|
Getting your Trinity Audio player ready...
|
The Pleasanton Unified School District Board of Trustees unanimously agreed this month to use millions of dollars primarily from the sale of the district’s Vineyard Avenue property to pay off the majority of a $30 million certificate of participation (COP), which helped finance the district’s new offices on West Las Positas Boulevard.
The board also agreed to transfer $11 million from the finalized property sale, which netted the district a total of $30,394,115, into the district’s general fund reserve fund, according to Lanita Villaseñor, executive assistant to the superintendent and school board.
“This option was selected as a balanced approach that significantly reduces long-term debt while preserving $11 million from the property sale for one-time General Fund reserves,” Villaseñor told the Weekly. “It aligns with the district’s strategic goal of maintaining fiscal stability and avoids zeroing out the property fund which may be needed to progress in vacating the surplus Bernal property.”
Back in June 2022, the Board of Trustees at the time approved the sale of a $30 million COP to help pay for the new district headquarters located at 5758 and 5794 W. Las Positas Blvd., which ended up costing the district almost $23.5 million. The remaining funds from the COP were used to make necessary improvements to the facility.
A COP is a type of financing where an investor purchases a share of the lease revenues of a program and the future tenant payments pay for the space and any future renovation and construction projects.
“The Certificate of Participation (COP), a district-level financing tool, was structured so that for the initial three years, the district could make the minimum interest-only payments until the Vineyard property was sold,” according to the July 10 special meeting staff report. “The proceeds from the sale would then be used to pay off the COP.”
Over the last three years, PUSD’s COP payments were partially offset by the lease payments the district received from the sole tenant currently renting a portion of the Arroyo Center, electron microscopy firm Gatan Inc. Once the COP is paid off, the revenue from those tenant payments will go to the district’s general fund.
After the district completed the sale of the Vineyard property on June 24 — a San Ramon-based developer is set to build housing and a park at the property — the board was tasked with deciding how to use the roughly $30.4 million to pay back the COP.
During a special board meeting on July 10, the trustees reviewed four different options and plans for how to pay off the COP using money from the Vineyard property sale fund and from a separate fund that came from the sale of the district’s Sycamore property.
Instead of fully paying off the COP using money from both funds — which was one of the four options — the board unanimously supported the option to partially pay down the COP by $25 million by using about $19.3 million from the Vineyard property sale and the rest from the Sycamore property sale and to transfer $11 million to the General Fund Reserve.
“The set-aside amount represents 5% of the district’s 2025–26 budget expenditures and is consistent with Education Code Section 17463.7,” Villaseñor said. “Further Board action and approval from the State Allocation Board are required to formally transfer these funds into the General Fund.”
Some of the other options that were presented to the board during the July 10 meeting included paying down the district’s debt by $27 million and setting aside varying amounts to the general fund reserves. The option that the board unanimously approved includes the highest amount of money being set aside to the reserve fund out of all four options.
According to the July 10 special meeting staff report, the board may choose in the future to pay off the remaining portion of the COP before its maturity date.
