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Financial adviser outlines bond‑anticipation options, recommends blended BAN to maximize proceeds
Summary
District financial adviser presented three financing routes — wait, bridge loan (bond anticipation note/COP), or a tax‑rate increase — and recommended a hybrid BAN mix (scenario 2.5) that would maximize near $3.56M in net proceeds while keeping the tax rate within prior voter expectations. The board asked for additional state‑funding confirmation before finalizing any BAN.
John Isom, the district's financial adviser, told the board the district can either wait for state funding, use short‑term bridge financing, or seek a tax increase from voters, and he urged the board to weigh educational and political tradeoffs alongside pure finance math. "A bond anticipation note is a bridge loan," Isom said, explaining that a BAN can deliver money now and be repaid with a later bond sale.
Isom walked the board through three numeric options and said a blended approach ("scenario 2.5") would likely net the most dollars for construction while remaining within the constraints set at the time voters approved Measure J. "Why that's relevant is because we have a future bond of $4,000,000 that we're gonna use to pay off these bands," he said, describing a mix of capital appreciation and current‑interest instruments that could produce roughly $3.56 million in usable proceeds in current market conditions.
Board members pressed staff on whether the BAN net figures include issuance costs and on timing; staff confirmed issuance and underwriting fees are embedded in the net estimates and said market timing (January/February windows) affects pricing but the district can choose when to price. Isom recommended that the district only proceed with bridge financing once it has confirmation from the Office of Public School Construction (OPSC) that state funds are real and that Sunol Glen Unified is on the workload list, so repayment can be coordinated with expected state reimbursements.
The presentation did not ask the board to adopt a BAN tonight; staff said they will return with refined numbers and state‑funding verification for a future action. "If the district concludes that a and b are viable and you're okay with breaking case of emergency c — making a payment for 1 year, maybe 2 — then a bridge loan would be a great option," Isom said, summarizing the affordability considerations.
