Financial adviser outlines plan to sell Measure SOS bonds; board to appoint oversight committee

John Isam, the districts financial adviser, told the Palos Verdes Peninsula Unified Board of Education on Dec. 18 that the district should quickly prepare the legal and financing steps to issue the Measure SOS general obligation bonds voters approved on Nov. 5.

Isam outlined the typical bond-package documents the board will be asked to approve — a resolution of issuance, a preliminary (and ultimately final) official statement, a continuing disclosure certificate, a paying-agent agreement and a bond purchase agreement — and said these will be completed in the weeks before pricing. He said the districts likely timeline could produce proceeds to the district by early March, allowing the district to begin committing funds and earn short-term interest while satisfying IRS timing rules.

Why it matters: Measure SOS provides significant new capital funds for school projects. How the district sells the bonds and whether it secures a credit rating or insurance affects borrowing costs and the amount available for construction and repairs.

Isam described the differences between sale methods and recommended a competitive sale for the first series. "Were recommending that the district do a competitive sale," he said, explaining that wider bidding generally draws more underwriter competition and can drive down the true interest cost to taxpayers. He also explained how rating-agency presentations and optional bond insurance can affect interest rates and overall transaction cost.

Isam told trustees the district can present its financial story to rating agencies such as Moodys or S&P to seek an upgraded rating; a stronger rating typically lowers borrowing costs. He also said selling earlier in a favorable market can reduce long-term exposure to construction-cost escalation and allow the district to earn interest on proceeds until projects are ready.

Board action: The board voted to certify the Nov. 5 election results and to adopt bylaws establishing a Citizens' Bond Oversight Committee, a requirement under Prop. 39. The resolution records that the bond measure met the 55% approval threshold required for passage and directs the county to record the election proceedings. Staff said oversight-committee applications will be posted on the district website and are tentatively due Jan. 13.

Questions and next steps: Trustees asked how the district can allow local residents to buy bonds, how insurance affects rates, and whether the district should finalize a detailed project-priority list before selling. Isam said districts sometimes reserve a portion of an issue for local retail investors but that typically limits competition; he reiterated that competitive sale is preferred for larger issues. He also said districts must commit bond proceeds within IRS timing rules (spending or committing funds within five years) and that some projects are quicker to start (roof replacements, playgrounds, other "quick start" projects) while more complex projects may need Division of the State Architect (DSA) approvals.

What the board said: Trustees emphasized transparency and strong oversight. Administration and counsel explained that the board will return in January to approve a resolution of issuance and the remaining formal documents; staff said bond proceeds may be available in early March if the schedule holds. The board also approved bylaws for the Citizens' Bond Oversight Committee and discussed making the application and interview process public.

The board did not adopt a final project-priority order at this meeting; staff said that once the first series proceeds are known they will present a list of potential projects for board prioritization and public review.