We hear a lot from school board candidates about whether they support the Facilities Master Plan (FMP)–now projected to have an inflation adjusted cost of $340.4 million dollars–of the Iowa City Community School District (ICCSD). We need to hear more from candidates about the FMP, particularly about who will pay for it. (To see the current FMP, click here and then click on Master Plan (Approved 04-14-15) and see page 2.)
Since ICCSD does not have the money to pay for the entire FMP, what needs to happen?
Current ICCSD board members plan to ask voters to authorize ICCSD issuing general obligation (GO) bonds in 2017. A 60% voter approval is necessary.
Where does money to repay these GO bonds, if approved, come from?
In all likelihood, your property taxes. For example, about 35% of the current property taxes an Iowa City family who resides in the Iowa City Community School District (ICCSD) pays goes toward school taxes. If you live in other communities, the percentage you pay for school property taxes will vary (e.g. Hill residents likely pay a higher percentage of ICCSD school taxes as a percent of their property taxes).
If the bond vote passes, the amount of money needed to repay this debt will be part of and added to this property tax obligation.
Even those who rent rather than own property will be affected for landlords may pass on their increase in property taxes to their tenants in the form of increased rent. Small businesses may also see their rent and taxes increase, as many business leases require the tenant, and not the landlord, to pay the property tax.
How long a time period might the repayment take place over?
The GO bonds would likely be issued over a period of years and may last up to 20 years meaning repayments may be made past the year 2040, resulting in the tax being paid for by more than one generation.
During the period of time over which the GO bonds (assuming a favorable vote in 2017) are repaid, might ICCSD’s children have additional facility needs that have not yet been identified in the FMP?
Yes. For example, some have spoken of the need to add another elementary school in the northern part of the district. This could require ICCSD to seek an additional bond vote after 2017 or force deletions of projects from the current FMP. So even if voters approve financing the FMP with GO bonds in 2017, there are no guarantees that the FMP defined list of projects will remain the same.
What is the bottom line dollar total of the GO bonds that will be needed to support the FMP?
ICCSD administration and board have not yet provided this information to the public.
In 2013, ICCSD’s administration initially projected to issue GO bonds in the amount of $118.8 million in present value dollars to fund part of the FMP. The FMP has since been amended, and while it does not show an estimate for the total amount of GO bonds proposed to be used, it does show proposed funding sources, including GO bonds, for each listed project. It is clear that the total inflation adjusted dollar amount of GO bonds will be significantly higher than $118.8 million, will likely reach at least $185 million, and may very well exceed $200 million in total by issuance time.
When was the last bond ballot issue ICCSD put before the voters, what was the dollar amount, and what was voter turnout? Did it pass?
The last bond ballot issue by ICCSD took place in 2003 and authorized bonds to be issued up to $39 million. Turnout was 20.03% of registered voters. This vote passed with 71.21% of voters voting “yes.” See here.
What percent of voters must vote “yes” for the 2017 vote to be approved?
60% or more of voters voting must vote “yes.”
How did ICCSD’s 2013 vote on the Revenue Purpose Statement go?
There was 8.09% voter turnout for ICCSD’s 2013 Revenue Purpose Statement (SAVE) vote with 56% of voters voting “yes.” See here.
However, there likely would have been less “yes” voters and more “no” voters had ICCSD’s administration announced prior to the vote its intent to close Hoover and that other Iowa City schools might close as well (later referred to euphemistically by the superintendent as “thought exercises” and by a board member as a “contingency plan”–see here.).
Full supporters of ICCSD’s FMP who want to have a 2017 vote to use GO bonds to pay for it will have to work hard to turn out “yes” voters and convince “no” voters to change their minds or stay home from voting.
Is there any chance that there will be no property tax increase—in other words, can ICCSD just substitute new bond debt for old bond debt?
No. The amount of GO bonds issued, if voted favorably on, will be in the triple digits and may even exceed $200 million. So it is not just a matter of substituting new GO bonds for the older $39 million dollar version—folks will notice the increase in their property taxes.
Can we be assured that the bond money will be used to pay for what has been promised?
Probably not. The best way to be confident that the district will build what it says is to break down the bond vote into separate projects with a vote on each and to make sure the district honors its promise to build one listed project before voting “yes” for the next listed project. Even then, there is no guarantee that the district would not repurpose or later sell a renovated building.
As currently proposed, if the bond vote passes, the FMP creates a smorgasbord of listed projects for the district to pick and choose what it prefers.
So, if the bond language states that it will be used to construct and remodel certain facilities, the district may well decide to fund some of the promised projects but not others and voters would likely have no recourse. This scenario, given the district’s past disingenuous marketing of the Revenue Purpose Statement, cannot be considered farfetched.
Further, the likelihood that one or more existing schools will be closed may actually increase if the 2017 bond vote is approved. Without a favorable bond vote, the district would likely not have the money to build all of the new capacity the administration has proposed building under the FMP. The district would then need to retain existing capacity.
Any other concerns?
With at least two top ICCSD officials, including Superintendent Murley, being considered for positions recently, ICCSD needs continuity in leadership so as to understand what is needed for children now and anticipate what will be needed in twenty years time. Elected board members must understand the underlying data, ask the right questions, balance the needs (not wants) of school children against property tax burdened families and individuals, and bring the community together to address those needs. The FMP should directly benefit our children, not burden their and the community’s families and our children’s children.