FOR IMMEDIATE RELEASE: October 18, 2017
CONTACT: Kimberly Beare, 408-201-6024
PRESS RELEASE— October 18, 2017 — A second bond sale – “Series B”- this one worth $80 million, was finalized on October 17, by the Morgan Hill Unified School District staff. Approved by voters in 2012, the $198 million school bond program, Measure G, is transforming MHUSD campuses by funding essential infrastructure upgrades, repairs and renovations to existing buildings, and new construction.
As part of the financing process, District staff met with representatives of Moody’s Investors Service last month to obtain a credit rating for the bonds. Based on the District’s strong fiscal position, sound management practices, and large and growing tax base, Moody’s affirmed the District’s general obligation bond credit rating of Aa1, the highest rating a non-Basic Aid district can receive.
Early Tuesday morning, the bonds were offered to investors with a very strong response which resulted in resulted in more orders for bonds in many maturities than there were bonds to sell. Orders were received primarily from money managers and institutional investors such as insurance companies, bond mutual funds, and bank portfolios, with over 35 different institutional investors placing orders for the bonds. Subscriptions or requests to purchase by investors were over four times the total amount of bond that District had available to sell. This high demand and strong interest further solidifies the District’s strong financial position that sets it apart from other school districts throughout California.
In response to market conditions and investor demand, interest rates on the bonds were lowered several times from the levels estimated prior to the sale. The final lower interest rate levels for the bonds were over $1.9 million lower in debt service payments over the life of the bonds compared to what was presented to the Board of Education on September 5, 2017.
“Today’s sale surpassed our highest expectations for investors’ response showing the value and strength of our district. With a savings of nearly $2 million dollars to the taxpayers, we could not be more pleased with the result,” said Steve Betando, MHUSD Superintendent. “I thank the community for their continued support of our innovative schools and our staff and Governing Board who have worked tirelessly to establish and maintain sound fiscal practices and position while building and protecting our assets for decades into the future.”
The district has many projects planned for the monies collected from the Series B sale. The cornerstone of this Series will be the major transformation project taking place at Britton Middle School. Breaking ground in December 2017, this project will result in the majority of classrooms being replaced with over 80,000 square feet of brand new learning space. The new campus will also include one primary quad and a number of axillary quads that can be used for outdoor learning spaces. A new student union building, which includes a scratch cooking kitchen for healthier options for student nutrition and learning opportunities, is also in the works. Additionally, a much needed new parking lot and drop off/pick up area will replace the existing lot helping to ease congestion before and after school.
Nordstrom Elementary School and Jackson Academy of Math and Music will also benefit from this second series. Nordstrom will see the replacing of aged and outdated portables with new classroom buildings and will receive a larger multipurpose use space on campus.
Jackson Academy of Math and Music, one of the District’s two K-8 schools, will get a new regulation sized gymnasium that can support middle school athletics along with new performance spaces and classrooms to help support the music program.
“This continues to be a tremendous time for Morgan Hill Unified,” Casino Fajardo, MHUSD Director of Construction and Modernization said of the plans. “I know that our entire community is excited and looking forward to the campus improvements the District is looking to complete over the next few years, and with Britton breaking ground in December, all of our stakeholders will get a first-hand look at the innovations we have coming to our district.”
Another portion of this sale will be dedicated to sustaining the technology investment we’ve already made and keeping up with the fast-changing innovative environment. A technology refresh over the next three years will be the combination of student technology and infrastructure.