Monday, December 15, 2008

Anchorage School District Wants To Serve Up A Whopper; $98 Million School Bond Proposal Contemplated For The April 7th, 2009 Election

Because the Anchorage School District has experienced success with bond passage during the past two elections, perhaps they've forgotten that school bonds aren't always a slam dunk here. They've put forth a proposal to be discussed at the ASD school board meeting on December 15th, and it's a whopper. ASD Memorandum #192, which describes the proposal, can be read HERE. Media story with video by KTUU Channel 2.

$98,625,000. Ouch. I can just hear Dan Fagan now.

In summary, ASD's Capital Request Advisory Committee (CRAC) met on October 15th, 2008 and November 3rd, 2008 to review options and develop recommendations for a spring 2009 bond. The Committee recommended two bond propositions totaling $98,625,000. The projects are listed below:

-- Service HS Addition and Renewal $68,000,000
-- Girdwood Design $681,000
-- Districtwide Site Acquisition $6,500,000
Sub-Total $75,181,000

-- Districtwide Building System Renewals Project Cost
-- Districtwide Code/Sprinkler Project $700,000
-- Districtwide Roof Replacement Projects $2,020,000
-- Districtwide Building Renewal Projects $901,000
-- Districtwide Electrical Projects $3,867,000
-- Districtwide Mechanical Projects $4,051,000
-- Districtwide Traffic Safety Projects $5,870,000
-- Districtwide Field Renewal Project $2,379,000
-- Districtwide Security System Upgrade Projects $1,156,000
-- Eagle River High School Water & Sewer Extension $2,500,000
Sub-Total $23,444,000

Grand Total $98,625,000

ASD Memorandum 192 provides more details on these projects. The school board meeting agenda, which provides other necessary information, can be viewed HERE.

The indicated total assumes NO debt reimbursement. If a minimum 60 percent debt reimbursement is obtained, the grand total would be reduced to just under $40 million (this is a projected conservative estimate at this time).

Mitigating the potential cost to Anchorage property taxpayers is the tradition of successfully obtaining 60-70 percent debt reimbursement from the Alaska State Legislature for ASD bonds. Legislatively, HB373, passed in June 2008, locks in a minimum of 60 percent debt reimbursement on all voter-approved school bonds through November 2010. But with plunging oil prices expected to cut state revenues to around 65 percent of their current levels next year, and only 50 percent of current levels by 2010, debt reimbursement can no longer be considered a guarantee. The legislature might change its mind and choose a lower level of reimbursement, or perhaps dispense with it altogether. The school district should prepare for that possibility.

In the memorandum, ASD also points out that while they're asking Anchorage property taxpayers for an additional $98 million, they've retired approximately $46 million of bond indebtedness between the April 2008 election and the upcoming April 2009 election. In theory, this reduces the net cost of the new bond to around $52 million, before factoring in debt reimbursement. When bonds are retired, the corresponding property taxes drop.

So, factoring in $46 million dollar bond retirement, and assuming at least a 60 percent debt reimbursement dropping the proposed $98 million bond to $40 million, this means the net change in obligation would be minus $6 million. The question is, will the voters do this type of homework, or will they just look at the initial $98 million price tag and immediately gag. History shows the larger a school bond, the more difficult its passage. In 2001, a single catch-all school bond, Proposition 12, which called for $122,035,000, failed with 51.27 percent voting No.

The Anchorage School District should not only sell the prospect of debt reimbursement, but should also prominently advertise the amount of existing debt being retired in order to present taxpayers a true picture of the expected obligations. ASD has not always properly emphasized the effect of bond retirement on tax obligations. This will make the $98 million figure less scary.

3 comments:

  1. Self says, "Yah, don't pass the fuckin' bond. Keep you ya-hoo redneck bastards ignorant and stupid." And put the Palin bitch out of office. TrooperGate deserves impeachment. And the Republicans ran that bitch as VP? MUHAHAHAHAAHA

    Fucking Rednecks.

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  2. Wow...what an intelligent reply to a serious subject. Why are idiots like "Spngebob" in chaege now?

    Maybe increasing property taxes even more as the nation braces for a long recession under Socialist Obama is a bad idea. When the ASD uses the funds I give them well, then I may consider giving them more. Vote no and let's elect Sullivan mayor.

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  3. Anonymous said:

    Why are idiots like "Spngebob" in chaege now?

    Self thinks maybe your spelling teacher put self in charge, maybe so.

    Self thinks anonymous moron should whine less about Great man Obama and look more to the Republicans for the seat of the problem. To wit: President Bush who ran national debut to insane levels. To wit: Republicans like McCain who spearheaded the deregulation of Fanny Mae and Freddy Mac. Though self notes that finger pointing will do little good now.

    Fucking Republicans. Never again! That was the cry after Hoover, HOO HOO HOO Republicans got over on us again! Ruin Economy for second time. Yes, indeed. Now before anonymous pussy starts whining about socialism try to remember that money spent over here on OUR PEOPLE is still better than the Billions of dollars Bonzo Bush has spent over seas looking for WMD's that DON'T EXIST.

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