Dublin Schools Inch Closer To Selling Measure J Bonds

DUBLIN, CA — Dublin school board members Tuesday night took an important step toward the sale of Measure J General Obligation Bonds approved by voters last year.

The action comes at a critical time for the district, which has several capital projects underway — including the construction of the new Emerald High School in east Dublin — but not enough money to pay for all its expansion and modernization plans.

Read: Why DUSD Is Struggling To Pay For School Projects

Since the principal and interest on the district’s general obligation bonds are paid with property taxes, it’s important that tax amounts related to the bonds are included on annual tax bills. Every August county officials establish tax rates that will appear on tax bills generally to property owners in September.

In cases where the district expects to sell bonds after tax rates have been set, state law permits it to ask the Alameda County Board of Supervisors and county auditor to include the increased tax amount in anticipation the bonds will be sold during the tax year. This permits the tax to be included on bills for the 2021 to 2022 fiscal year, which begins July 1, and ensures money will be available when the first debt service payments are due in February if the bonds are actually sold.

The tax rate on Measure J bonds is estimated to average $50 per every $100,000 of assessed valuation. Owners of a home assessed at $700,000 would see $350 in additional tax.

State law prohibits school districts of Dublin’s size from selling bonds with an aggregate outstanding principal balance greater than 2.5% of the assessed taxable value of property within its boundaries.

This restriction stalled the sale of any Measure J bonds without a waiver from the State Board of Education which the district received last month, its second waiver in the past four years.

Faced with a similar situation in 2017 the District obtained a six-year waiver raising the debt limit to 3.1% of its then $14.8 billion assessed valuation and permitting the sale of all $283 million in Measure H bonds approved by voters in 2016. Currently the district has approximately $524.1 million in outstanding bonds.

The new seven-year 3.39% waiver increases the District’s debt limit to $652.6 million, allowing it to sell all $290 million of Measure J bonds. Coupled with additional state funding the district expects to have enough money to pay for its entire capital program, although its facilities planning is presently being reviewed.

Chris Hobbs, then-Interim Assistant Superintendent of Business Services, told Patch last month the initial sale of $116 million in bonds, now expected in September, will be followed by two other planned sales — $87 million in 2023 and $87 million in 2026.

In addition to bond proceeds, Hobbs told Patch the District has several other applications totaling $18.9 million pending for state matching funds.

Proceeds from the first sale of Measure J bonds are expected to have $3 million earmarked for technology projects and the remaining $112.7 million for construction costs.

Hobbs, who was formally appointed Assistant Superintendent of Business Services at Tuesday’s meeting after serving in an interim capacity since last September, said the board will be asked to approve the bond sale at its Aug. 8 meeting.

— Patch Special Correspondent Bob Porterfield contributed to this report

Correction: An earlier version of this story misstated the name of the Alameda County Board of Supervisors.