HUSD Governing Board hears its options for bond service
For the second time in six months, representatives from Stone and Youngberg gave the Humboldt Unified School District Governing Board options for either restructuring its outstanding bond debt or paying off a portion of that debt to lower the secondary tax rate.
On April 12, Mike LaValle from Stone and Youngberg explained the district's bond position, and presented a variety of options. LaValle noted that when HUSD voters approved the $41 million bond four years ago, the voter pamphlet indicated that the district would hold the secondary tax rate at 93 cents.
"The district did their best for four years. The secondary tax rate is up to $1.07 for 2010-11," LaValle said.
HUSD's total tax rate for 2010-11 is $4.42, which includes the secondary rate of $1.07 and the primary rate of $3.35.
At $4.42, the total tax rate is less than it was in 2007-08 when it reached a high of $4.59.
LaValle presented the board with seven options for the district's bond debt. The district has a current bond debt of about $5.4 million. LaValle's option took into consideration $4 million of that debt.
HUSD has the option of restructuring the bond debt, which would push the payments out farther, paying off a portion of the debt to lower the secondary tax rate, or any combination of the two.
If the district does nothing, and keeps the remaining bond money, LaValle estimated that the secondary tax rate would increase for the next three years, topping off at $1.43 in 2013-14, before starting to decrease for the next nine years.
Restructuring or paying off a portion of the debt would lower the tax rate by about 15 cents initially, but after two years, the difference would be about 5 cents.
LaValle's presentation was for discussion only, and the board took no action Tuesday evening.
However, LaValle told the board if it wants to restructure the bond service, it would have to act before July 1.
"You would have to lock in the rates by May or early June," he said.
After the governing board meeting, Vice President Howard Moody indicated that restructuring the bonds would allow the district to keep money in the bank to use for emergencies to district buildings. He said with the loss of state money for building renewal, the district would be able to use the bond money to repair buildings because that is a voter-approved expenditure.
In January 2010, the governing board approved spending $3.5 million in bond money for an aquatic center at Bradshaw Mountain High School. It remains to be decided whether the district moves forward with the construction of the aquatic center. The governing board created a bond committee subcommittee to work in the community and identify partners willing to help defray the operational cost of the aquatic center, which cannot be paid with bond money.
If the governing board decides to restructure or pay back a portion of its debt service, HUSD taxpayers would see a reduction in their secondary tax rate, not a cash refund.