LA Unified prearing to sell first bonds from $7 billion Measure Q
Mike Szymanski | November 18, 2015
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Seven years after city voters approved Measure Q, giving LA Unified the go-ahead to borrow $7 billion, the first bond sales from the measure will begin within a month or so, district officials said today.
As the largest local school bond measure in California history, Measure Q was requested to upgrade older school buildings and reconfigure outmoded campuses. Some projects will cost as little as $50,000, wiuth others as much as $140 million.
Mark Hovatter, the LAUSD chief facilities executive, said the first phase of Measure Q sales will attempt to raise $900 million. The board has already approved spending $2 billion of the $7 billion total.
“We pay as the work is done,” Hovatter said. “There’s always a cash flow.”
The district already has projects underway, but those are being paid for by the sale of other bonds. This is the first tranch of Measure Q. The district goes into the bond market “once or twice a year,” and Hovatter said he expects to raise the second tranch within another six or eight months.
With capital improvements in the district, the financial assembly line is always running, and the bonds are sold only when money is needed. As soon as money comes it, it goes out to pay bills, with each project following a similar track: Endorsement by the district’s School Construction Bond Citizens’ Oversight Committee, school board approval, a plan for the scope of the project, a design, approval by the office of the state architect, then the approval of construction contracts.
Hovatter said LAUSD bonds are easy to sell. “We’ve always had twice as many people who want to buy them as we need,” he said. “It’s a solid investment. We have a reliable tax revenue to support it and a strong completion rate. It’s a low risk investment.”
Tom Rubin, a consultant to the bond oversight committee, confirmed LAUSD’s credit rating has remained fairly steady since 2008 and that there should be no problem in selling the bonds.
Measure Q also provides $450 million to independent charter schools to upgrade their facilities to those of traditional public schools. The measure did not raise taxes, nor can it be used for anything except facility improvements.