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San Diego Unified is seeking to borrow more money for school renovation and pay it off over a longer period of time.
Doing so could help accelerate school fixes and upgrades, which have been delayed because of dropping tax revenues from a bond that voters approved two years ago.
But taking longer to pay off the bonds will also mean that San Diego Unified pays more in interest. The question that the school district is wrestling with is whether the added costs of paying off bonds over a longer period of time — just like taking longer to pay off your credit card — will be offset by getting money to build and renovate schools sooner while construction prices are low.
“We believe construction will cost more in years to come,” said Phil Stover, who oversees business operations in the school district. “If things get done quicker, that may outweigh the costs.”
The school board has agreed this year to seek $200 million in bonds that it has to pay off over 40 years, instead of getting $100 million in bonds that it would repay over 25 years, as it had earlier planned.
While the longer bonds are already in the works this year, San Diego Unified has to decide whether it wants to keep doing that in the future, as it keeps borrowing money each year to pay for school renovations.
Outside experts and community members who sit on the oversight committee for the school renovation bond say they want to see an analysis of the costs and benefits of paying off the bonds more slowly. Some believe that the bond advisers could have and should have provided that analysis before the school board gave it the green light to seek the longer bonds this year.
“The district should look at this properly,” said John Gordon, who leads the finance and planning subcommittee of the bond oversight group. “There could be some benefits to it, but it’s just not outlined yet.”
— EMILY ALPERT