Our local School Board members must remember that as our elected officials they have a fiduciary responsibility to our community.
Did any Board member think of asking consultants, “What size bond can our small community afford, given that our assessed valuation is only $8B?”
Written in Stone
Legally under Prop. 39, once this bond’s proposed $48 tax rate is passed, it cannot be altered. But as the assessed valuation of our property increases, what we, as homeowners, will pay out of our pockets also will increase every year for the next 30-plus years.
Playing the Averages
KeyGent, the School District’s bond consultant, says the average Culver City homeowner’s county assessment valuation is about $367K. In 30 years, by their long-term assumptions, it should be assessed at almost $1,150,000. Are you kidding?
More, More, More
Although the tax rate will not increase over the life of the bond. It cannot decrease, either, as our tax rates have done while paying off Measure T. KeyGent’s spreadsheet never shows how much the average homeowner’s payment will increase over the years. If you do the math, payments for the average hom owner will start at about $175 and increase to a more demanding $550 as the bond reaches maturity.
Let Me Out
More realistically, our family’s house, built in 1951, the year I was born and the only house I have ever called home, last was assessed at about 450K. In 30 years, at almost a hundred years old, KeyGent estimates our house will be assessed at almost $1,500,000. Whoa. I hope I am gone before I have to pay that tax bill.
Back to the Real World
Can you imagine an almost hundred-year-old single-story house in Culver City that has four bedrooms, two baths, den, TV room, and a pool would have a market value of well over $2M in 2044? Believe that? Neither can I.
Think About It
I wish it were true. Realistically, no one will pay over $2M for such house in Sunkist Park.
Sounds Good to Me
Bond consultants hand out these types of impressive-sounding, long-term assumptions – like their 4 percent annual increase in AV – because they are effective sound-bytes when filling in for the unknown.
But our own housing example shows how ludicrous some guesstimates can look when you play them out.
Let’s Get Real
Our elected officials should have started the bond conversation by asking their consultants, “What size bond can our community afford?” Not, “We need $106M. What do we have to do to squeeze that much out of our community?”
Comfort-Seeking
Homeowners will gain little solace from knowing that the bond tax rate never will increase when we are paying more every year.
Realistically Speaking
Looking at KeyGent’s estimated repayment schedule with its 22 years’ worth of strategically placed interest-only payments, it looks likely the School Board will be asking the community to pass its bond measure in June. Our community will not be fully capable of covering all the bond’s annual principle and interest payments until halfway through the bond’s lifetime.
Is that why School Board members waited so long to release the pertinent facts about their $106M bond?
Mr. Laase may be contacted at GMLaase@aol.com
