Bond financing for the Santa Monica Malibu Unified District remains strong but the district actually has to spend more money to avoid a potential conflict with the Internal Revenue Service.
At the February 15 SMMUSD Board meeting, The Citizens Bond Oversight Committee presented an annual report on Measure BB and ES expenditures.
Measure BB and ES are SMMUSD’s facility improvement bond measures that were passed in 2006 and 2012. The bonds have helped SMMUSD with combatting infrastructure problems, constructing new facilities, and updating the district’s technology.
Measure BB, asking voters to approve a $268 million bond, received over 67% approval from voters and Measure ES, asking voters to approve a $385 million bond, received over 68% approval.
The report provided to the Board was for July 1, 2015, to June 30, 2016.
Charlie Yen, chair of the Citizens Bond Oversight Committee, apologized for the report being late due to “unforeseen conditions,” and praised the district for their work thus far.
“The district, under the direction of CBO and Carey Upton, did a good job getting projects going,” Yen said. “It’s a difficult thing to do. I think you have an outstanding team to complete the bond programs, to make sure all projects are benefitting our school’s kids.”
Yen addressed expenditures and balance sheets within the report, noting that for Measure BB in the 14/15 year, the district had $42 million for their fund balance, finishing off with $27 million remaining for the 15/16 year. The district spent $14 million on projects that year for Measure BB.
For Measure ES, Yen said in the 14/15 year, the fund balance was $19 million while the following year, 15/16, the balance increased to $64 million due to a district-issued $60 million bond on July 7, 2015.
“That gives the district more money to spend on projects,” Yen added. Expenditure for Measure ES in 14/15 was $15 million.
“Again, the district did a lot of programs and projects that are really benefiting our kids,” said Yen.
Yen focused on a potential issue related to the lack of spending attached to the $60 million bond.
“When you issue a bond, the district should spend that money within three years to avoid trouble with the IRS,” Yen said. “I understand in three years there’ll be a lot more projects that’ll be spending money. I just want the board to pay attention to this.”
Yen went on to praise the district and staff, acknowledging the difficulties in completing these projects. Yen says the “next big project” is Malibu.
“Great campus, beautiful place,” Yen said. “Not an easy place to build but we have a good team to accomplish what the taxpayer wants.”
The Board unanimously accepted the annual report, with Boardmember Laurie Lieberman praising Yen’s “amazing work”, “diligence”, and “effort.”
“I know they (the Board) feel the same, and we all want you to stay on this committee as long as its allowed,” Lieberman said.
Boardmember Maria Leon-Vasquez asked for a more expedited process for newer reports, noting that this report was a year behind. Melody Canady, assistant superintendent of business and fiscal services, added that the district is working on newer software to help fast-track the process.