Services

School Facility Construction

I am so proud of the Business Services team that I employed and empowered while at the San Dieguito UHSD! This photo was taken at the recent groundbreaking for a solar project in the District includes District Staff Eric Dill, Christine Bennett, Russ Thornton Joann Schultz and Steve Ma. More info on the project follows:

The San Dieguito Union High School District Closes QSCB Financing and Commences Work on Solar Project

On Monday, May 10, 2010, the San Dieguito Union High School District issued $13,015,000 in qualified school construction bonds (QSCB’s) in order to finance the installation of solar power generation facilities at two of its high school campuses in San Diego County. The effective interest rate that the District has to pay (after taking into account a subsidy to be paid by the U.S. Treasury) is 0.80%. The District is projected to realize in excess of $10.5 million in gross savings over the next 25 years from its investment in solar financed by QSCB’s.

QSCB’s are a special qualified tax credit bonds authorized by the 2009 Recovery Act signed into law by President Obama shortly after his inauguration. QSCB’s, as envisioned by the Recovery Act, were intended to have a principal portion and a tax credit portion. However, with the enactment of the Hiring Incentives to Restore Employment Act (HIRE) in March of 2010, the issuers of QSCB’s now have the option to either (1) issue QSCB’s that carry with them tax credits to benefit the bondholders or (2) issue QSCB’s that bear taxable interest and elect that the issuer receive a subsidy payments from the Treasury to offset all or a portion of the taxable interest the issuer is required to pay. The amount of the subsidy is the applicable rate determined by the Treasury on the date the bond purchase contract is signed. The Treasury determines and publishes the applicable rate each business day on https://www.treasurydirect.gov/GA-SL/SLGS/selectQTCDate.htm.

San Dieguito elected the direct subsidy option and entered into a bond purchase contract on April 29, 2010. The San Dieguito bonds bear taxable interest at 6.459% and the applicable rate determined by the Treasury on April 29, 2010 (the bond purchase contract date) was 5.66%. This means that the District’s effective interest cost is the difference between the two percentages, or 0.80%. The term of the bonds is 17 years.

Manatt, Phelps & Phillips, LLP served as bond counsel on the QSCB issuance and represented the District in negotiating a solar engineering, procurement and construction agreement with a large solar contractor to install the solar facilities and provide a guaranty to ensure that the facilities generate a certain level of solar energy over the first 15 years of operation. Perry Israel served as the District’s special tax counsel and De La Rosa & Co. served as underwriter.