District to decide how much refunding will affect homeowners
Morgan Hill – School Board trustees Tuesday unanimously passed a resolution to refund a 1999 bond by raising the assessment back to a level close to what was originally passed by voters, but a decision hasn’t been made exactly how much taxes will increase for homeowners.
The revenue from refunding the $58 million bond will cover as much $8.6 million in renovations at Live Oak High School.
No decision has been made yet on how the transaction would be structured, but the district will soon decide on one of three scenarios that could generate as much as $8.6 million to $4.5 million. That decision will come after the financial “team” presents its recommendation to the board.
The financial team will consist of Deputy Superintendent Bonnie Tognazzini, the financial advisor, an underwriter and co-underwriter and a legal counsel that was described as the “leading bond counsel for school districts for the state of California, particularly for these types of situations” by Bruce Kerns of Stone & Youngberg LLC, the underwriter for the bond.
If the team presents the same set of options the board saw during their special meeting Jan. 19, they could choose between raising as much as $8.6 million or as little as $4.5 million net revenue from the refunding. The board voted based on the three scenarios presented, but the team could return with other financing options.
The average bill for taxpayers in the Morgan Hill School District, according to the Santa Clara County Office of the County Executive, is $5,581.96. The district’s bond costs taxpayers $47 per $100,000 of assessed land value on average – roughly 5.5 percent of most residents’ tax bill.
Local resident Leah Gregg said she is against having her taxes raised. The district can initiate this increase without public support because voters already passed the bond and they are not raising the assessment above what was already on the ballot.
“We pay a huge, huge amount of property tax,” Gregg said. “We would say that for us, it wouldn’t be something we would want. And it would not benefit us, particularly, as we will send our children to private schools.”
She did admit that a good school system could keep property values high.
“I would definitely say that a good school system would bring more people into the area, influence people to buy homes,” she said. “To a certain degree, I think you would see more people wanting to move in.
Elisheba Gutierrez said she also feels property taxes are already high.
“I understand that we need to fund the schools, and I guess that would be okay, but we do pay a lot of taxes,” she said. “But when our daughter gets to high school, we’ll be putting her in private school, so she won’t be going to Live Oak.”
Tognazzini said the district has roughly $4 million left from the original bond issue to spend on Live Oak. With the refunding more than $12 million could be available for Live Oak renovations, enough to completely finish the project.
Trustee Peter Mandel said Tuesday that he had recently walked the Live Oak campus with Al Solis, director of construction and renovation for the district, and Solis estimated the project could be finished for about $10 million.
“But the longer it takes us to get it done, the more it’s going to cost us,” Tognazzini cautioned, referring to the rising costs of construction.
Trustee Shelle Thomas said she is cautious in her support for the refunding. She said she wants to make sure the district doesn’t repeat past mistakes in managing construction projects. But, she added, she wants to fulfill the promise made to voters when the bond passed in 1999.
“I really have a commitment to Live Oak High School,” she said. “The reason I would buy into this is I don’t know where else to find the money to do what we need to do.”
Trustee Don Moody agreed with Thomas that funds raised by the refunding should be used only for Live Oak renovation. The refunding could be applied to any of the projects voters originally approved the bond for – Live Oak renovations and the construction of Barrett and Sobrato.
“My comment is that I like Shelle’s suggestion,” he said. “I look forward to crafting it (a resolution supporting the refunding) so it is specific to that school.”
Board President Mike Hickey said Friday that he believes the board will move forward with one of the options the team will present.
“Anything can happen; I would think the board would be able to back out prior to telling them to go ahead and refinance, but I believe that in telling the staff to go forward with it at this time, we will decide on an option,” he said. “Based on comments made, there are a few (trustees) more reluctant than others, but I believe as all the numbers are brought before the board, and we have a discussion on it, we’ll find an option we agree on.”
To contact trustees
By phone: Call the superintendent’s office, 201-6001, and leave a message for the trustee;
By fax: Fax comments to trustees via the District Office at 778-0486;
By e-mail: Visit the district’s Web site, www.mhu.k12.ca.us, click on “Board of Education,” then “Meet the Trustees,” and click on the name of the trustee to send them an e-mail.
