SAN FRANCISCO - At least three school districts in California plan to ask voters next March to approve more than $350 million in bond measures, marking the beginning of what market participants expect to be an avalanche of bond requests now that measures are easier for districts to pass.
A $102 million general obligation bond measure will go before voters in Orange County's Placentia-Yorba Linda Unified School District, while Anaheim City School District will ask voters to approve a $111 million measure. Vista Unified School District in northern San Diego County seeks approval of a $140 million measure.
Bankers and financial advisers who work with school districts expected that the districts would put bond measures on the March ballot to take advantage of Proposition 39. Approved last November, Proposition 39 allows school GO bond measures to pass with only 55% of voters approving instead of the previously required two-thirds majority.
In exchange for the lower threshold, districts can only pass this type of bond during statewide primary and general elections in even-numbered years, and regularly scheduled local elections, usually held in the first week of November in odd-numbered years. The law also requires that the referendum specify what projects bond proceeds will be used for, limit debt service levels based on assessed valuation and mandate strict oversight over the spending of bond funds.
More than 20 school districts are asking voters to approve a collective $2 billion in measures on Nov. 6.
The March primary election, however, will be the first opportunity for every district in the state to hit up voters for projects. Districts must tell county election officials by Dec. 7 of their intentions to put a measure on the March 5 ballot, according to John Hartenstein, an attorney at Orrick, Herrington & Sutcliffe.
Several district boards may decide to take the required action just before Thanksgiving to avoid a holiday crunch, he said.
School bond measures are expected to draw substantial voter support despite of the weakening economy and the events of Sept. 11, according to Rod Carter, a senior vice president at Sutro & Co.
"A number of districts have done surveys since the tragedy and still see strong support for their measures," Carter said. "Some support is waning but there is still more than enough."
Sutro is working with five community college districts across the state, each considering March bond measures between $150 million and $200 million.
On Nov. 13 North Orange County Community College District trustees plan to decide whether to place a $239 million measure on the March ballot. Salomon Smith Barney Inc. would be the underwriter.
Districts may take action soon to give voters plenty of time to learn about the measure and the projects, Hartenstein said. However, some districts might delay a board vote because once the election is called they must adhere to limits on spending public funds to promote the measure.
"Before the election is actually called, there's no real legal constraint against spending," Hartenstein said.
For example, officials may spend district funds on a poll to gauge voter opinions before going forward with the measure. After an election is called, an outside group must do all the campaigning.
If the Vista School District measure passes, the district will use proceeds to build two high schools, a new middle school, six lower-grade schools, and fund several modernization projects, said Mike Vail, assistant superintendent.
The district needs the new schools to relieve overcrowding. About 60% of its classes are held in portable rooms and students are on one of the most severe multi-track year-round programs in the state. Because of that, they attend class fewer days per year than most schools.
The district will also use proceeds to build a charter school for a decade-old academy. The facility will belong to the district, and be available for district use if the academy can't fill it, according to Vail . The district can use a portion of state funds it's eligible for to fund the facility.
"What we're doing for the academy, we could be doing for ourselves," he said. "We think it's a strong program and a good thing for parents in our community to have an option."
Placentia-Yorba Linda desires to relieve overcrowding, since about one-third of its students are in portable classrooms. Bond proceeds would build five new schools and provide needed renovation at all of the district's other schools, 90% of which are more than 25 years old, according to the district.
The Anaheim district also needs to relieve substantial overcrowding.
All three districts expect a high percentage of matching funding from state school bond proceeds, but California is quickly running out of funds authorized under 1998's Proposition 1A. State lawmakers this year declined to pass a new bill to put a similar referendum to statewide vote but plan to try again during the next legislative session in January.
