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Monrovia Unified consultants outline bond-timing options, caution on refunds as board weighs next draw
Summary
Consultants told the Monrovia Unified School District board that higher but volatile municipal interest rates, available assessed-value growth and statutory bonding capacity leave room for another bond series, but they recommended combining any 2015 refunding with new-money issuance and waiting for clearer market signals before acting.
President Hammond convened a special Monrovia Unified School District board workshop on May 23 to receive a finance update on the district’s bond program. Adam, the board’s bond consultant, led a presentation explaining how current municipal-market rates and local assessed-value growth affect the district’s ability to sell additional series of general-obligation bonds.
Adam told the board that municipal-market data (MMD) — a commonly used daily indicator — shows rates rose sharply beginning in January 2022 and remain above the COVID-era lows. “We are slightly elevated on interest rates,” he said, adding that lower rates are preferable for taxpayers because they reduce the district’s cost of borrowing.
Why it matters: the district’s assessed value rose about 6.79% last year, giving Monrovia Unified more statutory bonding capacity and the potential to keep taxpayer rates below conservative projections. The consultant showed the district’s net bonding capacity remains well below waiver thresholds, framing the district’s fiscal position as conservative and credit-positive.
On refunding the 2015 series, the consultant advised caution. He said a stand-alone refunding generally is not prudent unless it produces at least 3%–5% net present-value savings; “on a stand-alone basis, no,” he said of pursuing refunding today. Instead, he recommended adding a refunding to a new-money bond transaction if market conditions and projected savings make it worthwhile, because combining transactions spreads fixed issuance costs and can improve the net benefit to taxpayers.
Timing and next steps: staff and consultants outlined a tentative calendar (bond documents as early as Aug. 13, credit-rating application, and potential proceeds in late September) but emphasized the schedule’s market sensitivity. Adam warned against pricing in December and said January is usually preferable if the district’s timetable slips. He repeatedly stressed there is no urgency to issue bonds unless the district needs funds immediately.
Board discussion focused on how rate movement and project readiness should drive the timing. Several board members urged staff to preserve summer breaks and proposed shifting workshops so heavy staff work does not fall in July; one member recommended advancing the board workshop schedule by roughly 30 days to keep staff availability intact. Staff committed to deliver updated, transaction-ready numbers to the full board before any resolution or authorization comes back for formal action.
What wasn’t decided: no resolutions or votes were taken at the workshop. The board asked staff to return with final project prioritization and updated market-cost estimates, including any recommended inclusion of the 2015 refunding with a new-money sale.
Ending: staff and consultants will return with refined cost estimates, credit-rating steps and a recommended calendar; the board agreed to present key updates at the next regular meeting so the public can weigh priorities before any formal authorization.
