WHY IS THIS PROJECT BEING PRESENTED AT THIS TIME?
- As a result of State aid cuts, the Board is seeking to save costs by consolidating the schools.
- Interest rates are at 30 year lows.
- State aid for the project is available now ($2.5 million). Window may close in future.
- Locks in ability to use capital reserve towards project and protects capital reserve from being applied in accordance with potential state mandates.
- Current financial environment allows referendum to move forward on a tax neutral basis.
WHAT IS A BOND REFERENDUM?
A bond referendum is an election conducted by a Board of Education seeking voter approval to undertake capital improvement projects to a school and to finance such projects through a long term loan (a bond).
WHY NOT JUST PAY FOR THESE PROJECTS OUT OF THE BUDGET?
A bond referendum is the only way that a Board can borrow money to finance significant capital improvements over a long period of time. Otherwise, major improvements can only be done in very small increments over multiple budget cycles.
In addition, bonding the projects allows the School District to access State funding for the projects.
Additionally, bonding over a long period allows the many generations that use the improvements to pay for the projects.
WHY CAN'T THE SCHOOL DISTRICT JUST INCLUDE THESE PROJECTS IN ITS ANNUAL SCHOOL BUDGET?
The annual school budget currently has a 2% budget cap on the local tax levy. Given this restraint, it is very difficult to fit projects of this magnitude in an annual operating budget without harming the excellent academic programs that our students deserve. Because there is a "cap" on how much the regular operating budget can increase each year, major, costly replacements cannot be undertaken through the annual budget.
Additionally, once installed, such major replacements last a long time, many years in fact. The Board would like to borrow for such improvements and spread the cost of the improvement over the generations that will use it rather than have the current taxpayers pay for it in one year.