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Board presses bond team on Measure G sale and refinancing; member calls for forensic audit
Summary
Board members questioned consultants and staff about a December authorization that combined a $20M Series G draw with an option to refinance older bonds. Consultants said refinancing generated insufficient taxpayer savings and was not executed; one board member called for a forensic audit and requested missing closing documents.
District staff and outside consultants briefed the board on the Measure G Series G bond sale and a contemporaneous, potential refunding of older Measure G Series A bonds. Eduardo Santillan introduced the consultants; Jim Kim, the bond underwriter, said the district issued a $20 million Series G draw and evaluated—but did not execute—a refunding because net present value savings fell below the district's 3% best‑practice threshold.
"The objective was to draw $20,000,000 of previously voter‑authorized Measure G funds while staying under the voter‑authorized $60 tax rate," Jim Kim told the board, adding that refinancing was only to be undertaken if it produced economic benefits to taxpayers.
Several board members said the packet and public presentations emphasized refinancing and taxpayer savings in November and December and that they did not clearly understand that the board was also being asked to authorize a new‑money issuance. Board member Free said later she reviewed documents and found missing or misordered closing memorandum pages and asked why the board was not told the refinancing would be set aside. She recommended a forensic audit of Measure G issuances dating to the measure's inception. "I do recommend that we do a forensic audit on Measure G," she said.
Consultants and staff responded that drafts of combined offering documents had been prepared to allow flexibility should refinancing produce savings, that the refunding was removed once interest‑rate analysis showed little or no savings, and that the district bore no refinancing costs because the refunding was not executed. Jim Kim said final issuance costs for the Series G sale were lower than estimates and that staff would continue to monitor markets for any future refinancing opportunity.
Why it matters: Board members asked staff to provide missing closing documents, a clear accounting of fees and interest earned on the issuance, and a timeline describing which approvals delegated authority for construction and project decisions. The dispute centers on whether the board and public received adequate notice about the combined nature of the authorizations and whether additional oversight (including an audit) is warranted.
Provenance: topicintro SEG 1869, topfinish SEG 3411.
