CHUSD Bond Plans

By Mary Blyth Jones

Once again, Coalinga Huron Unified School District board members grappled with the prioritization of proposed projects approved for implementation through Measure R fund which voters approved in 2016. After discussion the vote was 3-2 favoring building in Huron first. Board members Francisco Chavez (H), Maria Zavala (H) and President Jonny Albrecht (C) voted in favor of the Huron projects while members Roger Campbell (C) and Lisa Culbertson also (C) voted to pay off the C.O.P. loans first.

“I just think our first obligation is to pay off the COP loans, like we told our voters we would,” said Culbertson.

Two weeks ago, CHUSD board approved selling more bonds at an earlier date to take advantage of low interest rates and lower cost of project completion. The question remained: which areas should receive top priority in funding.

In theory, all the projects will be tacked and completed. The question remained as to which should be addressed first.

One option was to spend the just over $6 million amount hoped to be raised by the sale of general obligation bonds. The first option was to begin a building project in Huron which encompassed both Huron Academy Career and Technology Education and Chesnut Continuation buildings. The estimated cost of this project is $5,832,000.

The second option was to pay off the certificates of participation (C.O.P.). C.O.P. is a financing agreement. It is often used by government agencies for construction or improvements to public facilities such as schools. Coalinga has an outstanding debt of $6,240,000 from former bond projects several years ago. That amount is the original principal.

CHUSD has been making interest only payments at the rate of $223,000 a year and will continue this rate until the end of the school year 2019-2020. In the fall of 2020, principal and interest payments will be approximately $550,000 per year with the last payment being made in 2034. There is no penalty for paying off the debt at any time.

The advantage of the first option is that the cost of projects may be lower if work is being done at the same time as modernization projects. Chesnut students will be relocated in a good building instead of being in deteriorating portables sooner, if the project is prioritized. There will be an estimated $408,000 balance available to cover cost overruns if necessary.

The disadvantage of this plan is that the general funds will have to continue paying for the C.O.P. debts.

The second option offers the advantage of saving CHUSD 223,000 per year until 2019-20. It would then save the district payments of $555,000 each year following. This would assist CHUSD achieving positive certification in the fifth year of a multi-year projection.

The disadvantage of this plan is that students at Chesnut School in Huron would have to remain in the portables for possibly seven more years instead of two. Maintenance funds would need to be used for needed upgrades to those portables to make them last for another seven years.

The district plans to sell the next set of bonds in April. At that point, staff will return a report to CHUSD board members and provide the final amount of the proceeds. The bond oversight committee will present their annual report to the CHUSD board in May.

Staff with then present bond construction contracts to CHUSD board for approval as the bids come in. Bond contracts for equipment purchases to be used in the modernization projects will be brought forth for ratification at the April meeting.

Overall, there are seven modernization approved projects for the funds. Modernization of Huron Elementary School, Bishop Elementary School, Sunset Elementary School, and Coalinga High School are all on that list. Also on the list is HVAC/chiller modernization for both Coalinga and Huron Middle Schools. Bishop Elementary School needs a new roof, and the district bus barn will also be repaved.  The total for all proposed projects is $11,934,512.84.

There are four new construction projects approved by CHUSD board members which were attached to Measure R funding. One classroom at Huron Elementary School will be added. One classroom at Bishop will also be added. At Dawson, and Sunset Elementary schools there will be a classroom. Finally, building a new Coalinga Academy with CTE and farm is planned at the site of the original school farm.

Corrections or changes should suggested via coalingapress@gmail.com. Thank you.

 

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