Fontana Unified School District BAN Repayment Options Analysis
Explore the four repayment options for Fontana Unified School District's Bond Anticipation Note (BAN), including pros, cons, and total costs. Options range from extending BAN payoff to repaying with issuance of Certificates of Participation (COPs) or Bonds. Consider the impact on the General Fund, property taxes, and bonding capacity. Which option would best suit the district's financial situation?
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Fontana Unified School District BAN Repayment Options
Option 1 Extend BAN Payoff for 2 years Bond Referendum (2013) PROs CONs Total Cost of Repayment Lower $12M in est. interest $118M est. new payoff (2014) Qualified/Negative Budget County Office of Ed. may not allow Potential impact on General Fund Higher levy on current property tax CABs w/o Successful Bond Referendum Bonding capacity may not be high enough
Option 2 Pay down Series A debt w/ Bond Funds Refinance Series A Issue $93M in Bonds Issue $11.7M in COPs PROs CONs Reduces current tax levy to $60/$100K To be repaid with Special Taxes (CFDs/Mello-Roos) Reduce Series A debt by an est. $4.2M $93M in bonds (CABs) General Fund still on the hook Repayment high (est. $469M)
Option 3 Repay $48M with issuance of COPs PROs CONs Reduced interest rate Require General Funds Revenue to pay-off Reduce approx. $3M in yearly operating expenses for 30 yrs. Requires County Office of Ed. approval Insufficient CFD revenue to pay-off $11.7M available through CFD s Total pay-off estimated at $91.5M
Option 4 Repay issue with $48M in Bonds Refinance Series A PROs CONs No threat to General Fund Does not increase current tax levy Callable in 10 yrs. 31 year repayment Reduce Series A debt by an est. $20M $48M in bonds (CABs) Repayment high (est. $216M) Assessed value increase maybe slow
