- After reading the letter to the editor (R-C Sept. 24) regarding the 2008 continuation bond in which the writer calls on the voters to reject the proposed bond, a response to inform voters on this issue seems appropriate and necessary.
An overview of the proposed continuation bond for 2008":
- The revenue generated from the 10 cents per $100 of assessed value of each residence is used for capital improvements for 13 aging schools, where the cost of individual improvements is over $100,000. The current list of improvements are not n maintenance, nor are the funds used for operating expenses
- The State of Nevada does not provide funding for capital improvements. Donations, bonds, taxes, and the residential building tax fund capital improvement expenditures for our schools.
The life of the bonds will closely match up with the life of the assets financed (at least in terms of the maximum maturity). It is the goal of the district to not issue bonds exceeding 20 years.
- Even though we (the voters) must approve a bond question there is pay-as-you-go potential. For example, as the residential building tax increases, so does funding for capital improvements, decreasing the need for issuing bonds which allows the revenues which would have been used to repay bonds to pay for capital projects instead.
n The need for capital improvements to our schools in the future will never cease. This continued funding through the 10 cent property tax is the simplest solution.
The Keep Improving Douglas Schools committee agrees with Pat Samedi who suggested in his letter to the editor that there should be a better way to fund school investments. We invite him to join our committee and help us find a way. There are many constraints which we hope he and others will consider when heading to the polls Nov. 4.
Last fall, a group of citizens formed a committee on the advice of the Douglas County School Board to evaluate the growing list of county schools capital improvement needs. The KIDS Committee was formed and given their marching orders. Those orders from the school board were to visit each school, discuss the needed improvments with each principal, evaluate each need and determine if that need met the criteria for a capital improvement or not. The needs were categorized into four major categories and prioritized in the following manner. Those categories are 1) health and safety, 2) replacement of critical needs, 3) operation savings and/or efficiency, and 4) academic excellence.
Other needs which do not fall under these four categories were also identified such as replacement of the press box at the high school and replacement of the concrete at the front of the high school.
This fifth category has the lowest priority and as such will most likely be the last to be tended to, but are identified as needs for the school districts capital improvement plans with estimates to meet the needs accounted for in the proposed $40 million request.
These needs are for 13 schools, with an average age of 36 years. These needs may be for an individual school or for multiple schools where the aggregate for the particular need exceeds $100,000.
Improvements under this amount are considered routine maintenance or an operating expense and that funding comes from the schools general fund " funds generated from the issuance of the bonds cannot by law be used for needs which do not meet the criteria for capital improvements. In February of this year, the KIDS Committee brought the recommendations for needed capital improvements along with estimates to take care of those needs to the school board. The school board unanimously approved these recommendations.
The State of Nevada does not provide funding for capital improvements for school facilities. Each municipality must rely on local sources. In Douglas County, the funding for building of schools or improvements to our schools comes primarily from the community through the residential building tax, donations, bonds or taxes. There are no other mechanisms within the state to fund capital improvements for our schools.
The majority of the funding comes from a small portion of the property tax we as homeowners pay. Currently, the rate is 10 cents per $100 of assessed value. This 10 cents is currently used to repay the bonds the county used to fund capital improvements over the last 16 years, totaling over $29 million.
The proposed bond will fund the current proposed needs for the next 10 years. Remember also, that construction costs (labor and material) have risen 60 percent over the last 16 years. The bond tenets and the county debt commission will not allow the district to issue any more bonds than it can repay with the proceeds from the tax. The bond is expected to raise an estimated $40-50 million over the next 10 years. Interest on the bonds will only be paid if there is an outstanding balance.
If we don't spend the money there is no interest, or if we spend, then pay down, the interest is minimized. Any property tax revenues not needed for debt service can be used on a pay-as-you-go basis for capital projects. If the bond measure is approved, the average resident would see the same $80 per year of their property taxes that currently goes towards retiring the previous capital improvement bonds continue going to our schools for the same reason. Pretty small amount of continued investment in our future, if you ask me.
A few things to remember when it comes to Nevada's tax structure.
Nevada has no personal state income tax, no unitary tax, no corporate income tax, no inventory tax, no estate and/or gift tax, no franchise tax, no inheritance tax, and no special intangible tax.
We do have property taxes.
The ad valorem or property tax is levied upon all property, real, personal or possessory within the boundaries of a given political entity. The total tax rate that a given property will pay will be a combination of all the overlapping political entities to which it belongs.
Thus, for example, a property located in Minden will pay taxes to the Town of Minden, the East Fork Fire & Paramedic Districts, the Douglas Mosquito Abatement district, the Minden-Gardnerville Sanitation District, the Douglas Paramedic Ambulance district, the East Fork Swimming Pool District, the Douglas Water District, the Douglas County General Fund, the Douglas County School District, the State of Nevada, and various other debt levies.
The sum of all these rates will be the rate levied upon a specific property. There is a constitutional limitation on the maximum property tax rate of $5 per $100 of assessed value and a statutory limitation of $3.64 per $100 of assessed value. Assessed value is calculated at 35 percent of taxable value. The taxable value is the market value of land plus replacement cost for any improvements depreciated at 1.5 percent per year.
1. Information above on Douglas County's property tax structure was taken from a publication put out by the University of Nevada Economic Development Center, titled "Fiscal Impact Model for Douglas County, Nevada," dated February 1995.
For fiscal year 2007-08, the following are the tax rates for four counties in Nevada:
In Washoe County, the average countywide tax rate is 3.5607. In Lyon County, the rate is 3.0320. In Clark County, the rate is 3.1141. In Douglas County, the rate is 2.9831.
In comparison, Douglas County residents pay the least of the above mentioned counties. The 10 cents (3.35 percent of that $2.9831) currently levied will not increase, rather it will remain the same if the bond is approved by voters. The $2.9831 per $100 will likely remain the same if the bond measure does not pass, as another county entity could use the 10 cents, which does not always require approval by the voters, as is the case for the school district. Our debt serve tax rate is almost 1/6th that of Lyon and Clark Counties and 1/4th that of Washoe County, comparatively small, but manageable. We believe that the modest 10 cents available is most beneficial to our county by continuing improvements to our schools.
Douglas County citizens and the Douglas County School Board have been good stewards of these funds since 1992. Our schools deserve these vital improvements. Our kids deserve the best. Vote for passage of this bond, not rejection.
For more information about the KIDS Committee's work and the proposed bond, please visit our Web site at www.douglaskids.org.
n Gary Thurm is a member of The KIDS Committee.
