Branson School seeks bond plan to ease debt bite
The Branson School in Ross is seeking state approval to issue about $28.25 million in tax-exempt bonds.
David Hanson, Branson’s chief financial and operating officer, said the process will involve refinancing about $24 million in existing tax-exempt and taxable debt and incurring about $4 million more in new debt. All the debt would be issued as tax-exempt bonds at the current lower rate.
“What we’re doing is leveraging the financial markets to reduce the amount we pay in our debt service every year,” Hanson said Wednesday.
“The debt market has changed dramatically in the past year,” he added. “A lot of schools, nonprofits, colleges and universities are reissuing their debt at a lower rate.”
A public hearing on the school’s request to the California Public Finance Authority will be held at 10 a.m. Tuesday, Jan. 26, before the Marin County Board of Supervisors.
Chris Mazzola, Branson’s head of school, said the move will free up money “for other institutional purposes” that would otherwise have to go for annual debt service.
“Given the huge expenses we have incurred this year because of COVID, we are looking for every way possible to reduce our expenses,” Mazzola said.
Hanson said the existing debt was incurred for past construction projects, such as building an arts center, a science building and the student commons area and dining hall.
“We will convert it all to tax-exempt,” Hanson said. The tax-exempt designation means that people who buy and hold the debt in the
form of tax-exempt bonds receive certain tax benefits.
Branson, as a nonprofit organization, does not pay taxes, but the school is required to issue a public notice and participate in a public hearing when it refinances or issues tax-exempt bonds.