Facing a fiscally uncertain future, Pleasanton Unified School District will explore the potential benefits and pitfalls of issuing a $15 million tax and revenue anticipation note (TRAN) and hear an update on district retirement benefits at the Board of Trustees regular online meeting Thursday, starting 7 p.m.
Similar to a traditional bond, TRANs are short-term loans for school districts that can be used to fix a cash flow problem when expenditures are needed before tax revenue is received.
Deferred state funding and PUSD's share of property tax collections are expected to create "a cash flow shortfall during fiscal year 2020-21 created by timing differences between its anticipated expenditures and estimated receipt of revenues," according to public documents.
To offset financial impacts, the district would participate in the California Education Notes Program, which offers "slightly lower" underwriting costs compared to other pools, and "pledge a portion of the revenues expected to be received by or accrued to the district during fiscal year 2020-21 to the repayment of the TRAN."
Officials added, "However, the TRAN will be a general obligation of the district payable from its General Fund, and to the extent pledged revenues are not available, the TRAN will be paid from other legally available moneys(sic) of the district."
Program participation would market the district's TRAN with those of similarly-rated school districts. PUSD also won't be obligated to pay the TRANs of other districts participating in the program, nor will they be liable for districts that fail to pay their own TRAN.
The Board will also take a closer look at a mandated actuarial study on the district's long term debt associated with retirement benefits just before the TRAN public hearing Tuesday.
Prepared by a San Diego-based consulting firm, the report lists the district's total liability for accrued Other Post Employment Benefits (OPEB) including medical and dental plans at $22,318,146.
To mitigate their liability, staff said the district can "take steps" by establishing an OPEB Trust, which the district's Fund 20 OPEB has around $6.7 million for such use. The idea has been reviewed and is recommended by the Finance Subcommittee, according to staff.
A resolution to establish a trust with the California Employers' Retiree Benefits Trust Program (CERBT) will be brought to the Board next month.
In other business
* The Trustees will consider approving a $180,008 contract for field renovation work at Harvest Park and Hart middle schools on Tuesday.
Last month, district facilities and construction staff issued an informal bid notice for work at the sites. Bid notices were also posted for Hearst and Vintage Hills Elementary, and Foothill and Amador Valley high schools, all seeking prepared bids for turf field improvements.
The district received an over budget bid for the high schools, three bids for Hart and Harvest Park, and four bids for Hearst and Vintage Hills. Two bids for the elementary schools were rejected due to incomplete documents, while the next lowest bidder was over budget.
Staff has recommended approving the $180,008 agreement with Westside Landscaping and Concrete for field renovations at Hart and Harvest Park, and rejecting all other bids for the elementary and high schools.
Work will be completed using routine restricted maintenance funds.
* The Trustees are set to increase funding to add one building to the portable replacement and new science building project at Foothill High.
The Measure I1-funded project has been in the works for several years and underwent several recent design amendments.
During the project's initial design phase, "a concept for a second two story building was developed in relation to a second CTE grant application for the Engineering Department." However, the grant was not approved and drawings for the second building were unfinished due to lack of funds.
To realize the project's early vision of two buildings for science, engineering and computer instruction, funding sources were explored such as Measure I1 bond revenue -- which does not include enhanced scope for CTE Health Science and Medical Technology (HSMT) and Engineering -- and possibly CTE state funding.
PUSD ultimately applied for the grants but only received a $3 million HSMT grant from the state; the district expects to receive the grant money "some time in 2021."
The CTE application for the Engineering grant has since been accepted, and the district also said bids for the construction at Foothill -- as well as Amador Valley, where a similar project is planned -- came in approximately $2.8 million under budget.
Because of the under budget bids and grant funding, staff has recommended increasing the project budget by $349,108 and adding the second building.
The second building is slated to include 2,900 square feet for an engineering workshop that "will resemble a maker type with roll up doors for increased collaboration," as well as a science prep room, department office, support spaces, restrooms, and storage.
Design is expected to take approximately two years, with the building opening by fall 2022, one year after the first building is completed.
* A little more than $53,000 will be credited to the Measure I1 fund, should the Board approve a change order to HVAC and roofing work at Alisal Elementary and Harvest Park Middle.
In April, the Trustees signed off on construction work at both sites, but the controls systems had already been upgraded.
The contracting included an allowance for unforeseen conditions; because the allowance was not completely spent,a total savings of $53,186 will be returned to the district.
* A lease for portable buildings at several school sites is also up for an additional year extension.
A total of 28 portables are currently being used at seven PUSD campuses: Foothill, Amador Valley, Hart, Harvest Park, Fairlands, Valley View, and Vintage Hills. Staff has recommended approving the lease extension at an annual cost of $249,972 -- most of the cost ($235,000) would be paid by district Fund 25 and the Kids Club Fund.