School District Considers Bond Measure

As school districts all over the country look for ways to manage bare bones budgets, one option being considered by Ramona administrators and trustees is a school bond.

The Ramona Unified School District board and top administrators met May 9 with two financial advisers to discuss the possibility. No action was taken at the workshop.

“We haven’t really had a chance to look at our long-term financial health in quite a long time,” Superintendent Robert Graeff said.

Jon Isom, managing principal of Isom Advisors in Walnut Creek, and Mark Farrell, managing director of Piper-Jaffray in El Segundo, led the workshop. They specialize in public finance investment banking.

“Our job is to solve your problems and to do it in ways to save the district money," Isom said. "We represent school districts. Our loyalty rests with the school districts and nobody else.”

Trustees Rodger Dohm, Bob Stoody, Dan Lopez, Kim Lasley and Dawn Perfect attended the workshop, along with the superintendent and assistant superintendents Joe Annicharico, David Ostermann and Cathy Pierce.

Discussion centered on the feasibility of a bond, which would require 67 percent approval by voters.

Before it gets that far, Isom’s company would do a pre-election survey among Ramona’s registered voters to assess if a bond issue stands a chance. If it receives enough favorable comments, the earliest a bond would appear on a ballot would be June 2012.

Isom's company works with districts throughout the state.

“The challenges you are facing, obviously, you are not alone,” Isom said. “The vast majority of the districts throughout the state are really struggling and facing tough times.”

Isom said that in the school districts he has worked with over the past 25 years, there has been a 90 percent success rate for getting bonds passed. His company provides three services: pre-election surveys to determine if the community is supportive; election process assistance during the campaigning stage; and financial advisory services for the bond program, once the election passes.

If the bond does not pass, Isom said his company would not charge for any of its services. The district would only incur the costs of hiring any outside agencies, such as for conducting the survey.

Isom said the voters’ attitude toward the district is the most important thing to consider should the trustees approve moving forward with a bond issue.

“When you do pre-election (plans) effectively, then we already know what (the voters) are willing to support,” he said.

If the bond passes, the financial advisers would help the district sell the bonds.

The district, with board approval, would decide how much money would be needed overall and this could be spread out over several decades. The rate to the taxpayers is based on the assessed value of each property owner’s house. Isom estimated the tax rates would be $45, $50 or $60 per each $100,000 of the value.

Isom expressed his views on how the amount of the bonds should be determined. First and foremost, he said, should be improvements to the schools. The average age of the schools in Ramona is 35 years. The district office was built in 1936.

Second would be getting immediate relief for the general fund, and third, funding long-term plans.

“There is some flexibility that needs to be built in with your ability to pay down or reduce the debt,” Isom explained.

Farrell brought up the importance of getting started soon after the election.

“Your voters are going to want to see projects being done quickly after you pass the bond,” Farrell said.

Graeff said he would have discussions with the board members to determine what the next step should be and if they want to proceed with a bond issue.