The bond between a community and its school districts is often unbreakable and demonstrated with community support.
That bond is also, at times, demonstrated through bonds.
Bond issues, that is.
Voters are likely no stranger to bond issues, which appear on ballots during elections and special elections and are accompanied by a paragraph or two of language explaining the purpose of the bond. Put into a consumer perspective, bonds are a school district’s way of obtaining upfront funds to address issues in the district, such as the purchase of textbooks, transportation, technology equipment, building new facilities or repairing existing ones.
“All bonds start out with a need assessment,” Kim Holland, Ardmore City Schools superintendent, said. “The goal is finding out what the district needs and what the people want that will benefit them.”
Bonds are, essentially, a line of credit authorized by voters and funded through property taxes. Depending on the bond issue, an increase in sales tax can be needed, but could also potentially remain the same. Generally, schools try to keep any talk of a potential tax increases limited.
“You don’t want to increase taxes,” Chad Broughton, Marietta Public Schools superintendent, said. “You don’t want that rate to roll off. You want to keep it consistent.”
When schools begin promoting bond issues the potential of a tax increase is usually addressed with promotions clearly identifying bonds as “a no-tax increase bond issue.”
A no-tax increase bond comes to fruition when existing property tax millage is sufficient in paying off the bonds, which typically happens when schools have kept up regular bond activity and acted as bonds mature. When voters approve a bond issue, they approve paying off the debt once the bonds mature through property tax revenue. The amount of property tax collected is determined through millage, which in Oklahoma one mill is one-thousandth of a dollar. If the district’s millage is high enough, typically a tax increased isn’t needed.
Depending on the size of the school, the millage needed to maintain a strong infrastructure can vary. Once the sweet spot is found, schools can, essentially, “refinance” bonds and extend the length of the payment, which then allows the millage to remain the same and provide the school funds to address areas of need. If a school, however, goes too long without passing a bond issue the millage seeks, leaving the district potentially looking for ways to fund building projects and other areas of need.
Broughton said bond issues require the community to buy into the proposition.
“I think if you address a need, the community will support it,” Broughton said. “We do our best to address things where we can make things better for the students.
“Community support and them seeing the things that benefit the children is critical.”
Marietta has seen a string of bond issues come to fruition, with the latest being overwhelming passed in March with 90 percent of voters approving the measure. In Oklahoma, a 60 percent super majority is required for measures to pass. The bond makes the eighth or ninth consecutive bond passed for the district, which has spanned roughly 20 years for the school. The steady amount of bond issues has kept property tax levels relatively consistent, according to Broughton.
At times, however, bond issues do require an increase in millage. Ardmore City Schools, for example, has begun the process of evaluating the millage needed to pursue several improvements across the district, including an updated bus fleet, improvements to buildings and the creation of a performing arts center. Currently, ACS millage rate sits at roughly 18 mills, according to documents provided to The Ardmoreite. The district’s millage is in the “middle of the pack” among area schools and is on the lower end of the spectrum in comparison to schools of similar size. The district is hoping to pursue its next bond issue in the wake of the $31 million bond issue passed in 2013 that addressed several areas of need for the district.
Before that bond, ACS hadn’t successfully passed a bond in years, leading to the millage to dip.
According to preliminary projections provided to The Ardmoreite, the district would pursue a $48 million building bond (a 15-year bond) and a $2.5 million transportation bond to address the district’s aging fleet, which would provide $1 million for new buses in 2018 and $300,000 for buses each year until 2023. The district is targeting a millage increase to 25 mills.
Bonds, typically, address areas of need in the district, but Holland said districts also listen to the community and determine what patrons feel is the best move for the children of the district.
“It’s needs and also interests,” Holland said. “We talked to hundreds of people about the performing arts center and sought out community input on it.”
ACS is looking to pursue the bond beginning this fall.