Douglas County School District officials are trying to answer some tough questions about their proposed continuation bond, which, if approved by voters in November, would finance the district's capital improvement projects, those construction projects exceeding $100,000.
Voters have expressed dissatisfaction that the district has to issue a new bond in order to keep a 10-cent property tax rate in place. The debt service tax rate is guaranteed by having outstanding bond payments and currently funds capital improvement projects. When the district's existing bond retires in 2011, the tax rate will be lost unless another bond is issued.
The district is arguing that another county entity would likely grab the tax rate if lost, and property owners' tax bills would remain the same with or without approval of the bond.
But voters are wary of what seems to be a governmental system that rewards debt. However, Superintendent Carol Lark said past attempts to address the problem at the Legislative level failed.
"As far as a permanent solution goes, there have been some attempts to do something, but the Legislature has not been willing," she said.
Lark said in the late 1990s committees were formed to look at various options.
"One option we proposed was to have all of the available revenues on the books (room tax, sales tax, residential construction tax, real property transfer tax) that are currently authorized based on population to be available to all districts with voter approval. It went nowhere," Lark said. "The assumption about this proposal being a last resort is accurate. The chances of the Legislature taking on additional financial responsibility in these difficult economic times are very doubtful."
Voters have also raised questions about the amount of financing needed, approximately $43 million for everything from new roofs to complete overhauls of heating and air systems. The previous bond passed in 1992 equaled about $29 million and paid for three new schools: Pau-Wa-Lu Middle School, Minden and Pinon Hills elementary schools.
"The costs of materials, labor, fuel, etc., have skyrocketed since the last bond was passed 16 years ago," Lark said. "It is a volatile time in the construction industry, and it could cost up to $20 million to build one new elementary school."
Lark said the district has 11 schools with an average age of 36 years.
"There are safety and capital renewal needs " electrical systems, fire alarm panels and rewiring, as well as original roofs and HVAC systems that need replacement," Lark said.
Cheryl Blomstrom, chair of the Keep Improving Douglas Schools committee, said a continuation bond is better than a traditional bond with a fixed amount attached to it.
In a continuation bond, money is issued in increments depending on current and often changing needs. Any leftover revenue is rolled over into a savings account and used for future projects, in a pay-as-you-go fashion.
"It takes the existing tax rate for existing school projects and continues it for 10 years," she said, "but only if we can cover the debt with the 10-cent rate. We can never go over that."
Blomstrom said she understands voters' concerns about the district re-entering debt.
"We are a creature entirely beholden to what the state tells us we can or cannot do. This is our reality. We don't get to pick and choose how we are funded," she said. "Capital improvements of our school buildings need to happen. If the bond does not pass, our buildings will deteriorate, and our kids will not have a safe learning environment. This is about kids first."
Carole Vilardo, president of the Nevada Taxpayers Association, said the mechanisms of funding are not the issue.
"Take a look at what more permanent funding sources would be," Vilardo said. "Do voters prefer a 10-cent property tax rate that funds schools, or an increase in sales tax. There is no permanent source for facility needs because you don't always need to be building facilities or repairing them."
Vilardo said state law allows school districts to go before voters and ask for bonds when needed. The real issue, she said, is whether the district has made the case that their facilities are in need of funding.
"I truly appreciate the concerns of voters," she said. "If voters agree there is a need, they can approve the bond."
