School officials say $89 million in bonds can be paid off without tax increase

Posted: Oct. 6, 2014 7:11 am Updated: May. 13, 2015 6:11 pm
Dewey Elementary School, built in 1917 and showing its age with cracked walls at left, would be closed or repurposed if the Nov. 4 bond issue passes. (H-W Photo/Steve Bohnstedt)

Herald-Whig Staff Writer

Quincy School District officials insist it's possible to issue $89 million in bonds without increasing the district's property tax rate over the 20-year payback period.

That's one of the big selling points supporters cite as they encourage voters to consider approving the school facilities bond issue in the Nov. 4 election.

George Crickard, chairman of the Committee for Building Quincy's Schools, said the people he talks to about the referendum are intrigued by the notion of being able to erect five new elementary schools and an addition onto Quincy High School without seeing an appreciable bump in property taxes.

"I am surprised at how positive the reception has been," Crickard said.

Even people who pay tuition to send their children to parochial schools in Quincy have told Crickard they see the value of taking steps to upgrade the public schools if it can be down without a tax increase.

"I think people on both sides of the fence realize how important schools are to Quincy as a whole," he said. "This is an investment in the future. This is an investment in Quincy."

The Quincy School District's total tax rate currently stands at $4.13 per $100 assessed valuation. Of that amount, about 83 cents in taxes is used to generate about $6.6 million to pay off outstanding bond obligations.

Joel Murphy, the district's business manager, said several bonds are slated to be paid off over the next few years. This means the level of taxes dedicated to bond payments will gradually go down as the bonds are paid off.

Projections show the district's tax rate for bond payments will drop to around 62 cents in the 2014 tax year, 56 cents in 2015, 28 cents in 2016, 15 cents in 2017 and just over 4 cents in 2018.

By selling bonds now -- and by taking advantage of the relative low interest rates currently available -- Murphy said the district would be able to carry out a major building campaign while keeping the district's tax rate relatively steady for the next 20 years.

If the $89 million bond issue gets defeated in the Nov. 4 election, Murphy said the district's tax rate is not expected to drop significantly. This is because the district would then be faced with selling about $66 million in life-safety bonds over the next 20 years to make needed repairs to the district's existing schools, which range in age from 42 to 124 years old.

Murphy said if voters approve the bond issue, the district could avoid spending about $50 million for life-safety projects because several old buildings would be taken out of service. But the district would still have to spend about $16 million for life-safety work at several remaining buildings. This money is not included in the $89 million bond issue proposal.

To pay for the $16 million in life-safety work, he said, the district would tap into revenue from the district's five-cent fire prevention tax levy, which generates about $400,000 a year. In addition, some of the life-safety costs would be offset by an estimated $11.2 million in operational savings from closing several high-maintenance buildings and having new energy-efficient buildings.

In addition to those savings, the district expects to save more than $1 million a year in personnel costs by operating only five elementary schools instead of the 10 currently in operation -- a figure that counts Baldwin Intermediate School as three schools, since each has its own principal, secretary, school nurse and a number of other positions that could be eliminated under a five-school system.

Murphy said the district also could see some savings in lower transportation costs. He said under the proposed new system, fewer bus routes would be needed to take students to and from elementary schools each day.

In addition, by moving the ninth grade from Quincy Junior High to Quincy High School, the district would no longer have to transport about 250 ninth-graders who start each morning at QHS taking elective classes and are then bused back to QJHS to finish the school day.