Bond Parameters

The District is trying to accelerate its plan by saying the Measure G bond funds will be lost forever if not spent within three years. That is not true.

First, let’s look at what the District’s own website says about the bonds, on their Bond FAQ page (last visited September 12, 2025):

Let’s look more closely. The details are complicated, but reassuring and important to understand.

Q: Does the money disappear if not spent within 3 years?
No. The funds raised under Measure G remain available for voter-approved school facility projects until they are fully spent. They do not vanish.

What the District is referring to is an IRS tax rule: bond issuers must spend most of each bond series within 3 years to avoid paying back some investment earnings to the federal government. This is called the arbitrage rebate rule.

Q: When does the 3-year clock start?
The clock starts on the date bonds are issued, not the date voters approve the measure. Each separate issuance (or “series”) has its own 3-year window. Treasury Regulations: § 1.148-2(e)(2)(i). Here is the Measure G issuance schedule and relevant 3-year targets:

Q: What happens if the District misses the 85% target?

  • The money remains available for school projects.

  • The District may owe the IRS an arbitrage rebate — essentially paying back the extra interest earned by investing the bonds above their own interest cost (≈ 4.96% for Series A).

This is a financial penalty, not a loss of the bond dollars themselves.

Q: How big could the rebate be?
That depends on how much money is left unspent at the deadline and how high investment earnings are.

Example for Series A ($22.6M, 2023):

  • If $5M is still unspent in July 2026, rebate ≈ $150k–$200k.

  • If $10M unspent, rebate ≈ $300k–$400k.

In all cases, the rebate would be a very small percentage of the overall Measure G program.

Q: Is there any bond issue with repurposing Edna for the Middle School, since Edna was previously financed with other bonds?
No. Here is what the District’s own website says about this, on their Bond FAQ page (last visited September 12, 2025):

✅ Bottom line: The bond money will not disappear. Even if the District owes a rebate, it would be modest compared to the size of the program. The real issue isn’t the tax rule — it’s whether the District spends wisely on projects that are safe and feasible. Districts under political pressure use this to justify accelerating project approvals, but the community deserves to know the truth.

Worst case, if the District cannot identify a feasible Middle School project (perhaps because the renovation project cannot proceed in budget or the community shuts down any Edna solutions), the Measure G bond funds can still be used for other capital improvements at the Middle School and across the District’s other schools. The measure was written broadly to permit that kind of flexibility.