The Lucerne Valley Unified School District is well on its way to doing something that is rarely, if ever, done by a public school district — eliminating its debt.
“Not many districts can claim they are debt free, so this is an amazing goal you’re working toward,” Keith Weaver, the director of client services for the Sacramento-based Government Financial Strategies, said during a presentation at the monthly meeting of the LVUSD’s Board of Trustees on February 10th.
Weaver estimated the district could accomplish this goal in the next five years.
Following Weaver’s suggestion, the school district is currently tackling two key debt areas: the 2017 lease-purchase financing debt for purchasing energy efficiency projects such as lighting and heating and cooling systems (HVAC), and a Certificate of Participation (COP) originally issued in 2008 for classroom construction and other facilities at the Elementary and Middle/High Schools that was refinanced at a lower overall cost in 2016.
“That’s the debt that we have on our books,” Weaver said. “It’s about a little over $6 million in COPs, and about $1.7 million in lease-purchase.”
Using one-time state aid from the closure of a charter school, Lucerne Valley USD can make its next regular payment in April as well as pay off the estimated $1.5 million. The debt payment amounts to a couple hundred thousand dollars in interest savings and would free up about $150,000 per year, Weaver said.
“That would be a real good way to get some more resources in our budget.”
Weaver’s debt management plan impressed board members.
“That’s almost a half million dollars a year that we’re avoiding paying and putting it back into the district,” long time school board member Jim Harvey said following Weaver’s presentation.
Weaver said paying off the COP, which has remaining debt of about $3.8 million, can be done by the 2026 due date. “We have a few more years, and we can work toward that goal.”
Weaver suggested setting aside money every year in a fund that would create about $800,000 savings in interest costs and free up $300,000 in the school budget. The Lease-Purchase prepayment amounts to $152,155 per fiscal year in average future payments avoided for 11 years, and $337,478 per fiscal year in average future payments avoided for 13 years, according to Weaver’s report.
Between now and 2026, the district can invest the money in governmental bonds. Currently the district’s money sits with the San Bernardino County treasury, where it earns just 0.6 %. Weaver suggests putting it in bond investments that have 1.5% in annual interest earnings.
The plan can be revisited yearly, Weaver added. “We’re not tying ourselves into anything. We can do this on a year-to-year basis.”
Following the presentation, Superintendent Peter Livingston said, “We’ll be creating ongoing money with expenditures of one-time money that could disappear at some point.” Livingston added, which puts our district in a really good financial place five years from now, Livingston said. “We can set the district up for being in a great place (financially).”
“Not many districts can claim they are debt free, so this is an amazing goal you’re working toward,” Keith Weaver, the director of client services for the Sacramento-based Government Financial Strategies, said during a presentation at the monthly meeting of the LVUSD’s Board of Trustees on February 10th.
Weaver estimated the district could accomplish this goal in the next five years.
Following Weaver’s suggestion, the school district is currently tackling two key debt areas: the 2017 lease-purchase financing debt for purchasing energy efficiency projects such as lighting and heating and cooling systems (HVAC), and a Certificate of Participation (COP) originally issued in 2008 for classroom construction and other facilities at the Elementary and Middle/High Schools that was refinanced at a lower overall cost in 2016.
“That’s the debt that we have on our books,” Weaver said. “It’s about a little over $6 million in COPs, and about $1.7 million in lease-purchase.”
Using one-time state aid from the closure of a charter school, Lucerne Valley USD can make its next regular payment in April as well as pay off the estimated $1.5 million. The debt payment amounts to a couple hundred thousand dollars in interest savings and would free up about $150,000 per year, Weaver said.
“That would be a real good way to get some more resources in our budget.”
Weaver’s debt management plan impressed board members.
“That’s almost a half million dollars a year that we’re avoiding paying and putting it back into the district,” long time school board member Jim Harvey said following Weaver’s presentation.
Weaver said paying off the COP, which has remaining debt of about $3.8 million, can be done by the 2026 due date. “We have a few more years, and we can work toward that goal.”
Weaver suggested setting aside money every year in a fund that would create about $800,000 savings in interest costs and free up $300,000 in the school budget. The Lease-Purchase prepayment amounts to $152,155 per fiscal year in average future payments avoided for 11 years, and $337,478 per fiscal year in average future payments avoided for 13 years, according to Weaver’s report.
Between now and 2026, the district can invest the money in governmental bonds. Currently the district’s money sits with the San Bernardino County treasury, where it earns just 0.6 %. Weaver suggests putting it in bond investments that have 1.5% in annual interest earnings.
The plan can be revisited yearly, Weaver added. “We’re not tying ourselves into anything. We can do this on a year-to-year basis.”
Following the presentation, Superintendent Peter Livingston said, “We’ll be creating ongoing money with expenditures of one-time money that could disappear at some point.” Livingston added, which puts our district in a really good financial place five years from now, Livingston said. “We can set the district up for being in a great place (financially).”
Weaver will return for next month’s school board vote on the proposal, and the debt would be paid off in April.
In a related move, the LVUSD Board of Trustees voted unanimously to approved a Facility Solutions Agreement between the school district and SitelogIQ regarding HVAC upgrades. The vote came following a presentation by Desiree Escandon Haus and Chris Bristow who outlined how the school district can use Elementary and Secondary School Emergency Relief (ESSER) funding to make significant improvements to its HVAC systems. ESSER was passed by the federal government in March of 2020 as relief in response to the COVID-19 pandemic that includes support for K–12 schools.
Keith Weaver, the director of client services for the Sacramento-based Government Financial Strategies, spoke at last week's school board meeting.