Everything you need to know about the $110 million school bond vote
IDAHO FALLS — People for and against Idaho Falls School District 91’s proposed $110 million bond are making themselves heard before voters decide the issue Nov. 7.
If the bond passes, about $70 million will go toward building a new Idaho Falls High School just off 49th South near Taylorview Middle School. The old school would become home to all of District 91’s career technical programs, administrative offices and continue to be used for community functions.
The other $40 million would be used for a top-to-bottom renovation of Skyline High School.
District 91, along with groups in favor of the bond, say the measure is necessary to modernize the schools, and it will not raise taxes for voters.
“As our tax base grows, our tax levy rate will stay the same even though we will be collecting more revenue from people,” District 91 spokeswoman Margaret Wimborne says.
Opponents, however, say the measure will increase taxes, the bond is not cost effective, and the proposal is an unnecessary amount of debt to put on patrons.
IN SUPPORT OF THE BOND
Dr. Matthew Traynor, an ophthalmologist with Premiere Eye Care, is a volunteer on the District 91 bond campaign. He has a daughter who attends Idaho Falls High School and will soon have other children going to classes in the building.
He says space is lacking at both high schools, and the infrastructure is archaic. He’s experienced similar challenges in his own profession.
“The building I have been in for the last six or seven years is an old house that was built in the 1950s — the same decade Idaho Falls High School was built. So we’ve dealt with all the same issues,” Traynor says.
Those issues included an inadequate electrical structure for modern technology and thick walls that prevent reliable wifi.
Traynor recently moved his office into a state-of-the-art building at a new location.
“We have patients who had been going to the old building for 30 years. They were sad to leave. But we couldn’t provide them with the quality medical experience this new building provides. It’s the same thing for the high school,” Traynor says.
As a volunteer with the bond campaign, Traynor has heard from students, teachers and the school board. After a comprehensive study, district leaders learned they could renovate Idaho Falls High School for $46 million or build a new one for around $70 million. They opted for a new school because renovations of an old building would not have allowed them to fully modernize the school.
“Even with the $46 million, they wouldn’t be able to get it to the level they need without a new building,” says Traynor.
IN OPPOSITION TO THE BOND
Tom Bailey is the vice president of Quality Steel in Idaho Falls and has experience fabricating and erecting structural steel for schools. He sees the $110 million bond as wasteful and is opposed to it.
“Right now we don’t have a cost-effective option. We have a contractor saying it’s going to cost $110 million. That’s not the world I live in. Something doesn’t smell right,” Bailey says.
Lisa Keller, a local real estate agent, is the spokeswoman for D91 Taxpayers, a group opposed to the bond. She says she would like a new school, but the price tag is too high.
“Regardless of the district’s questionable tax assumptions and claims of no tax rate increase, we, the taxpayers, will be paying this off for the next 20 years. We see this huge, new unnecessary debt as a bad example to our children and a poor legacy to leave to them,” Keller says. “It’s simply irresponsible.”
THE BOND, TAXES AND YOUR WALLET
Proponents of the bond says taxes won’t be increased as a result of the bond, but is that even possible?
It could be, but perhaps not in the way you are thinking. The overall tax burden in the district will increase if this bond is passed. When a debt is levied against property taxes, taxpayers are responsible to pay the new debt over a period of time.
“I hate the idea that a person increases the budget and thinks that it doesn’t increase taxes because it does,” Bonneville County Assessor Blake Mueller tells EastIdahoNews.com.
However, just because the tax burden goes up, that does not necessarily mean the tax levy rate will increase. Nor does it mean patrons will see their monthly or annual property tax bill go up as a result of the bond.
Carrie Smith, the school district’s director of finance, says the district can maintain its tax levy rate (the percentage of money it takes to pay off the debt) because the region has seen sufficient market growth. That growth means more money is coming into the county because more people are paying property taxes, and home values have risen.
Consider this analogy: say you have $1,000 and are taxed at 10 percent. $100 goes to the government. If you get $1,200, your 10 percent tax rate becomes $120. You’re paying more taxes, but the tax rate remains the same.
In this case, Bonneville County is receiving more money from patrons because home values have increased since the last school bond passed.
This means households are already paying more taxes than in previous years. District officials say this excess money will compensate for new debt and allow the school system to maintain the same percentage of taxes they are taking from homeowners.
