Wasatch Board of Education Takes Action to Save Voters Millions of Dollars on Second High School Through Utilization of Existing District Budget
Due to unprecedented, rapidly rising interest rates, and in an effort to save millions in taxpayer money, the Wasatch County School District Board of Education voted on Thursday, July 14, 2022, to issue lease revenue bonds via its local building authority. These bonds, in combination with a general obligation bond, will be used to partially finance a new high school in the most fiscally responsible way to address the explosive growth in the county.
With the passing of the lease revenue bond resolution, the District will notice and hold a public hearing in conjunction with the regularly-scheduled August 18th Board meeting prior to bonds being issued.
Last month, the District’s surveyors, Y2 Analytics, polled more than 500 voters to measure their preference for funding the new high school, with data weighted to reflect the demographics of likely voters within Wasatch County School District, specifically in regard to age, gender, political party registration, and probability of voting in the November general election. For 78% of respondents, utilizing a combination of existing capital funds and lease revenue bonds was the preferred method.
In June, the Board voted to refund its 2014 general obligation bonds to shorten the life of the bonds for the current Wasatch High School so they can be paid off more quickly, saving $830,000 in the process. The final payment on the current high school bonds will be made in 2024. The lease revenue bond payments will begin in 2025 with a similar yearly payment. If a resident receives a higher Wasatch County tax bill, it would most likely be due to an increase in assessed value or market value on their property from the county, as part of the tax correction the county is undergoing. The property tax rate for Wasatch County School District is dropping by 20% from .008246 in 2021 to .006635 in 2022.
The current estimate to build a second high school is $160M, including a contingency for possible increases in costs. The Board’s decision to fund most of the high school with lease revenue bonds was made at the recommendation of the District’s bond advisor and bond counsel, as issuing bonds immediately instead of waiting until February 2023 following a general bond election, will provide a savings of – conservatively – half an interest point, or $11.4M on $150M, based on escalating interest rates. A June 2022 survey of residents also identified lease revenue bonds as the preferred method for funding new construction.
As a result of hiring a third-party consultant to assist with a yearlong community-involved facilities master planning process, the Board has been presented with the recommendations below, with the number one priority surfaced as building a new high school as soon as possible:
It is currently the Board’s intention, depending on interest rates, to place a general obligation bond on the November 2022 ballot for the remainder of the cost of the second high school.
School districts can only fund new construction in one of two ways: By creating a local building authority to issue lease revenue bonds, which the Board did during its June 14th meeting, or by placing a resolution on November’s ballot to issue general obligation bonds. If a general obligation bond resolution passes, the bonds would be issued the following February. If lease revenue bonds are issued, the Board can take advantage of current interest rates and lock in that rate immediately.
“We are keenly aware of the burden taxpayers carry regarding school district funding, so we have been working tirelessly with our attorney and bond counsel to meet the needs of the growing student body without assessing additional taxes on our constituents,” said Board President Tom Hansen. “In funding the new high school by issuing lease revenue bonds, as provided for by state statute, we estimate a savings to our taxpayers of $10 – $45M, depending on how high interest rates go. We are confident this is the most fiscally responsible way to fund a second high school for our Valley.”
The Board is committed to continuing the committee process as plans move forward to build the new high school, with a Building Committee comprised of community members to be convened shortly.
Release from Wasatch School Board.
