As of Wednesday, November 8, 2017
DALLAS — The Dallas School Board looked toward the future when it decided how to structure its 2014 bond payoff schedule before selling the remainder of its $17 million maintenance bond.
The district is eyeing another bond, possibly in 2021, and the board picked an option conducive to that goal.
The district will sell $7.3 million in December. It sold $9.7 million in 2015.
The board chose financing that assumes higher assessed values in the district than what Lauren MacMillan, of Piper Jaffray, proposed on Oct. 23, which estimated growth at 2.5 percent.
“We think it’s realistic to assume that we are going to at least get the 3 percent growth over the next four or five years, so raising the projection of what we think we are going to see in assessed value growth is probably reasonable,” said Mike Blanchard, a board member.
He added the district consulted with Polk County Assessor Doug Schmidt before deciding on higher rates.
The board chose an option that assumes 5 percent growth rate in tax years 2019 and 2020, 4 percent in 2021 and 2022, and 3 percent in years after that. Under this scenario, the bond will mature in 2024, but the rate drops significantly in 2023 and 2024.
That saves in interest costs and leaves the option of going to voters in a 2021 election to renew the $1.74 per $1,000 of assessed value for building maintenance.
“We’ve created a lot more room in those last two years for a new issue,” MacMillan said. “The new issue timeline would still be November 2021 or May 2022 for the election and you would essentially be campaigning on that $1.74 rate.”
Three members of the district’s citizen’s oversight committee — the group that oversees and makes recommendations on projects paid for by bond proceeds — attended the Oct. 31 special board meeting. They asked if it’s necessary to run another bond campaign.
District officials say, yes, there will be plenty of work left after the $17 million runs out.
Kevin Montague, the district’s facilities director, said when he put together a list of all the maintenance needs in the district’s five buildings, he ended up with 308 projects, some high-priority, others not so much. He attached cost estimates to each, but stopped with about 50 items left. The cost at that point added up to $45 million.
“Either we spend it on an on-going basis out of the general fund or we do it on a bond basis, but the bottom line is it’s about $2 million a year,” Montague said. “The reality is, our oldest building just turned 42 this year. We’ve got a lot of things that need to get done that are just end-of-life, essentially.”
He said that doesn’t include unexpected issues, such as testing for and reducing lead in drinking water, which arose in 2016.
Montague said he’s concerned about approval of future bonds because the projects completed in the last two — approved in 2009 and 2014 — fixed noticeable problems, such as leaking roofs and failing boilers.
A new bond would pay for items that most people don’t see, like plumbing. He said that in locations in the district, no hot water is available because pipes have rusted closed.
“We’ve got to do those things,” he said. “Replacing plumbing, it’s not sexy. Nobody sees it.”
Gary Suderman, a member of the citizen’s committee, said it’s important to let voters know the baseline cost to keep buildings working — and to be clear about how the bond funding is used to do that.
He said the last two bonds haven’t had any trouble passing and he thinks that is because the district didn’t deviate from how it said it was going to spend the money.
“We are going to have to be very mindful of that,” Suderman said. “I don’t think it’s going to be a problem if we have to go for another issue for the stuff that they don’t see if we build that trust and maintain it.”