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Bank of America explains how a Prop 39 bond could raise $75–90M for Fallbrook facilities; board plans further study
Summary
Bank of America’s Jin Kim told the Fallbrook board how general‑obligation bonds work, highlighted Prop 39’s 55% voter threshold and tax‑rate caps, and suggested a district of this size could feasibly support roughly $75–$90 million; trustees asked about timing, construction‑cost escalation and whether to include preferred‑labor agreements.
A Bank of America representative explained to the Fallbrook Union Elementary School District board on Monday how a potential general‑obligation bond measure might be structured, how much the district could reasonably seek and what tradeoffs the board would face.
Jin Kim, director of education facilities financing at Bank of America Securities, gave a step‑by‑step overview of GO bonds and said the commonly used Prop 39 model requires 55% voter approval and places a cap on the tax rate. "A Prop 39…requires a 55% voter approval," Kim said. He described two bond types, noted that Prop 39 includes transparency and accountability features, and said most California districts now use Prop 39.
Kim discussed how assessed valuation—not market value—determines the tax levy and explained that bond proceeds are typically drawn in phases timed to construction schedules so the district pays interest only on amounts actually drawn. He told trustees that for a district of this size, "the envelope math" suggested a feasible bond package in the neighborhood of $75 million to $90 million at the maximum $30 per $100,000 assessed valuation cap, depending on assessed‑value growth and targeted tax rates.
Trustees pressed Kim on several risks: rising construction costs, interest‑rate timing, and the effect of preferred‑labor agreements (PLAs) on project costs. Kim said some districts adopt PLAs and others do not, and that the decision involves local priorities and tradeoffs: PLAs can support local workers but may increase construction budgets. He also estimated preliminary outreach costs: polling at roughly $30,000 per poll and a potential pre‑ballot education budget in the low hundreds of thousands.
Kim recommended a series of next steps if the board wishes to explore a bond: commission a community poll, engage a communications consultant to educate voters, establish project priorities and, if the community approves a bond, form an independent citizens' bond oversight committee to track expenditures. Trustees agreed to schedule a dedicated discussion to continue exploring feasibility rather than deciding on next steps at the same meeting.
The board did not vote on placing a measure on the ballot Monday; members said they wanted more time for study, polling and outreach.
