To The Sun:
Voters in Cherryvale-Thayer USD 447 will go to the polls on Nov. 6 to decide if now is the right time to make improvements to district schools with a bond issue.
The bond election proposal requests the authority to issue no more than $12,715,000 in general obligations to finance the capital improvements.
The board of education and district believe that now is an advantageous time to consider needed improvements to attendance centers in Cherryvale and Thayer.
There are two factors that make this a good time to address facility needs: (1) interest rates; and (2) additional state aid to help retire the proposed bonds.
A bond issue is a financing tool, much like a loan available to school districts, cities, counties and other municipal entities. Because schools serve a significant public purpose, USD 447 can finance projects with a loan that is income tax free to investors. The district’s financial adviser has estimated the rate on the proposed bonds at 4 percent. Although rates have risen in recent months, this rate is still attractive compared to rates in the last decade. Once the bonds are sold, the rate is locked in and cannot go up. If bond market rates go down again in the future, the loan can be refinanced to lower the interest cost through refunding.
The major benefit for USD 447 is eligibility for additional state aid to help retire the bonds. The Legislature adopted law in the early 1990s to encourage and assist local school districts to improve their schools with a bond issue. The percentage of state aid offered is based on a district’s wealth (tax base) and enrollment — district wealth per pupil. This number is placed on a grid with all other Kansas school districts to determine the percentage of state aid to support a voted bond issue.
For fiscal 2018-19, USD 447’s percentage is 46 percent. With approval and issuance of the bonds, the district would receive 46 percent of both principal and interest on the bonds — a benefit of more than $10 million based on the 4 percent interest rate estimate. These are tax monies (property, sales and income taxes) collected throughout the state and redistributed to districts that have approved bonds under the legislation. USD 447 schools are eligible for one of the highest percentages under this program. It is important to note that the percentage of state aid can and will probably fluctuate slightly in future years as the grid is adjusted annually. The offer of state aid for bond issues may not always be available in the future, but state aid would continue for bonds that have passed prior to any law changes.
Another important fact is that USD 447 has no existing bond debt. A previous bond issue approved in 1996 was retired several years ago. The result is that the district has one of the lowest total mill rates in the area and in the state.
Based on the interest rate estimate of 4 percent, the bond issue is estimated to require a mill rate of 14.9 mills.
A mill is $1 of tax on each $1,000 of assessed valuation of property in USD 447. The estimated tax impact on a $50,000 home is additional taxes of $7.14 per month. The estimated annual tax on grassland is 34 cents per acre. The estimated annual tax on dry land farm ground is 63 cents per acre annually.
Voters in Cherryvale-Thayer USD 447 are encouraged to get the facts and to vote on this important question impacting the future of education in its schools. If you have questions about the bond and proposed improvements, you are encouraged to call or email me at (620) 336-8139 or email@example.com. — DR. SHELLY KIBLINGER, USD 447 superintendent