Gilroy, CA – Have you ever wondered what happened to the Gilroy Unified School District’s Measure E Bond Program that local voters approved back in 2016? Well, it should come as a happy surprise to voters and property taxpayers in the District that Measure E is ahead of schedule and well below budget.
The Tax Rate Statement provided to voters at the time of the 2016 election estimated that total debt service (principal and interest) for all the bonds would be $355 million. The actual total debt service for all three bond sales was $264,412,330, or over $90 million less than expected. In addition, Measure E’s last bond sale was scheduled to be sold in 2025. It sold in March 2021.
The District took advantage of very low interest rates due to the COVID-19 pandemic and overall economic uncertainty when it sold bonds on March 2. In addition to finishing the Measure E Authorization, the District also chose to refinance two series of old bonds that were previously sold in 2015. This 2021 refunding is projected to save District property owners approximately $1.7 million in reduced property taxes. This follows earlier refinancings in 2013, 2015, and 2019 that have now saved property owners a combined $82.7 million in taxes.
The original bonds were authorized by voters at elections held in 2008 and 2016 and were used to construct Christopher High School, as well as renovate and modernize aging classroom and libraries, improve fire safety and security systems, and upgrade electrical, heating, ventilation, roofing, plumbing, and technology systems throughout the District. This last bond sale will largely go toward the rebuild of South Valley Middle School as well as other needed capital projects throughout the District.
To give some context on how low interest rates have gone, one need only look at the 2015 bonds. Interest rates on the old 2015 Bonds that were refunded ranged between 0.30% and 3.54%. Interest rates for the new bonds are between 0.15% and 2.60%. The final payment of the new bonds will be August 1, 2046.
Gilroy Unified School District Superintendent Deborah A. Flores stated, “We are so pleased with the results of our most recent bond sale. To be able to deliver on our promise to our community by improving classrooms and schools throughout the district and to do so ahead of schedule and below budget is fantastic.” Assistant Superintendent of Business Services Alvaro Meza added, “Our timing was near perfect to lock in these historically low interest rates. To have Measure E come in $90 million below what we estimated to taxpayers is a huge win for all.”
The sale of Measure E bonds and the refinancing of the 2015 bonds was authorized unanimously by the Gilroy Unified School District Board at the February 11, 2021 GUSD Board Meeting. “It goes without saying that the last 12 months has been a challenge for school districts in California. We are happy to share some very good news for the Gilroy community, voters, and taxpayers with this successful bond sale,” added Board President Mark Good.
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