Sunday, March 9, 2014

Opinion: Realities of the proposed $404,000,000 bond

Susan Wilkins said...
The proposed $404,000,000 bond measure is a HUGE amount of money. It just seems like a small amount when compared to the previous $755M bond measure. To suggest that it will cost taxpayers only $10/month or a couple cups of coffee to pay off is utterly ridiculous. Our school board rushed this bond measure and didn't bother to check their math. Their calculations are wrong! The bonds will cost nearly 4 times as much as the district states!

Intuitively, $404,000,000 paid back over 20 years will cost $20.2 million per year just to pay for the principal. With 4.25% interest, taxpayers will need to pay back about $30 million per year, about the same amount as the Capital Projects Levy that just passed or $.91/thousand in assessed value. So paying off $404 million will cost the owner of a $500,000 house about $450 per year or $40 per month, not $10/month.

Sammamish residents are the biggest losers with this bond measure. They get nothing! No additional elementary classroom space, no new eastside ICS choice school (as was promised), and no new middle or high school space.   Read More >>
At the Lake Washington School District work session on February 24, Board President Jackie Pendergrass explained the rationale for no new classroom space on the Sammamish Plateau by stating, "We have dealt with their (Sammamish's) growth for a lot of years and they have the newer schools." Apparently, Sammamish will have to wait 4 years before they might get some funding for classroom construction.

Even though all 5 elementary schools in Sammamish are full or overcrowded, and Smith Elementary and Mead Elementary are both acutely overcrowded with 601 and 630 students respectively, (almost as overcrowded as Rockwell Elementary), there will be no new elementary space added in Sammamish. Inglewood Middle School is packed with 1125 students, but they will not get any new classroom space to ease overcrowding. Sammamish is adding lots of new housing units. Older residents are moving out and new families with children are moving in. Sammamish already has a school overcrowding problem that will only get worse each year, but they will get no new classroom space - although they will be required to pay $40/month for the bonds for the next 20 years.

Sammamish residents should be furious. They were never warned that the district would propose a bond measure that would cut them out of the construction funding completely. (Note that the Agenda for the March 3, 2014 school board meeting that was distributed on Friday, Feb 28 only stated that there would be two possible bond measures proposed at the March 3rd school board meeting. The text of the two bond measures wasn't published on the website until 1:39 pm on March 3 - giving Sammamish residents just 5 hours and 21 minutes to read the resolutions before the start of the school board meeting.) The school board should be ashamed of their sneaky, deceptive tactics.

The $404,000,000 bond measure will appear on the April 22, 2014 ballot, and most constituents were never given the opportunity to read the resolution - or to comment on it - before it was approved and sent to King County Elections


Anonymous said...

Dr. Pierce was out of touch when she thought a three quarters of a BILLION dollar bond to tear down several schools while building new ones at the some time would pass.

When will LWSD learn that voting (again) against LWSD's form of modernization is the NEW reality? Taxpayers have changed their mind since this new form of modernization was originally approved a decade ago.

It's ridiculous that LWSD is JUST NOW realizing the bond was simply asking for too much. It's time to get new leadership at LWSD!

Ellie O'Rourke said...

Ellie O'Rourke With all due respect, Susan, while you attempt to throw out some interesting data points to assert your knowledge on the matter, you seem to contradict yourself and are missing the big point here – WE ARE FACING AN OVERCROWDING ISSUE IN REDMOND NOW. THIS IS REAL AND NOT IN THE FUTURE.
All you have to do is go onto the website to see NINE new housing developments under way in Redmond, many of which are in the North Redmond/Education Hill area, hence the large roundabout that the City has already put in place to accommodate for the traffic that is already happening (before the development is even in place!). I have sat in on city planning calls, and have listened to conversations regarding overcrowding at the municipal level to include traffic, infrastructure and the like, and yet education still remains top concern for all citizens on these calls.
It’s a wonderful thing to live in a thriving economy (thanks to some great companies in the area), yet we are facing a crisis with our schools and our kids, and our State is doing nothing about this to help. Yes, $404M dollars is being asked. That money should have been given to us from the State and others, but this is our current situation. We can continue to argue about taxes, or we can stand up and do right by our kids and our future. WE MUST ACT NOW OR THERE WILL BE CONSEQUENCES.
On the one hand, you talk about the dollar amount being too high, yet you also assert that Sammamish should get more money for more classroom space. No matter what our District tries to do to alleviate the overcrowding problem, we just can’t seem to please you. Yet the reality is that just recently Sammamish had several new schools built in their area, including a STEM school and Eastlake (more data points and info on this to come). And based on future projections, Sammamish is not facing the same overcrowding crisis right now that the Redmond Learning Community is facing across the board. Not just Rockwell…many schools. That said, Sammamish will benefit from the new West side STEM school on Juanita High School property, as it will free up to 200 more seats for local students for the east side STEM school. There was a huge waiting list of over 2,000 students for STEM last month. So to say that Sammamish gets nothing out if this is untrue. Our entire District is in on this problem together. If this Bond measure does not pass, the District will be faced with redrawing boundaries across the District amongst other drastic measures (see March 6th Blog post on this).
So we can sit around and argue about whether the amount is too high, or we can take action now and stop the overcrowding hemorrhaging that our schools are facing. You are not the one sitting in a portable day in and day out. So if you want to continue arguing this for years to come, I suggest you try it from a portable with no running water and improper safety conditions and then tell me if this is okay for our kids. We owe them better than this, and we (as tax payers) have the means to do this.

21 minutes ago · Edited · Like

Anonymous said...

