BY LOUISE R. SHAW
Clipper Staff Writer
FARMINGTON — The need for a new high school and the need to address an old promise that is causing new problems has prompted Davis School District staff to approach the school board about issuing a general obligation bond in 2014.
At a workshop meeting on Tuesday, board members were told that a bond in the range of $250 million could be a way to fund a high school and other building projects that will be needed in coming years around the district.
With projected growth, Viewmont High School, which now has nine portables, would have 21 by 2018. Layton would go from its current four to 14, and Davis, which has classes meeting in spaces not intended for classrooms, would need 12 portables by 2018.
“The need is there,” said Bryan Bowles, superintendent. “We have to have classrooms for our children. That’s our responsibility. We don’t overbuild, we build what we need ... We’re just in a fast-growing population.”
The larger issue is the need to address a promise made by school board members in 2001.
At that time, taxpayers were promised a flat tax rate after bonds were purchased to finance new schools and repairs or upgrades at existing schools.
That rate, .002571, worked well for many years, and was more than adequate when voters passed the most recent bond measure in 2009.
During its first year, the district brought in $7 million more in revenue than was needed to make the debt payment.
After that, as property values dropped, the promise to keep the rate constant began to take its toll.
For other public entities, when property values decrease, a higher tax rate results, so that the same amount of money comes in to fund their services.
Because earlier boards promised not to adjust the rate, income from property taxes to pay the bond debt has declined to the point that the district is $5 million short this year.
As revenue declined, district projects were delayed or deferred. Instead of issuing $50 million each year for five years, as was originally planned, the district has drawn less each year, issuing only $20 million this year.
“That’s why we have so many portables,” said Tim Leffel, finance director for the district.
Construction of the three elementary schools promised in the bond has been delayed in some cases for a year, in other cases, more.
Funds from the overage in 2009 and from other capital programs have been used to pay down the debt in the past two years when tax revenues proved insufficient, but that money is gone.
“There’s no money in the piggy bank,” said Leffel.
It will take cuts to capital projects now used to purchase replacement school buses, repair roofs and update equipment to cover the $5 million this year, he said.
Even then, payments only cover interest on the bond and won’t touch principle until 2020.
“Nobody saw this coming,” said Leffel. “If we keep up that tax rate, we couldn’t afford to build a new school or do anything else.”
Bowles emphasized that the most conservative estimates were used to anticipate bond revenue. The significant decline in property values was unexpected.
“This is a mistake the board made because times were good,” said Tamara Lowe, board president.
Without the board’s promise, the tax rate would have fluctuated, bringing the district a constant revenue stream with which to make bond payments.
Burke Larsen, a member of the board, said it wasn’t good business to put off capital improvement to make payments on the bond. He suggested the board go to voters with the bond measure this year.
“We’re acting in good faith,” he said. “I’m always optimistic about the public when we talk about issues.”
If a bond measure went to voters, said Leffel, it would be made clear that the rate would float, as it does in other districts and for other entities.