State OKs Dublin Schools Plan To Sell Bonds, Raise Debt Limit

DUBLIN, CA — The Dublin Unified School District got good news Wednesday in its quest to fund major school construction projects and overcome a projected shortfall of at least $184 million.

The state Board of Education gave a green light to the school district's plan to sell $290 million in Measure J general obligation bonds. It approved a waiver of the district’s debt limit, which restricts the amount of new debt the district can incur to finance school modernization and construction. The shortfall was first revealed in a January community notice.

The action means the school district can go head and sell the bonds authorized by voters last year to pay for the district’s facilities expansion program, which includes construction of a new middle and high school.

School board members had planned to consider a resolution authorizing the immediate sale of $116 million in bonds, with $112.7 million earmarked for school facilities projects and $3 million for technology projects. But that action was removed from the agenda at the last minute.

Board President Dan Cherrier said the matter would be reconsidered at a future meeting.

State law prohibits districts of Dublin’s size from selling bonds with an aggregate outstanding balance greater than 2.5 percent of the assessed taxable value of property within its boundaries, a limit that can only be increased by the state board.

The state’s waiver increased that limit to 3.39 percent of the district’s current valuation of $19.2 billion, permitting the sale of all Measure J bonds over the next several years. In addition to the bond sale that was planned for this month, the district expects to sell $87 million in 2023 and another $87 million in 2026.

This is the second waiver the district has received in the past five years. In 2017, the state authorized raising the limit to 3.1 percent to let the district sell $283 million in bonds authorized by voters in Measure H in 2016.

Currently, the district has some $524 million in bond debt outstanding, to be repaid over the next 20 to 25 years from property and parcel tax revenue. Last year, the district made principal and interest payments on these bonds totaling $30.4 million.

The school board earlier approved a $130,000 contract with an accounting firm to conduct a forensic audit of the district. Eide Bailly LLP, a North Dakota-based international accounting firm with a San Ramon office, will investigate why the school district was so far off in its initial estimates for the planned construction projects.

The school board approved a forensic audit at the urging of board Vice President Megan Rouse, a certified financial planner, even though her colleagues expressed a desire to focus instead on correcting the shortfall.

— Patch Special Correspondent Bob Porterfield contributed to this report

See also:

Why DUSD Is Struggling To Pay For School Projects

DUSD Reports At Least $184M Shortfall On School Facility Projects