KSD seeking multi-million dollar bond

KELLOGG — The Kellogg School District school board announced their intention on Tuesday to pursue a $7.9 million special general obligation bond in the upcoming May election.

The proposed 12-year bond was decided upon during a special workshop meeting earlier this week.

The funds from this bond are to be designated for additions and repairs to the Kellogg School District’s facilities.

Although unspecified at this time, the district has around $10 million in repairs and upgrades (according to a 2013 facility study) that are needed just to get the buildings to current standards.

Recently, KSD formed a facilities planning committee, which took guided tours through all of the district’s buildings to learn how many of them were operating, where their strengths and weaknesses were, and what each facility’s needs were.

After all of the tours were finished, the committee was able to hear from representatives from Piper Jaffray, the investment bank and asset management firm handling the bond.

The options were presented to committee for comment, but the ultimate decision would have to come from the school board.

Much of the deliberation was over the length of the bond, which essentially left the board with two options: A $7.9 million bond paid back over 10 years or over 12 years.

Paying back the 10-year option would be quicker and would come with less interest, but locals would be paying $89 (per $100,000 of taxable property) annually with a net total of $8,137,270.

The 12-year option stretches the timetable for paying back the bond by lowering the yearly amount paid from that $89 figure down to $53 annually, but comes with $431,000 in extra interest and a net total of $8,520,860.

Making their decision wasn’t easy as the board weighed both options and looked at much of their constituency’s current financial standings.

Their main sticking point was trying to lessen the burden for those residents on fixed incomes.

“It’s difficult when you have this much land that is not taxable in your district, as it puts the burden on those who have property that is taxable,” board chairwoman Bonnie Farmin said. “But I see both sides of this. I think people will be much happier to see lower tax amounts and won’t pay much attention to that extra interest.”

After much deliberation, Farmin read aloud the district’s intentions.

“Pursuant to the laws of the State of Idaho and the Bond Election Resolution of the Board of Trustees of Joint School District No. 391, Shoshone and Kootenai Counties, State of Idaho (the “District”), adopted on March 19, 2019, notice is hereby given that a Special General Obligation Bond Election will be held in the District on Tuesday, May 21, 2019, beginning at the hour of 8:00 A.M. and closing at the hour of 8:00 P.M. on said date, on the question whether the District shall be empowered to issue general obligation school bonds of said District in the principal amount not to exceed $7,900,000, to be repaid not later than twelve (12) years from the date of issuance thereof.”

The decision and deliberation seemed to echo that of the facilities planning committee as well.

“Personally, I would go for the 10-year, $7.9 million because it’s the most responsible value of the two with over $400,000 less interest in the end,” Michele Rauenhorst said. “But I worry that the public might respond better to the lower advertised values for the 12-year choice.”

The proposed bond will need two-thirds approval to pass.

Last year, the KSD was set to attempt to pass a facilities maintenance levy, but backed out of it just a few weeks before election day after receiving SRS Funds via the Congressional OMNIBUS Spending Bill.

This is also different from the district’s supplemental levy, which is voted on every two years and accounts for a large portion of the district’s yearly budgets.

Bonds and levies are two different ways for a municipality to raise revenue. A bond is debt, offered to the public, which must eventually be repaid with interest.

By contrast, a levy is a tax that towns and counties impose on local property owners in order to raise money for services.