As we’ve explained in previous posts, voters are being asked to approve mill levy override and bond issue on this fall’s ballot, known as 3A and 3B. We’ve seen a lot of false statements by the anti-tax crowd that opposes it, so today we’d like to separate fact from fiction regarding the bond.
Myth: 3B will increase the amount residents pay in property taxes in 15 years.
Fact: This bond is structured like recent previous bonds, such as those in 2004. It is a 25-year bond and the financial piece has been organized to make sure the burden to the taxpayers is consistent throughout the next 25 years.
Those perpetuating the myth that the costs will go up have forgotten that Jeffco will pay off previous bonds during this time period, which will allow them to keep the cost to taxpayers the same, whether taxpayers are paying their taxes next year or in twenty.
Myth(s): Too much (or not enough) of the bond is being allocated to new schools. Too much (or not enough) of the bond is being allocated to Jeffco’s maintenance backlog. Too much (or not enough) of the bond will be used for additions to existing schools.
Fact: The bond balances the district’s need for new schools in growing areas of the county, with the ability to create efficiencies by adding classrooms to some existing buildings rather than construct entirely new schools.
The reality is that in some areas, more classrooms at an existing school will address our students’ needs, while in other areas — particularly those that were mere fields back in 2008 — need an entirely new school. All of our existing schools also have maintenance needs, and part of the bond will also be used to address the most critical needs.
Myth: All sorts of bond money will be wasted on fees and overruns.
Fact: Any good bond will be structured so that the projects in the bond won’t exceed the value of the bond.
If you’ve done any kind of major renovation of your house, you know that the initial cost estimate is just that: an estimate. The cost of construction materials alone has skyrocketed in Jeffco in the past years as building has boomed, and those costs also affect any construction and maintenance done to our schools.
If the bond didn’t include contingency dollars and the cost of supplies inflates even more, either the school would be forced to come back and ask for more money to complete the promised projects, or they’d have to tell certain communities, “sorry, we wanted to do that but we ran out of money.”
Structuring the bond to account for inflation and to make sure that projects will not exceed the bond amount is smart financial planning — and the reason that the Jeffco Schools Financial Oversight Committee encouraged the school board members to put 3A and 3B on the ballot.
Myth: This is a “billion dollar bond.”
Fact: This is a $535 million bond and calling it anything else is just plain silly.
A bond is a lot like a mortgage. Schools borrow the amount they need, and they pay it back with interest. If you borrow $80,000 for a mortgage, you call it an $80,000 mortgage even though you’ll pay much more than that with interest. 3B isn’t any different.
The district has typically included the entire payback amount in the ballot language. While we agree that the payback amounts are shocking to see (and for that matter, think that about car payments and our own mortgages too!), there’s nothing unusual here.
As a comparison, the 2012 ballot for the voter-approved $99 million warm, safe and dry bond read as follows:
SHALL JEFFERSON COUNTY SCHOOL DISTRICT R-1’S DEBT BE INCREASED $99 MILLION WITH A MAXIMUM REPAYMENT COST OF $195 MILLION OR SUCH LESSER AMOUNT AS MAY BE NECESSARY, AND SHALL JEFFERSON COUNTY SCHOOL DISTRICT R-1’S TAXES BE INCREASED $19.8 MILLION ANNUALLY OR SUCH LESSER AMOUNT AS MAY BE NECESSARY FOR THE PAYMENT OF SUCH DEBT …
Here’s the language in this fall’s ballot:
SHALL JEFFERSON COUNTY SCHOOL DISTRICT R-1’S DEBT BE INCREASED $535 MILLION WITH A REPAYMENT COST OF $987.22 MILLION OR SUCH LESSER AMOUNT AS MAY BE NECESSARY, AND SHALL JEFFERSON COUNTY SCHOOL DISTRICT R-1’S TAXES BE INCREASED $72.6 MILLION ANNUALLY OR SUCH LESSER AMOUNT AS MAY BE NECESSARY FOR THE PAYMENT OF SUCH DEBT….
Let’s compare them.
- $99 million bond
- Total payment to not exceed $195 million
- $535 million bond
- Total payment not to exceed $987.22 million.
The repayment is similar, except in 2016 the district is able to make a better deal thanks to low interest rates. If this bond was structured the same as the 2012 $99 million bond, it actually could have had a total payment that is $71.56 million more.
We’re no math whizzes, but we think saving more than $71 million by borrowing now is a pretty good deal.
The 3B bond is a strategic, thoughtful decision that will allow Jeffco to repair, update, and build well-maintained schools for our students. We encourage you to vote Yes on 3A and 3B and hope you will encourage others to do the same.
Have you voted yet? If not, remember that you can drop off your ballot at any of the county’s drop boxes, send it by mail (though use 2 stamps just to be on the safe side.
Every vote counts, and we hope you will support 3A and 3B. Please also help us get out the vote by encouraging others to turn in their ballot and then use this fabulous profile picture to encourage even more voters to turn their ballots in too. Thank you!