I have a very low opinion that the money will be used efficiently. I also suspect that the initial ask of $700M was intentionally kept ridiculously high with the full knowledge that it wont pass, so that they can come back and ask for half the amount and we would think that its probably appropriate. Forget about that initial 700M.. just think about this, they are asking for half a billion dollars for schools, dont you think that sounds a bit excessive? What assurances are they giving us that this money will be used efficiently? I guarantee that if I were to spend this money for a project I own, I would probably need half that amount. The Pork must be chopped from this budget and bids must have competition. I dont see any of this only that they are asking half of what they had asked before.. bs I am not voting for this until they assure me that the money will be efficiently spent. I didnt even vote last time, bit this time I will make sure I will vote and also bring in a few of my friendly neighbors to the voting booth.

Anonymous said...

Back of the envelope calculations can be useful for understanding complicated problems if they keep just enough of the important information to come up with an approximate solution. Unfortunately when they throw out too much of the detail they can lead to misunderstanding. I believe Susan Wilkins calculations left out some important information and are therefore misleading. Our tax levy is made up of multiple levy and bond measures that we have voted for over the years. Old measures expire or get paid off as new measures are added. The Lake Washington School District answered the question "How much more than I am paying now will I have to pay if this bond passes?" This is what is meant by "tax impact". We currently pay $1.31 per $1000 of assessed value. If the bond passes, we will pay $1.56 per $1000 of assessed value, or 25 cents more per $1000 of assessed value. Since this is a discussion about the schools, think of it this way: If a teacher has 30 students in their class, 5 students move away, and 8 students move in, the impact of population change to class size would be 3 students - not 8. Susan Wilkins ignored the fact that some components of the current tax will be phasing out. It will cost about 60 cents per $1000 of assessed value to pay off the $404 million dollar bond over the course of 20 years, however, because the older components of the tax rate are phasing out it would be incorrect to just add that to the current rate to come up with your new tax rate. Not voting for the bond would actually imply a tax cut - which in light of the ever increasing numbers of students - would seem irresponsible.

Susan Wilkins said...

Is an expiring tax a tax cut? Is a replacement levy a new tax - especially if the levy rate increases? This is an ongoing debate about levies and taxes that has been going on for a long time.

Concerning the outstanding and proposed LWSD construction bonds, here are the numbers:

Between 2014 and 2029, LWSD taxpayers will pay an average of $40.3 million per year to pay off the 1998 and 2006 modernization bonds.

From 2014 through 2018 we will pay an additional $6 million per year to pay off the 2012 bonds. The 2012 bonds will be completely paid off in 2018 - about the time that payments for the 2014 bonds start increasing.

The 1998 bonds will finally be paid off in 2017, removing another $10,000,000 per year from the annual bond tax collections, but that $10,000,000 reduction would be replaced by payments on the 2014 bonds.

My calculations state how much the $404,000,000 bond measure will cost. The district is stating how much more an average homeowner will pay each month as old 1998 and 2012 bonds expire and new 2014 bonds kick in.



Voters need to decide if it's worth it.
And let me also point out that these are not back-of-the-envelope calculations. I co-wrote the CON statement for the Feb 2014 voter pamphlet so as part of my research I painstakingly read through each of the Official Statements posted on the Municipal Services Rulemaking Board website for each of the Lake Washington School District's bond offerings (see CUSIP=495260). I have a rather large spreadsheet with details of all the bonds that the district has issued. Compared to other school districts, we have a lot of bonds outstanding and we owe a lot of money.

Anonymous said...

While I appreciate and deeply respect the fact that you took the time to examine a "large spreadsheet with details of all the bonds that the district has issued" I must point out that you did not include those details in your original post, so characterizing the short calculations actually presented as "back of the envelope" is fair. Most if not all calculations presented in this sort of forum are by necessity simplified. Furthermore, it seems from your response that you do not disagree with the tax impact (how much more will I pay) as stated by the district, you just think they should have stated the total cost (how much will I pay for this) in addition, or perhaps instead. If that is the case, saying that the "board rushed this measure and didn't bother to check their math. Their calculations are wrong!" is out of line. The school board are our elected representatives and our neighbors. They spend a great deal of time trying to balance all the issues involved in running a very large and rapidly growing district. Board members have no interest in wasting tax payer money - they are tax payers too. They get no additional benefit from higher taxes beyond what we all get - better schools.

Susan Wilkins said...

OK, let's state the absolute numbers.

If the proposed bond measure passes, the combined principal and interest payments for the 1998, 2006, 2012 and 2014 bonds will average $67,600,000 each year until 2029.

Here are the annual bond payment totals (P&I) for the 1998, 2006, 2012 & proposed 2014 bonds:
2015 - $66.9 million
2016 - $65.8 million
2017 - $66.3 million
2018 - $70.6 million
2019 - $72.6 million
2020 - $61.7 million
2021 - $68.2 million
2022 - $61.3 million
2023 - $63.6 million
2024 - $66.0 million
2025 - $68.4 million
2026 - $70.9 million
2027 - $71.1 million
2028 - $69.4 million
2029 - $70.5 million (all 1998-2012 bonds expired)
2030 - $27.5 million

I do not object to paying for modernization and new construction; however, I think the district has spent too lavishly on every construction project that it has undertaken. We are deeply in debt and will be paying nearly $70 million every year for the next 15 years. Even after the proposed construction is completed, it is obvious that thousands of our students will still be in portables and half of the schools will still need to be updated.

This bond measure, as it is proposed, is too expensive and provides too little new classroom space that we truly need. We can't continue to spend $35 million for a single elementary school and $135 million to tear down and rebuild Juanita High School. We just can't afford it.

Anonymous said...