Pacific Grove Unified School District
Supporting the first Measure E financing for capital improvements and refinancing
Background
Pacific Grove Unified School District, located in Monterey County, serves approximately 1,700 students across grades TK–12. For purposes of education funding, the District is a Basic Aid District, or Community Supported District, meaning its share of local property taxes exceeds its funding entitlement under the State's education funding formula.
Following voter approval of a $78 million general obligation bond measure in November 2024, the District sought to finance the first phase of its capital improvement program while also refinancing outstanding general obligation bonds as part of its ongoing debt management strategy.
On June 24, 2026, Baird's California K-12 Public Finance group served as sole managing underwriter for the District's $40.3 million financing, consisting of $26.0 million of General Obligation Bonds, Election of 2024, Series A, and $14.3 million of 2026 General Obligation Refunding Bonds. The bonds carried an underlying AA rating from S&P.
Opportunity
As the first issuance under the District's 2024 voter authorization, the financing needed to balance capital funding needs with the District's ongoing debt management objectives. The District sought to fund the first phase of voter-approved facility improvements, refinance outstanding bonds to reduce debt service costs, and preserve remaining authorization for future capital needs.
Solution & Implementation
The financing combined new-money and refunding bonds in a single offering, funding the first phase of the District's facilities improvement program while refinancing portions of its outstanding debt. Investor demand was solid throughout the pricing process, allowing the financing team to lower borrowing costs through repricing / adjust yields on select maturities / maintain pricing despite changing market conditions. The District received 75 separate orders totaling approximately $71.575 million, representing 1.8x subscription. Working collaboratively with the District and financing team, Baird marketed the financing to institutional and retail investors and priced the bonds to support the District's capital improvement and refinancing objectives.
Results & Impact
The financing provided the District with funding to begin implementing its voter-approved capital improvement program. The financing marked the first issuance under the District's 2024 voter authorization, providing funding for the initial phase of its long-term capital improvement program while preserving flexibility for future financings. Strong investor demand for the District's bonds reinforced market confidence in the District's credit. The refunding series, achieving approximately $900,000 in total gross debt service savings to District taxpayers representing 5.43% of the refunded bonds, net of all financing costs.
