San Marcos Unified School District

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Prop K

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The Citizens Bond Oversight Committee (the COC) was established to actively review and report on the proper expenditure of taxpayer money for school construction.  The COC is required to report on compliance with Article XIIIA, Section 1(b)(3) of the California Constitution including: 
  • Bond funds are expended for the construction, reconstruction, rehabilitation or replacement of school facilities, or the acquisition or lease of real property for school facilities;
  • That no bond funds are used for any teacher or administrative salaries or other operating expenses;
  • To report on the review of the annual independent performance audit; and
  • To report on the review of the annual independent financial audit.

The COC may also make specific recommendations related to maximizing bond revenues by implementing cost-saving measures. The COC may not directly involve itself with the issuance of bonds or the negotiation of contracts.

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Citizens Oversight Committee Meetings

COC meetings are open to the public and the public is encouraged to attend. 

The COC will present its annual report to the Governing Board on March 10th.

Also note that the independent auditor will be presenting its Financial and Performance Audits to the Governing Board and the Governing Board will be discussing the next series of bonds to be issued under Proposition K at its March meeting.

The next regular COC meeting will be April 17th, 2014 at the School District offices.
Proposition K Bond Issuance

Bonds authorized:  $287,000,000.

    In accordance with Proposition K the  maximum interest rate on any bond cannot exceed 12% and the final maturity of any bond cannot exceed 40 years. Recent legislation restricts Capital Appreciation Bonds to no more than 25 years along with other restrictions. Based on the initial financing plan a tax rate of $44 per $100,000 of assessed value was expected to be sufficient to support the debt service on the bonds; however, the maximum statutory tax rate is $60 per $100,000 of assessed value.

Bonds issued to date: $207 million;

$142 million Series A bonds issued June 22, 2011; yields ranged from 1.38% for the shortest maturity to 6.65% for the longest maturity; maximum maturity at issue was 28 years with a weighted average maturity of 21.2 years (reflects that bonds mature beginning in 2013)
$65 million Series B bonds issued May 8, 2012; yields ranged from 0.75% for the shortest maturity to 5.80% for the longest maturity; maximum maturity at issue was 40 years with a weighted average maturity of 30.8 years (reflects that bonds mature beginning in 2013, however most of the issue was Capital Appreciation Bonds maturing in 2047 and 2051).

Remaining planned bond issuance: $80 million of potential issuance remains under Proposition K authorization. 

Comments: As a result of changes in the economy and newly adopted legislation, that restricts future school district bonding, the District is currently re-evaluating the Proposition K projects and financing plan.  The Committee encourages taxpayers in the District to inform themselves of the alternatives for moving forward with financing for the projects initially contemplated by Proposition K and attend District meetings discussing the remaining Proposition K financing plan.


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Overall Construction Budget & Expenditures

For a summary of the construction budget and status for the project you are interested in click on the thumbnail above or the link in the left margin.

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Results of Independent Financial & Performance Audits

The District is required to obtain annual financial and performance audits related to the expenditure of Proposition K bond proceeds. Christy White Associates completed independent financial and performance audit reports for the fiscal year ended June 30, 2013. The audit firm :
  • Opined that the financial reports submitted to the District and the COC present fairly, in all material respects, the financial position of the Proposition K Bond Building fund as of June 30, 2013 in conformity with generally accepted accounting  principles;
  • Did not identify any deficiencies in internal control over financial reporting that they consider to be material weaknesses and their tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards; and
  • Opined that the District complied, in all material respects, with the compliance requirements for Proposition K Bond Building Fund for the fiscal year ended June 30, 2013.

The full reports are available by clicking on the links in the left margin.


Compliance with Article XIIIA, Section 1(b)(3) of the California Constitution

Based on its review of information provided by the District and the independent auditor to the COC, and its inspections of the projects to date, the COC concludes that expenditures of Proposition K Bond Building Fund have been in compliance with the requirements of Section 1(b)(3) of Article XIIIA of the California Constitution.

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Last Modified on February 24, 2014