The Bond Measure Passed, But Notes Still Haven't Been Issued

Plans to start raising cash for the school district’s Measure J bond improvement program were thrown off course Thursday night when three board members voted against a resolution to begin selling bond anticipation notes.

The board has been working toward this point since November, when South San Francisco voters , a measure that authorized the district to sell up to $162 million in bonds to fund physical and technological updates to school facilities. Now the board is getting ready to actually sell the notes, which will bring in cash and allow the district to start the first part of the improvement project, installing solar panels at district schools.

But the board was split on where to set the monetary cap for the first round of notes. The resolution before the board would have allowed the district to sell up to $45 million worth of notes. But Trustees Liza Normandy, Shirley Hoch and Judy Bush preferred a ceiling of $30 million, which had been the amount given in a presentation by the bond financial advisor at the board’s meeting last week.

“From experience, if the district has money to spend, they will spend it,” Hoch said. “And until we have a list of priorities, I don’t want to put the money out there because everyone will have their pet projects.”

Implementing the solar plan to install panels on school roofs and in parking lots will cost about $28 million in bond money over the next 10 months, said Assistant Superintendent Jonathan Barth. Weise, who sits on the facilities subcommittee, said it’s important to set a higher cap to allow the district flexibility as it embarks on improvement projects.

“The last thing we want to do in a bond project is run out of money,” Weise said. “We don’t want to be in a position where we have a bunch of projects underway and we don’t have a way to pay for them.”

Representatives from Keygent Advisors, the bond financial advisor, had recommended that the district sell bond anticipation notes at this time, rather than bonds, to wait out a tough bond market. The notes have a lower interest rate and can be paid back with bonds at a later date. The intention is to pay back the notes within a year, but if the bond market doesn’t pick up, the notes can be rolled over for up to five years.

“We’re looking at an insurance policy: it’s $15 million the district will have in flexibility come February should the market not look good for bonds,” said Board President Maurice Goodman.

Setting a $45 million cap wouldn’t obligate the district to sell more than $30 million in notes and wouldn’t affect the interest rate paid on the notes.

Hoch suggested compromising with a cap at $33 million, but wasn’t able to introduce a new motion under parliamentary rules. Goodman called for a vote on the resolution with the cap set at $45 million. He and Weise voted in favor, but they were outvoted by Hoch, Normandy and Bush. The motion failed.

“Congratulations,” Weise said.

After a short break, board members tried to work toward an agreement and found themselves wrestling with parliamentary procedure.

Under Robert’s Rules of Order, members weren’t allowed to introduce new non-agendized items. So Bush asked Weise to amend his original resolution and set the monetary cap for notes at $30 million. Weise refused, suggesting a cap of $35 million.

Unable to agree, the board scheduled a special meeting for 8 p.m. on Friday to vote again on issuing bond anticipation notes. Work on the solar plan can't begin until the district has the money in hand.

The conflict frustrated some community members in the audience, who had come to a meeting that was scheduled as a community forum.

“Now my temperature is rising,” said Bonnie Orendorff. “All I can do is speak as a teacher where there hasn’t been enough money. There’s not kick stoppers on the doors. There’s no light fixtures.”

The board will meeting Friday night at 8 p.m.