Kyrene School District administration and governing board members discussed raising taxes and other options to complete high priority building projects at a board meeting on Tuesday night.
An idea to increase property taxes in the area by about 64 cents was ultimately shelved for the time being. The increase would have allowed the district to take advantage of about $8.65 million in bond money during the 2013 fiscal year, which could have gone to replace roofs on several of the district’s schools.
Governing board members instead approved a motion to have a law firm run numbers on how much could be saved and used by restructuring current bond debt without increasing the tax rate by limiting the restructuring plan to what is referred to as a A-B switch. Meaning they could swap current “A” debt, which stems from bonds purchased in the late 1990s and early 2000s, to pay off “B” bond debt, set forth by voter-approved bond measures. If they did eventually approve the swap, it would close the gap between the statutory bonding capacity and B bond debt, which would bring the district closer to being able to sell bonds. Additionally, the Governing Board requested the administration to come back with other solutions to allow the district to fund high priority
Voters approved $116 million in bonds in 2010, but the district has yet to spend a dollar of it. According to the information presented by Kyrene CFO Jeremy Calles and Stone and Youngberg, if the district fails to take action and no legislation is passed then the district will not be able to utilize any portion of the bond until 2018. It could have had access to the money if House Bill 2405 was approved, but it was held up in the Senate Rules Committee and never voted on.
“We are approving a swap of B bonds for A bonds in an amount that will not substantially change the amount of… annual debt service that existed prior to the swap on those bonds,” governing board member Ross Robb said. “We are not committing to anything now until they run the numbers.”
Governing board members expressed their reluctance to increase the homeowner’s tax on such short notice. Attorneys who had been working on the project said the decision would have had to be made that evening, to allow for the county to approve the sale of the bonds before July 1 — the date when a $6.5 million payment is due for an “A” bond.
The law firm, Stone and Youngberg, will run the numbers on the A-B swap and present those to the governing board and community members at 6 p.m. tomorrow, June 14, at the Kyrene School District Office, 8700 S. Kyrene Road in Tempe.
“I personally have a problem that we don’t know the specifics (of the long-term effects on homeowners),” board member Bernadette Coggins said.
If it comes back with little to no affect on homeowner taxes, the board will most likely approve it, which would free up money to complete those high priority projects. Those projects include roof replacements at six schools — Akimel A-al Middle School, and Estrella, Milenio, Monte Vista, Sureno and Waggoner elementary schools — for a total projected cost of $7.3 million. Kyrene looks at replacing roofs every 20 years.
If the 64-cent tax was approved, it could have paid for these roofing projects and more.
Overall, looking at the average home value of $197,529, the monthly amount would have increased from about $14 to about $22. The tax increase would have been for the 2012-13 school year only, if passed.
Stay tuned to ahwatukee.com for updates.