What is a School Bond?
A school bond is debt, offered to the public, which must eventually be repaid with interest. A bond can be structured to be paid back over as many years as the district deems necessary. In Idaho, a bond requires a supermajority (66.67%) to pass and is voted on before the bond is issued. A bond is only to be used to acquire, purchase, improve, build, renovate, repair and/or equip a school facility.
What are the problems being addressed?
The Sugar-Salem School District has two problems that need to be addressed with this next bond election.
- Student Growth. Since the early 2000s the school district has been steadily gaining enrollment in every school by nearly 20-30 students each year. District wide, the increase is nearly 350 students in that time. A new school will be able to accommodate the Junior High growth as well as alleviate the pressure at Kershaw by moving the 6th grade to the new building.
- Increased Maintenance Expenses. The school district is also experiencing increased maintenance expenses in the buildings as they age, particularly at the Junior High School. Currently it is estimated that over $500,000 in repairs and maintenance is needed at the Junior High, in addition to the yearly maintenance costs. A new school would allow patrons to put their tax dollars towards a facility that meets current and future needs.
Why is it necessary to act right now?
The student population is above capacity at Central Elementary, Kershaw Intermediate and the Junior High. To accommodate these student numbers, the school district is using modular buildings at Central and Kershaw. To manage growth at the Junior High, teachers are sharing classrooms, the library is being used as a classroom and the school district has purchased another portable which will provide two additional classrooms.
Where will this new Jr High school be built?
The proposed site would be on the land donated to Sugar-Salem School District by Glenn Dalling. The property is located directly north of Central Elementary, along 3rd North.
When will it be built?
The $17 million bond measure will be on the August 27, 2019 election ballot. If the bond is successful, the design of the new school will proceed with design completion in February of 2020. Subcontractor bidding will begin shortly thereafter, with construction beginning as soon as the weather permits. A project of this magnitude will take approximately 18 months to build, giving a move-in date of August of 2021.
Why not build a high school instead?
The bonding capacity for Sugar-Salem School District currently is $19 million. Based on current construction costs, building a new high school would cost nearly double that amount.
Are we really out of space at our junior high?
The junior high currently has four classes meeting in the library, rendering it ineffective as a library and making it an overflow classroom. Several teachers are sharing their classrooms and must move in and out of their rooms for their preparation time. The district also just placed a new modular building at the junior high providing an additional two classrooms.
What will the school district do with the current Junior High facility?
The school district has several options for use for the current junior high building. The preferred option would be an agreement with the YMCA, in which they would re-purpose the building to serve our community’s youth in a different capacity.
Do other schools need to be added onto as well? Why just the junior high?
Kershaw is also very full. A new junior high will be able to alleviate the pressure at Kershaw as well, by moving the 6th grade to the new building.
What will the district need to do if the bond does not pass?
Growth and the problem of overcrowding at Kershaw Intermediate and the Junior High need to be addressed. Through substantial research and input from the community, it has been determined that a new junior high is the best option for addressing our current and future needs. If the bond does not pass in August, the School Board will continue to ask for the support of the patrons by placing the bond measure on future ballots. In the short term, the school district would continue to add modular classrooms to meet the needs of our growing student population.
How much will it cost?
The school district has consulted with local architects and contractors to establish a budget of $17 million for a new junior high school capable of housing three grades and accommodating future growth. This budget accounts for the required schedule of completing the new junior high school in time for the 2021-2022 school year.
How will my annual taxes be affected by the bond?
The new tax rate would be 0.345%, or $345/year per $100,000 in assessed property value. This tax rate is slightly higher than the 2019 rate, but lower than the previous four years (2015, 2016, 2017, and 2018). The 0.345% tax rate includes the May 2019 $200,000 levy.
The increase would be approximately $62/year, per $100,000 in assessed property value, higher than the 2019 rate.
The average rate for the past 20 years is 0.402% or $402 per $100,000 in assessed value. The current bond will be less than the 20-year average.
What happens to the taxes that are collected?
The following summarizes the tax costs for both this current year as well as the projected tax rate if the bond passes in August.
Taxes at current rate (0.28349%, or $283.49/year per $100,000 in assessed property value)
$217.34 pay off existing bond
$62.10 supplemental levy
$4.05 tort levy
Taxes at future rate (0.345%, or $345/year per $100,000 in assessed property value)
$301.75 pay off new bond for the Junior High
$40.23 supplemental levy
$3.02 tort levy
How is the bonding capacity determined?
The bonding capacity is determined by the debt capacity of the school district, which is 5% of the market value of property in the school district, less outstanding debt. This is determined by state law (Idaho Code Section 33-1103). In the 2018-2019 fiscal year, Sugar-Salem’s taxable value was $389,232,472, putting the debt capacity at $19,461,623.
How long is the duration of the bond?
The bond will be set for a 20-year payoff. However, if our community continues to grow at an annual rate similar to that of the past 15 years, the school board anticipates that the bond could be paid off in as little as 12-13 years.
How can the school district pay it off so fast?
The school board anticipates being able to pay the bond off faster than 20 years for two reasons:
- Continued growth in the Sugar-Salem School District means more tax payers contributing to the payment of the bond. Sugar-Salem School District has a 15-year growth rate of 5%.
- The Idaho School Bond Levy Equalization Program allows Sugar-Salem School District to qualify for a subsidy to offset bond payments. In total, this program has paid for over 30% of Sugar-Salem’s last two bonds. While the annual rate fluctuates, the school board anticipates that this program will continue to contribute substantially to paying off the bond.
Why do we need a bond? Doesn’t the State pay for schools?
The State of Idaho does NOT fund school buildings. The only way school districts can raise money for large construction projects is to ask patrons to approve a bond.