and move it to the June 27 agenda to gather input from the community.
Moody and Khemici supported that motion; the remaining four trustees didn’t, so the motion failed and trustees acted on the refunding.
Moody said while he was willing to wait two weeks, to allow for public comment, and voted with Thomas and Khemici to wait, he believes the refunding will be a positive move for the district.
“I think this is a good thing and the reason for that is that I really want to see Live Oak finished, and quickly, before construction costs go up higher,” he said. “I just don’t feel good about Live Oak not being completed. I think I would have felt better to get more input to make sure that the taxpayers felt fine with it, but once majority ruled on that, we had to move forward. We are in this position to do what’s right for our kids.”
