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Oxnard board authorizes bond anticipation note to keep Fremont project moving
Summary
Trustees approved documents enabling the district to issue a bond anticipation note (up to $36 million authorized by voters) to accelerate Fremont Middle School reconstruction while waiting to sell the remainder of pledged bonds; staff and advisers emphasized repayment risks, reliance on assessed-value growth and reserve plans.
The Oxnard School District on Jan. 14 approved a resolution and related documents to enable the sale of a bond anticipation note (BAN) to finance construction for the Fremont Middle School reconstruction while the district awaits capacity to issue existing voter-authorized bonds.
Kushoo (Kushoo Guerra), a financial adviser with CFW, told the board the BAN is a short-term borrowing mechanism: "A bond anticipation note is a note where we borrow money today, and we repay it in the future with the issuance of the bonds," he said, explaining the district would repay the BAN when bonds authorized in the 2016 measure become available for sale. The documents before trustees set a not-to-exceed authorization aligned with the $36 million remaining under that voter authorization, though staff said the actual BAN size will likely be smaller (roughly $30 million) based on pace of needs and repayment capacity.
Board materials and the consultant laid out the financial tradeoffs: the BAN will accrue interest that is paid at maturity (up to five years), raising the total payback above principal (CFW estimated a full $36 million BAN could require roughly $42 million at maturity). The plan assumes assessed-value growth averaging about 4% and leaves a contingency to repay from Measure I capacity if Measure D receipts are insufficient.
Trustees asked about risks related to declining enrollment and the districtbudget. CFW and district staff said the plan was designed to preserve Measure I for later uses and to use Measure D capacity where possible; the BAN was pitched as a way to avoid pausing Fremont construction for years while tax-rate capacity grows. The board approved the resolution on a roll-call vote.
What happens next: staff and advisers will meet with credit rating agencies, post the preliminary official statement and then move to market to lock rates, targeting an early-February transaction. The district's chief business official will continue to monitor assessed-value trends and will advise the board if market conditions or revenue assumptions change.
Vote and oversight: Trustees approved the resolution and related documents to proceed. The board directed staff to provide continuing budget and risk briefings in the coming months as the transaction and construction proceed.
