Lake Washington School District revises its bond
Lake Washington School District will try again to pass a school construction bond that failed in February, but supporters and opponents disagree on how to interpret the cost figures.
Seattle Times education reporter
In February, voters turned down the Lake Washington School District’s $755 million school-construction bond to make room for growing enrollment.
The final count was close enough — 58 percent in favor, just shy of the necessary 60 percent — for the district to try again on the April 22 ballot, this time for a $404 million bond to cover only the highest priorities.
In Snohomish County, the Everett and Lakewood school districts also are trying again to pass bonds for school construction that failed in February.
Facing an expected enrollment growth over the next eight years of 4,000 students, Lake Washington still wants to build three new elementary schools and a new middle school. The district also wants to replace and expand Juanita High School and build a smaller high school on the same campus that would focus on science, technology, engineering and math.
But its scaled-back request eliminates a new high school with an international focus and improvements to several schools.
Supporters and opponents disagree about how much the bond would actually cost.
The district says the bond measure would cost the owners of a $500,000 home $125 a year more than what they’re paying now for previous, voter-approved school-construction measures. That paints the figure in the most favorable light because the difference between the old debt and the new debt would be the smallest next year.
Opponents say the real cost would rise to $385 for that same home in 2021, which casts the number in the least-favorable light by emphasizing the year when the rate — which determines the cost and bounces around from year to year for a variety of reasons — hits its high mark.
Both sides are working from the same district data, and neither figure is wrong per se. They’re just measuring different things.
To avoid comparing apples and oranges, look at it this way:
Zoom forward 15 years, to 2029 — the last year taxpayers are on the hook for existing debt — to get a snapshot of the tax bill.
If voters say no to the new measure this month, then the total tax bill on existing debt would be $330 for a $500,000 home, and 2029 would be the last year of any taxes on school construction.
If voters say yes to the new bond, then the total tax bill for school construction in 2029 would be double that amount — $660 — and the new bonds wouldn’t be paid off until 2037.
Beyond that, how do the district and the bond-measure opponents get their numbers?
Here it gets a little complicated. Costs are calculated as a rate per $1,000 of the assessed valuation of a property.
Property owners this year are paying a rate of $1.31 for existing school construction debt, which works out to $655 for the owner of a $500,000 home.
If voters approve the new bond, that rate would go up next year to $1.56, which would be $780 for the same home — an increase of $125.
The new bonds — which vary in duration up to 20 years — wouldn’t be sold all at once, so the payback period would be 22 years. During that time, debt from the old bonds would come off the books while debt from the new bonds would be added. The rate on the total debt would never go higher than $1.56 and eventually it would shrink to zero.
Opponents are looking at the rates each year of the new bond by itself, which would start out next year at 27 cents, but climb as high as 77 cents in 2021, when it would cost the owner of a $500,000 house $385.
All those figures depend on these district assumptions:
• Property values will rise and new homes will be added to the rolls (the district assumes an annual 3-percent increase in assessed valuation). Such increases generally lower the rate of a bond by spreading the debt across a wider base.
• No new debt for school construction would be layered on.
• New bonds would be sold in increments between 2014 and 2017 at interest rates ranging from 5.2 percent to 5.5 percent.
John Higgins: 206-464-3145 or firstname.lastname@example.org
On Twitter @jhigginsST