After deciding to disregard the community’s suggestions of a more modest $70M to $80M bond, the School Board has agreed with their consultant’s manipulated repayment schedule.
Upon seeing their modified repayment schedule, we now know that the proposed $48 tax rate will not be enough to pay for the School Board’s $106M bond. Even at the maximum allowable rate of $60, it would not be enough because our community’s $8B assessed valuation is not sufficient at this time to support a regular payment schedule of a $106M bond.
Time Is Money
So the bond consultant tweaked the bond’s payments by inserting 20 years of over $20M worth of interest-only payments to cover our community’s currently insufficient tax base. These proposed financial gimmicks were used to buy time. As we all know, time is money. How much more will these early short-payments cost us taxpayers over the lifetime of the bond?
2026
The use of early interest-only payments was done merely to buy time. Our inadequate assessed valuation might have a chance to grow large enough to start making full payments by 2026—12 years away.
Polling By the Numbers
If their proposed $48 tax rate needs payment manipulations to make it look feasible, why were the even smaller amounts of $38 and $28 used in the mid-January phone telephone poll?
What if the $38 or $28 rates had been the only ones supported by the community? Imagine what fiscal gimmicks would been used to make the School Board’s bond look fiscally possible.
Phony Poll?
Why would a School Board pay a pollster to ask the community about tax rates that now are clearly seen as being inadequate to simply fund their $106M bond measure? Why poll us on other lower tax rates that never could come close to paying off their bond? Were these just phony numbers?
Many Winners, One Loser
Let’s see who wins if the School Board’s bond measure passes: The Board gets its $106M bond, consultants get their percentage of the bond proceeds, underwriters get their share selling the bonds, and investors get their tax-free income. What about us taxpayers? What do we get? We end up having to pay off a quarter-billion dollars of debt. Looks like a win-win-win-win-lose situation.
Mr. Laase may be contacted at GMLaase@aol.com
