The Midway Independent School District Board of Trustees postponed calling a November bond election Thursday night in light of newly certified property values that give the board more options on how to package the bond projects without raising the tax rate.
The board plans to meet again at 7 p.m. Wednesday to further discuss the bond issue.
The McLennan County Appraisal District recently released certified property values that show greater growth for the Midway ISD region than first estimated when the board started its bond issue discussions, said Victor Quiroga, the district’s financial adviser with Specialized Public Finance Inc. in San Antonio.
When Quiroga met with the board June 4, he estimated property value growth for 2020 would be about 4.8%, but the growth rate has been certified at 6.34%, he said. That allows the district greater bonding capacity.
With the newly certified numbers, Midway ISD could call for a $160 million bond election without raising the tax rate, Quiroga said. That is $31 million more than the trustees thought they had to work with last week.
Additionally, Quiroga said, the district’s finances are in good shape, which also helps its bonding capacity. Currently, the district will be able to pay off all its debt within 14 years.
“The district is in very good shape with respect to your outstanding bonds,” Quiroga said. “You have relatively limited debt, and not only that you’re paying it off relatively quickly.”
A Midway ISD facility study committee recommended May 21 that the school board call a Nov. 5 bond election for $177 million that would address the needs of the growing school district. The deadline to call for an election is Aug. 19.
The bond package as proposed includes building a new elementary school, eliminating intermediate schools and repurposing the buildings, as well as renovating Midway Middle School.
The school district of about 8,200 students is expected to surge to 10,700 in 10 years, according to the facility committee’s estimates.
Board members discussed last week how to fund the bond package without raising the tax rate. That left them with the option of a $129 million bond issue that would fund all projects except for additions to the high school for the career and technology education program, but trustees said that expansion could be included in a future bond package.
The discussion Thursday showed that board members still did not want to raise the tax rate, but they considered other options that include the expanded CTE program facilities.
The board considered three main options:
- a $160 million bond package with no tax rate increase that would be paid off in 20 years with a 3.35% interest rate
- a $129 million bond package with up to a 2.78 cent tax rate decrease that would be paid off in 20 years with a 3.35% interest rate
- a $129 million bond package with no tax rate increase that would be paid off in 15 years with a 2.96% interest rate.
A community survey conducted between June 24 and July 5 found little support for the entire $177 million bond package. Out of 30,758 registered voters, 1,135 verified registered voters or households participated and completed the survey. The survey was distributed to both residents and district employees.
Survey respondents showed significantly more support for a $126 million or even a $153 million bond issue. At the time of the survey, the district expected it would have to increase the tax rate by 2 cents per $100 of property value to raise the $153 million.
Board Vice President Tom Pagel said he likes the option of offering some tax relief to constituents by calling for the $129 million bond that would allow the district to decrease its tax rate and pay off some of its debt earlier than anticipated.
New board member Andy Popejoy said he believes the CTE program is important and he would like to see all proposed bond projects pass, but he understands the idea that tax relief is more palatable to voters.
Board Secretary Susan Vick said the board could go with another option, a $148 million bond package that excludes all projects at the high school but still allows for some tax relief. The risk with that option is that putting all the high school projects in a future bond package may alienate voters without high school-age children.
Board President Pete Rusek said a bond package will only help the district if it can garner enough support to pass.
“If we can’t do that, we’re really behind the eight ball,” Rusek said. “I want to call a bond that’ll pass. I’m not sure which one that is.”
Board member Pam Watts said she wanted some time to reflect on the new options presented Thursday evening.
“There’s been far too much effort and legwork and discussion getting to where we are now to decide something so pivotal in a relatively few amount of minutes. I’d like the time,” Watts said. “We have some good choices to make, and all of them are good, but that doesn’t mean they are easy.”