Supervisors approve BUSD refinancing bonds

On April 22, the Bonsall Union School District board approved the refinancing of outstanding bonds at a lower interest rate. Because the offices of the county's Treasurer-Tax Collector and the county Auditor and Controller are involved in the collection and payment process, the refinancing also needed San Diego County Board of Supervisors approval, but the county supervisors voted 5-0 May 12 to designate the Treasurer-Tax Collector as the paying agent and direct the Auditor and Controller to maintain the taxes on the tax roll.

The supervisors' approval allows for up to $7,500,000 of re-funding bonds to be issued to replace existing bond debt obligation.

In November 2005, the voters of the Bonsall Union School District authorized the issuance of $17 million of general obligation bonds for the repair and rehabilitation of Bonsall's public schools and the construction and acquisition of classrooms and other facilities. The bonds were sold in 2006 and 2007, and the remaining principal and interest payments are being generated by a property tax assessment on Bonsall landowners. The bond debt obligation was transferred from the Bonsall Union School District to the Bonsall Unified School District when the district transitioned from a K-8 elementary school district to a K-12 unified district in 2014.

The April 22 BUSD board action authorized the issuance of up to $7,500,000 in re-funding bonds contingent upon a market interest rate which will provide a net savings of at least 3 percent in addition to covering the cost of issuance. Dale Scott & Company, the financial advisory services consultant hired by the district, estimates that the net interest savings from refinancing the general obligation bonds would be $487,000. The $682,000 in gross savings would be offset by a $195,000 issuance cost consisting of the $75,000 financial advisor fee, $55,000 for underwriting costs, $35,000 for bond and disclosure counsel, $10,000 to establish a credit rating for the school district (although the former K-8 Bonsall Union School District had a credit rating, the new unified district does not yet have a credit rating), and $5,000 for miscellaneous expenses.