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Financial advisor briefs board on El Segundo Unified general obligation bonds and tax implications
Summary
Piper Sandler representative reviewed the district's outstanding general obligation bonds, assessed valuation trends, tax rates and past refinancing savings; board members asked clarifying questions about tax-rate calculations and timing.
The board received an overview of El Segundo Unified's general obligation (G.O.) bonds during a Feb. 11 presentation by Jin Kim of Piper Sandler, who described how bond taxes are levied, what bond proceeds may fund and the district's current bond ratings.
Kim explained that G.O. bond tax levies are based on assessed value rather than market value, and that bond proceeds can be used for capital projects such as modernization, new classrooms and administrative upgrades but cannot be used to pay for salaries, pensions or routine operations.
Using the district's recent data, Kim said Chevron accounts for roughly 30% of the district's assessed valuation and that measured assessed-value growth has outpaced the planning assumption for Measure ES. He reported a combined current tax rate of about $81.10 per $100,000 of assessed valuation across four bond measures and illustrated the difference between a homeowner's market value and assessed value with a sample homeowner: market value cited at $2,100,000 and an assessed value of $780,000 used for tax calculations.
Kim also described governance and fiscal stewardship steps the district has taken: periodic refinancing that the presenter said delivered about $1,600,000 in taxpayer savings and credit ratings at the "double A2" and "double A minus" levels from rating agencies, which he said reflect stable governance and management.
Board members asked for clarification about how tax rates related to bond sizes and maturities; Kim explained that communities sometimes accept higher tax rates for shorter repayment periods and lower rates for longer durations depending on the appetite at the time of each measure.
The presentation included a discussion of the district's portfolio of four bond measures, the timing of measures falling off the tax roll, and the role of the independent citizens' oversight committee for bond spending review. Kim closed by offering to return for additional questions and board members thanked him for a concise summary.
