Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Home RSS
 
 
 

How no property tax boost is seen in STC bond issue

February 7, 2020
By John Speer - Editor (jspeer@tamatoledonews.com) , Toledo Chronicle, Tama News-Herald

"It's a little bit circular, but at the end of the day, it's logical," Travis Squiers told the 85 persons on hand at the South Tama Middle School cafeteria in Toledo Tuesday night. They were there for an explanation of the proposed South Tama Schools $28.7 million school improvements including a $20.8 million bond issue.

The meeting was part of a special session of the school board with the public invited to gain an understanding of the view contending approval of the $20.8 million bond issue will not result in a property tax hike.

The bonds would pay for a middle school addition to the high school in Tama to replace the present school building in Toledo.

Article Photos

outh Tama County School Superintendent Jared Smith points out areas where he said he hears the most concern over the foreseen zero raise in the property tax levy for the funds to pay for a $20.8 million bond for a new middle school. The project total is $28.7 million. Financial advisor Travis Squiers (right) presented a detailed analysis of the bond issue and related measures to be decided in the March 3 vote during a meeting at the middle school cafeteria in Toledo on Tuesday night, Feb. 4.

News-Herald photos/John Speer

Squiers is the managing director of public finance investment banking for Piper-Sandler, Des Moines, a stock, investment and financial advisory firm.

What they heard was an hour and 40 minutes of how school financing works and how it applies to the South Tama schools.

On March 3, South Tama patrons will go to the polls to decide three issues- the bond issue and questions of raising the property tax levy from the current $2.07 to $4.05 per $1,000 valuation and to extend the use of sales tax money beyond a now set Jan. 1, 2031 expiration date. The bond issue and tax levy votes require a 60 percent approval and the sales tax extension 50 percent.

STC Superintendent Jared Smith emphasized the number one question he has received about the coming March 3 bond issue vote has been "how is there no property tax increase" if the bond issue is successful.

Squiers explanation is "the district intends to use sales tax revenue to reduce the debt service levy to fit within the current overall levy rate of $15.35 per $1,000 valuation."

School districts in Iowa receive a state penny sales tax (SAVE) for school infrastructure. The Iowa Association of School Boards projects South Tama will receive $1,632,518 from the SAVE funding. Since 2009 the district has been the recipient of a total close to $3 million in this funding.

Squiers said based upon his firm's projections for the next five years the SAVE amounts will provide adequate financing along with the current property tax receipts to maintain the current property tax levy amount and could result in slight reductions. Information provided Monday night states "The district does not anticipate needing to increase the overall property tax rate."

"The district is in a very solid position financially," Squiers said, crediting STC Business Manager Mary Boege for this position. Squiers' information also pointed to "cash on hand" as an enabling factor.

Squiers made the case for a 20-year bond repayment time period citing an estimated $4 million in additional interest if the bonds are sold for a 30-year period.

In discussion at the end of the board meeting, board members said passage of the bond issue was "the first step" in an additional proposal to build a performance auditorium as part of the middle school addition.

Board members said a group is considering fund raising efforts to aid in this project if it were included.

 
 
 

 

I am looking for:
in:
News, Blogs & Events Web