OK, Susan, time to get your schedule constructed!
Everyone,
As you know the election is Sep. 16.
At this morning's meeting, we set the dates of the public
informational meetings. Wed. Sep. 3 at 7:00 pm,
and Sat. Sep. 6 at 10:00 am.
Both at Elementary Gym.
The other thing we decided was the approach to take with financing,
which results in an estimated tax levy of
$2.50 per $1,000 of valuation. This is NOT a typo.
Yes, last time it was $2.93 per $1,000 for the $16M bond,
and this time it is $2.50 per $1,000 for a $17.3M bond.
You may ask: "What is this snake oil salesman really selling?"
We are adopting the recommendation of our fiscal agent
(the bonding company) and using a
"proportional debt service schedule"
instead of the traditional (and previous)
"level debt service schedule".
What this means is that as property valuations go up,
the amount of principal we can pay on a loan (bond) increases with
the same tax levy, so the payment stays "proportional" to the
property valuations as they increase. This allows the tax levy
to start out smaller, but it will remain more constant,
or at least not decrease as much over the life
of the repayment schedule.
Previously, no estimates of property valuation growth were included
in the bond repayment schedule. So, as valuations increased the
levies went down more each year. One would think the public would
appreciate their levies going down each year, but no one keeps track.
No one.
No one ever realizes how much their individual levy on school taxes
goes down each year. Their property taxes go up each year because
their VALUATIONS increase, not the levies. So, because no one keeps
track of levies, we think giving them a lower starting point is a
good selling point, as opposed to giving them a lower ENDING point,
which does not get publicized, and which no one is even aware of.
The property valuation growth estimates included in the repayment
schedule are 3% for the first 5 years, 2% for the next 10,
and 1% for the last 10. The actual increases in our district have
averaged 8.6% in the last 16 years, and 8.12% in the past 5 years.
We believe this is a very conservative, and fiscally responsible
approach. For the public, all they care about is how much their taxes
are going up. With this approach, the answer is "less".
Using the old, "level" approach for the current Middle School bond has
resulted in levies that look like this:
1999 - .59
2000 - .47
2001 - .55
2002 - .54
2003 - .58
2004 - .55
2005 - .55
2006 - .45
2007 - .40
Though it looks erratic, this includes 2 separate refinancing actions
to reduce the length of the bond and interest rate,
which eventually reduced the levies even more in the long run.
This is a 32% decrease in eight years, or an average or 4% each year.
With the "proportional" approach, these types of decreases would be
less in magnitude, but will decrease nonetheless. And remember,
the levies would start out at a lower point, with the resultant amount
paid about the same.
And, when this Middle School Levy is paid off in a year or two,
the $2.50 increase required for the bond will be a
net $2.10 or less by then.
This approach has been used recently at Brandon, Harrisburg,
West Central, and elsewhere. The bond for Harrisburg, for example,
done by the same company, included a "conservative" growth
estimate of 7% in the Harrisburg property valuations.
The first 2 years of the bond the actual increases have been 28%.
As you can see, they tailored the grow estimate for our bond to
the Dells district - not at 7% the first 5 years, but at 3%.
So, entirely reasonable.
After this very lengthy explanation, your mission, Jim,
should you decide to accept it, is to help construct a brief,
concise explanation of the new and reduced levy of $2.50 for a new
and increased bond of $17.3M, without the public accusing the board
of not telling the truth, believing there is no way this is possible,
wondering what else we are hiding from them, etc., etc.,.......
This message will self-destruct in 10 seconds................
Brent was there:Though it looks erratic, this includes 2 separate refinancing actions
to reduce the length of the bond and interest rate,
which eventually reduced the levies even more in the long run.
This is a 32% decrease in eight years, or an average or 4% each year.
With the "proportional" approach, these types of decreases would be
less in magnitude, but will decrease nonetheless. And remember,
the levies would start out at a lower point, with the resultant amount
paid about the same.
And, when this Middle School Levy is paid off in a year or two,
the $2.50 increase required for the bond will be a
net $2.10 or less by then.
This approach has been used recently at Brandon, Harrisburg,
West Central, and elsewhere. The bond for Harrisburg, for example,
done by the same company, included a "conservative" growth
estimate of 7% in the Harrisburg property valuations.
The first 2 years of the bond the actual increases have been 28%.
As you can see, they tailored the grow estimate for our bond to
the Dells district - not at 7% the first 5 years, but at 3%.
So, entirely reasonable.
After this very lengthy explanation, your mission, Jim,
should you decide to accept it, is to help construct a brief,
concise explanation of the new and reduced levy of $2.50 for a new
and increased bond of $17.3M, without the public accusing the board
of not telling the truth, believing there is no way this is possible,
wondering what else we are hiding from them, etc., etc.,.......
This message will self-destruct in 10 seconds................
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