MT. VERNON – The issuance of bonds to pay for the new Mt. Vernon Township High School should not cause any further tax rate increases for local residents, said the school district's financial adviser Tim King.
Last summer, many Mt. Vernon homeowners saw their tax rate jump over 10 percent from $8.15 to $9.12. About half of that increase was due to the first bond issue for the new building project.
King, who represents King's Financial, said it's unlikely taxpayers will experience that sort of “sticker shock” again. King gave a presentation on the district's bond repayment plan at Monday's MVTHS Finance Committee meeting.
“That should be the last time there will be any increase in the rate from the building project,” King said. “The payments are going to stay the same.”
The one-year bond issue raised property taxes at 49 cents per $100 equalized assessed valuation last year, meaning the owner of a $100,000 home paid about $134 more in taxes. Voters approved a referendum to build the new school in 2011, allowing the district to issue up to $19.8 million in bonds.
If the EAV declines, the tax rate could rise again, but the building project will not cause any further increases, King said. The district has chosen a “level repayment plan” for paying back the bonds, which should keep the tax rate stable, King said.
“Certainly, a level repayment is the most conservative and puts the taxpayers at the least risk of any payment increases,” King said.
Mike Beard, a spokesperson for the Past President's Council of the Jefferson County Chamber of Commerce, attended Monday's meeting and asked some pointed questions about the bond repayment.
At the time of the referendum, Beard understood that the district would sell $19.8 million in bonds and have to pay back roughly $33.7 million. Now, it appears the district will only have to pay back $33.2 million even if an additional $4 million in premium bonds are issued. This has put Beard's mind at ease about that aspect of the project, he said.
“I don't think we have any right to complain,” Beard said. “It is what they said it would be. There's no slight of hand here.”
The financial picture for paying back the bonds is decidedly better now with lower interest rates.
“As far as the actual bond sale itself, the amount being collected to make the bond payments (is) actually less than what was talked about in the referendum,” said Superintendent Michael Smith. “And it just so happened that we were able to capitalize on the rate that was so low, based on the economy, that in effect it's saving the taxpayers millions of dollars over what was originally talked about.”
Given the complex nature of bonds and the public's concern over tax increases, Beard urged district officials to hold a public forum on this topic.
“We feel it's emphatically important they hold a public meeting,” Beard said. “No one comes to the committee meetings because they feel intimidated. … We want a public forum where (Mr. King) can give the same presentation.”