Manteca Unified — thanks to solid growth, district administrative stability, and fiscal management — has the equivalent of an AA credit rating.
Why that matters to those owning property within the Manteca Unified School District is simple. It has allowed the district to secure lower than average interest rates on bonds when they are issued. At the same time, thanks to a five-year average of assessed valuation growth of 7.2 percent, it has spread bond indebtedness over more properties.
It is why the final issuance of the $159 million Measure G bonds approved by voters in 2014 that school leaders at the time said would cost no more than $60 per $100,000 of assessed valuation, ended up costing only $37 per $100,000.
The $260 million Measure A bond on the Nov. 3 to address aging infrastructure and such at the district’s 33 campuses — a third of which are 50 years or older — is being capped at $45 per $100,000 in assessed valuation. Assessed valuation in Manteca, Lathrop, and Stockton — that includes Weston Ranch and industrial areas around Stockton Metro Airport that are part of the school district — increased 9.8 percent in 2019.
Based on current growth trends it is unlikely the bonds, if they are approved with a 55 percent yes vote or higher, will cost $45 per $100,000. They are likely to come in closer to the last issuance of the Measure G series bonds.
Originally Measure G was projected to cost the owner of a home with a $300,000 assessed value $180 more a year in taxes based on $60 per $100,000 of assessed value. The last series issued ended up costing homeowners $110 as opposed to $180 or $70 less per year than the bond measure was capped at when Measure G was passed six years ago.
Measure A — if no more new growth occurred — would cost a maximum of $135 a year based on a home with a $300,000 assessed value. Given Manteca and Lathrop new home sales have increased an average of 40 percent since the pandemic started plus newer business parks and commercial projects breaking ground, the odds are strong the five-year average of 7 percent growth in assessed value that lowered Measure G bonds from $60 to $37 per $100,000 will continue.
The assessed value of property within the Manteca Unified School District is now at $15.5 billion.
Assessed value is different than market value. An older home that hasn’t been sold in a number of years may have a market value of $350,000 but its assessed value is based on the price it last sold at plus a 2 percent annual cap on value increases under Proposition 13.
New home sales plus existing homes that are resold have their assessed value reset at the selling price.
It effectively means buyers of new homes — as well as those in a position to buy existing homes — will be shouldering a larger burden of repaying school bonds. Such buyers typically are the ones that have a large percentage of families with school-age children.
Overall there are $302.4 million in facility needs defined by age and conditions at the 21 campuses in Manteca, $69.6 million at the six campuses in Weston Ranch, $31.1 million at the four Lathrop campuses and $6.3 million at French Campo School.
The total needs that reflect significant critical components you cannot see that are underground, behind walls, or on roofs comes to $409.6 million
Measure A on the Nov. 3 ballot, if passed by 55 percent of the voters, would generate $260 million to go toward those identified needs.
The highest priorities are the oldest campuses with the biggest needs —Manteca High and East Union High. If the two campuses had to be replicated today they would cost nearly $200 million apiece to replace.
Moody’s — the bond rating firm Manteca Unified is working with — has given the school district an Aa2 rating that is the equivalent of the AA ratings issued by S&P as well as Fitch.
Manteca Unified exceeds the median Moody’s rating of Aa3 for school districts throughout the United States. That’s because Manteca Unified has a direct bond indebtedness of 1.5 percent that is deemed by bond investors as being moderate.
As such the Aa2 rating affects the district’s ability to meet its financial commitments but — as with all ratings — is subject to adverse effects in the changing economy.
Mood’s describes bond obligations with Aa ratings to be of high quality and vr low credit risk. The only category higher — Aaa — is reserved for bonds of the highest quality and the lowest level of credit risk.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
