School District’s Referendum Costs May Approach $200 Million

[Written by Jim Schneider, who did hear the proceedings. Edited & posted by yinn. Go to Mac’s place for more, including the docs holding the numbers Jim is using.]

The $110 million ref was a lot more than advertised. Since this ref is being financed, the interest cost will cause the total costs to be 1.8 to 1.9 times $110 M; that according to Tom Teresinski of the Facilities Planning Committee at the July 22 meeting.

With the “economic conditions having changed drastically since the approval of the referendum” the finance costs are soaring even with plummeting 5-year enrollment projections (was an increase of 1344 now only 574. The most recent data show that the district used a projection for ’07 that was 141 higher than the actual). A representative from the District’s bonding company (William Blair & Co) provided several scenarios according to cuts in the H. S. size from 2500 to 2000 (saving only $2.7M) & financial assumptions: 1) a larger CPI for ’09 (2.50-4.50%), 2) reduced new construction from $20 to $10 M/yr from ’08-’12 , 3) adding 2 more yrs to the term of the bonds (18-20 yrs) as requested by the FPC & District.

Several District options for managing the total tax rate were given: 1) Issuing bonds in more pieces over 5 yrs, 2) Using interest earnings to offset tax rate increases, 3) Using capitalized interest, refunding & capital appreciation bonds to restructure debt, & 4) Use funds on hand to abate debt service.

Taxes on the $200K home will go up only a little more than previous projections over the next 5 yrs because the stated objective by the District is to “maintain the tax rate within the parameters of the ref.”

With 2 more yrs added to the bonds, the H.S. cut to 2000 & the enrollment growth projection cut by 57% the total costs are projected to go from $182.3M to as much as $197.3M.

Would anyone care to make a $ donation?