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The Pleasanton Unified School District Board of Trustees will be holding a special board meeting Thursday to discuss different options the district could pursue to pay off the $30,000,000 certificate of participation (COP) that helped finance the district’s new offices on West Las Positas Boulevard.
This discussion comes after the district recently finalized the sale of its Vineyard Avenue property, which netted the district a total of $30,394,115.
According to the July 10 agenda report, the board will be reviewing four different payment options before choosing one for staff to pursue. The options include plans to pay off the COP fully or partially using the Vineyard property sale fund.
If the board decides to move forward with one of the partial payment options, the district could retain portions of the fund and transfer some of that money into the district’s General Fund for one-time use.
“If an option is chosen that does not fully pay off the COP at this time, the board may choose in the future to pay off the remaining portion of the COP before the maturity date,” according to the staff report. “Funds from the sale of a future property or other one-time discretionary monies may be for that purpose.”
Back in June 2022, the Board of Trustees at the time approved the sale of a $30,000,000 COP to help pay for the new district headquarters located at 5758 and 5794 West 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 staff report. “The proceeds from the sale would then be used to pay off the COP.”
According to the report, the district’s COP payments during the last three years were partially offset by the lease payments PUSD received from the sole tenant currently renting a portion of the Arroyo Center, electron microscopy firm Gatan Inc. After 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 — following a two-year process where the original housing developer backed out leaving a new developer based in San Ramon to take over to build housing there — PUSD now has to decide how it wants to use the roughly $30.4 million to pay back the COP.
“The board now has the option to either pay off the COP fully or partially,” according to the staff report. “The board may consider partial payment to retain portions of the fund and utilize Education Code Section 17463.7 to transfer portions of the funds into the General Fund for one-time use.”
To that end, staff will be presenting the trustees with four different options to choose from on Thursday.
The first two options would see the district pay down the COP by $27 million with the first option allocating 3% of the funds from the sale of the property to the district’s reserves while the second option would allocate 4.95% to the district’s reserves. However, the first option would use about $23.7 million from the Vineyard property sale to pay down the COP while the second option would use about $19.4 million from the property sale to pay the COP down.
The remaining money to pay off the COP would come from a separate fund from the sale of the district’s Sycamore property. That means the first option would allow the district to transfer about $6.66 million from the Vineyard property sale to the General Fund reserve while the second option would allow the district to transfer just under $11 million to the reserve.
The third option on the table would be for the district to pay down the COP by $25 million — 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 final option staff will present to the board will be to pay off the entire $30 million COP by using $23.76 million from the Vineyard property sale and about $6.2 million from the Sycamore property sale. In this option, $6,663,000 from the Vineyard property sale would be transferred to the General Fund reserve.
The board’s open-session meeting is scheduled to begin at 2 p.m. Thursday (July 10). Read the full agenda here.
In other business:
During the closed session portion of the meeting, the board will be conducting a public employee performance evaluation for recently-appointed Superintendent Maurice Ghysels.
Ghysels was officially appointed as the district’s permanent superintendent for the next couple of years following a year-long search process after former superintendent David Haglund left the district early last year.
The teachers union will make a grab for the land-sale money. The board will agree. PUSD will find itself in yet another financial bind.
Not sure what you are talking about, but APT does not control the purse strings. The school board is advised by senior management, who for many years have made a string of horrible business decisions, and they comply. Meanwhile, teachers do without, pay for materials out of their own pockets, and continue to see their job get more difficult.
I’m not a teacher but an employee of the district. The board should NEVER have purchased this new facility. They should have done what they do to all of our schools…piecemeal fixes as needed. Would have saved millions of dollars. Not a good look for PUSD.