The Emporia Public Schools Board of Education heard positive updates regarding the financial aspects of the proposed Nov. 5 bond election during a regularly-scheduled meeting Wednesday evening.
Managing Director Dustin Avey of Piper Jaffray financial services approached board members with updated interest rate and valuation estimates, using the projections to determine the effect on the district’s overall mill levy and its eventual annual cost to taxpayers.
“As a result of going from a 4.05 interest rate projection to a 3.47 interest rate projection, that’s about $11 million less in interest-to-cost gain on the financing over the term of the bond,” Avey said. “So, that’s a pretty significant number in terms of what interest rates mean to a bond project … The current total district mill levy is 53.738 based on 2019-20. The increase as a result of the bond project is half a mill.
“When we called for the election originally, we had estimated that the mill levy would need to be 2.95 mills higher than the mill levy in 2018-19 to support a $78 million project. That was based on prior budget information. Based on current information and current interest rates, the mill levy required to support the bond project is only half a mill higher than what the 2019-2020 mill levy is.”
If the bond issue passes, the district is scheduling the $78 million to be paid over the next 28 years. The previous projected increase of 2.95 mills would have equated to a $2.83 per month — $33.96 per year — property tax increase for a $100,000 home within the district.
The new, smaller increase of .5 mills — which can be attributed in part to the addition of funds in the overall tax roll from the expiration of tax incentives at the Hills Pet Nutrition plant — comes to a payment of 48 cents per month. The bond would now add only $5.76 per year for the same $100,000 home in addition to what the resident is currently paying. Commercial property tax would amount to $12.50 per year for a $100,000 property, while agricultural property tax would amount to 1 cent annual cost per acre of grassland and 4 cents annual cost per acre of dry crop land.
Those curious about the calculations involved in the new projections can access a full report including interest rates, assessed valuations, state aid figures and the history of the district’s mill levy at go.boarddocs.com/ks/usd253/board.nsf/public under the Oct. 9 meeting, section 8A.
“If the bond passes, you will likely see me in about a month from now to review what the plan looks like to make sure we can lock in rates ...” Avey said. “If rates continue on the same trend and look similar to the ones we have today … we would like to be very proactive in that process and our hope would be to put the district in the position to — either before Thanksgiving or right after Thanksgiving — lock in rates. Obviously, when you’re talking about interest rates on a very large project, an $11 million difference in previous projections to where we are with current projections is a pretty significant impact to taxpayers.”
During the meeting the Board of Education also:
• Approved the disposal of 80 surplus technology items via internet auction
• Let bids for a replacement box truck for the district’s Food Service Department
• Approved updates to the Professional Development Council Handbook for 2019-2023.