In summary — the district is getting more money from each household, but that’s not because you’re being taxed more by the district. It’s because you are already paying more, and the district is just taking a larger portion of that pie.
IF THE BOND DOESN’T PASS, WILL TAXES DROP?
Opponents to the bond are asking if the bond fails, will taxpayers benefit financially?
“If we weren’t going to spend $110 million on it, what would happen to our tax rate? Would it go down?” Keller asks.
It wouldn’t actually matter.
Provided the tax base continues to grow, the district’s tax levy rate will remain the same after the bond is passed. Any increases or decreases to local property values will have been caused by other factors and not the school bond.
WHAT IF THE GROWTH STOPS?
For this scenario to work, and the tax levy rate not increase, the tax base in the district has to continue to grow for at least 11 years.
If property values decrease at any point, the school system may need to increase its levy rate to pay off the debt.
D91 Taxpayers representatives say the district’s claims are misleading, since growth occurring at the necessary rate to keep the tax levy rate the same is not a sure thing.
There is historical data to support that belief. Bonneville County numbers show that between 2011 and 2013, the tax base declined rather than increased.
But district leaders say they are confident they will see the growth they need.
Wimborne agrees that there were several years of decline, but said there has also been years of double-digit growth. She says the district’s growth rate over the past 20-year period is 4.29 percent.
“The idea that we’re going to have zero growth for (the next) 20 years is not based in reality. Just drive around the community. There are new subdivisions and new businesses,” Wimborne says.
The district’s bond election planning report, published by financial firm Piper Jaffray in Boise, shows the district needs an estimated 6 percent projected growth rate for 2018, which is calculated based on current trends. About 5 percent growth will be needed for 2019 and 2020. And between 2021 and 2029, the report estimates 2.5 percent growth will be needed to maintain the tax levy rate.
This means the district needs to continue to grow its tax base for at least 11 years to maintain the tax levy rate. If that doesn’t happen, the district says is has sufficient savings to cover added cost.
Bonneville County records show there is already sufficient growth to meet the needed 6 percent in 2018. But there are no firm numbers after 2018.
Also keep in mind, that although the tax base has increased, growth in student enrollment has remained steady. In the past four years, enrollment at both District 91 high schools has increased by 3 to 5 percent.
HOW MUCH DEBT?
This isn’t the first bond measure that has gone to the ballot in the last decade.
In 2012, District 91 passed a $53 million bond to build four new elementary schools and complete renovations across the district. About $37.5 million still needs to be paid on that bond.
If this new bond is approved, the district’s amount of debt will skyrocket.
Based on current projections, the 2012 debt will be paid off by 2032.
“(The proposed bond) is set to take the district debt from about $40 million to $185 million – an increase of over 460 percent,” Keller said.
District leaders say they are equipped to handle the debt.
Smith says market growth has allowed the district to build up a significant savings fund that will help cover any dips in the market and allow for the levy rate to remain the same.
“We also have a strong fund balance in our general fund. That gives us another cushion if any projections fall short,” says Smith.
The $110 million bond payment would require an $824,000 payment for 2018 and fluctuate every year thereafter until the previous bond is paid off. The new bond will be paid off by 2039, officials said.
Another complaint from some opposed to the bond is District 91 illegally or inappropriately hired a contractor for the construction or design of the high school without a bidding process before the bond was even voted on.
“They interviewed all the architects, chose one, and then said, ‘Go ahead and do it,’ instead of saying to the architect, ‘We need to be wise fiscally,’” Keller said.
But District 91 officials say they haven’t broken any laws. A company was paid to design a new school, and a construction contractor has been selected. However, the companies that will complete the work have not been hired.
Additionally, the district says it looked at many design firms before selecting one.
“We have attorneys involved to make sure that everything we do is in accordance with state law, so those allegations make no sense,” District 91 Superintendent George Boland said. “What people are alleging is that design professionals were put on contracts without bid. You don’t bid for professional services. That’s not the way you select a design team.”
Boland says the established practice is to fill out a request for qualifications, send it out and evaluate those who respond. During an interview of the top candidates, costs of service are negotiated.
Once the design phase is over and a bond is approved, the district is legally obligated to take bids on the construction work and choose the companies with the lowest price.
A two-thirds supermajority is required for the bond to pass.
If it does, the project will begin immediately and is scheduled to be completed by the fall of 2021.