ANSWERS TO QUESTIONS ABOUT FUSD'S BOND REVENUES
What are the primary purposes for the bond money?
The FUSD bond money will be dedicated to renovating and maintaining District schools, and upgrading technology and school buses with the goals of increasing safety, efficiency, and general support of District programs, services and school activities.
In addition to refurbishing and replacing schools that are 30 to 75 years old, the proposed renovations will increase energy efficiency and will help to generate general operating funds. The bond will also provide 21st century teaching and learning environments. General enhancements to technology and use of those instructional resources in grades K-12 will develop student skills necessary for success in today’s global market place and society in general.
Why a School Bond Election in November of 2018 rather than a Capital Override Election?
The bond program will provide FUSD the maximum flexibility in controlling tax rates and in having available funds for a variety of essential needs. The bond revenues will best fill the vacuum of the capital funds removed by the State in the past 10 years. The Building Renewal Fund has been underfunded in FUSD by $22 million during the last six years, and no funding provided for essential safety, deterioration, and inefficiency upgrades have been available from State sources. The State has also cut the soft funding sources in the past years. These funds, used for basic instructional materials – textbooks, technology, software–were completely eliminated in the 2011-12 school year and reduced by 85% in all subsequent years. FUSD received only 12% from the State of the necessary funding needed for textbooks and technology in school year 2017-2018. The District did not ask voters to renew Capital Outlay Override Funds for school year 2013-14; therefore, the amount of tax levy was reduced between 15 and 20 cents for the past years.
What will the passage of this Bond cost?
A $75 million bond is called for in the election, and with careful timing of bond sales there will be only a minor increase in the tax rate for the proposed Bond Election. Paying back the bonds will be scheduled to be amortized over a 15-20 year period. The District has managed this long term debt very carefully; as a result, the payment of principal and interest can be phased in with a minimal tax levy increase of 16 cents per $100 of assessed valuation – property appraised by the County at $100,000 will have a $16 per year increase in taxes. Responsible stewardship of all District finances has resulted in two major bond rating services giving FUSD an AA rating, which is a high rating for an AZ School District. These ratings will assist the District in securing a low interest rate for the issued bonds. It should be noted that the renovation of older buildings and the included energy efficiency provisions will result in some annual operating savings; therefore, these funds will assist the District in maintaining classroom and program standards.
What Bonding Capacity does the District have and what historically has the District levied for Bonded Indebtedness?
The District has a Statutory Debt Limitation of $230,507,000 and debt of $40,390,000, utilizing only 18 % of the limitation. The Constitutional Debt Limit is even larger, so the District utilizes only 12% of the Constitutional Limit. The history of tax rates to pay debt in the last 10 years ranges from a high of $.94 to a low of $.41. The last 5 year range is between $.41 and $.62. The projected tax rate for the next ten years will average approximately $.61.
Is there any benefit to homeowner values because of the proposed bond program?
Yes, most definitely. Surveys and research have shown that sound K-12 educational offerings, and school facilities and equipment that provide a safe, pleasant environment translate into higher property values in the neighborhoods that surround those schools. Fixing our schools is a sound investment and will pay dividends to home owners, businesses, and the entire community.
How do citizens know that FUSD will spend funds wisely and responsibly?
Flagstaff Unified School District has a proven record regarding responsible stewardship of bond funds. The $53.1 million 2006 bond revenues were well planned and utilized according to the commitments made to voters. The projects were completed on a timely basis, and overall bids were under estimated costs. A special report is made to the District’s Governing Board concerning the utilization of these funds, and, a Citizens’ Bond Oversight Committee meets monthly to review projects and costs, and oversees the entire bond program. The $20.97 million 2012 bond revenue was also well planned and utilized. Technology Infra-structure was possible with matching Federal funds, buses were upgraded and facilities kept in manageable, safe condition. Detailed reports showing the use of the 2006 Bond and the 2012 bond are on the FUSD web site.
Does the availability of these Bond funds have any effect on programs and services for students?
Yes. Without these funds, many of the capital concerns will have to be accomplished with general operating funds. This means a direct effect on money available to maintain reasonable class sizes, teacher salaries, and provide special programs such as:
- Physical Education
- Extra-Curricular Activities
- Magnet and Extensive Advanced Placement Electives
- Special Assistance (tutoring) that many students require at various times
- The energy efficiency projects will provide a direct offset to the general operating costs of the District. It is estimated that due to the efficiency systems or the energy generating systems, the District has saved substantial operating costs.
Why are Arizona school districts in the position of asking voters for so much local support?
Arizona has reduced capital funding to K-12 education by over $2.2 Billion in the last eight years, and ranks 48th in the nation in per pupil spending. Although a small gain has been made to restore some of the reductions, the backlog of needs is so extensive it will require several years of increased dollars to schools. Also, there is no guarantee that future legislatures or Governors will continue restoration of funds. Following is the summary of reduced funding:
- No Building Renewal last eleven (11) years.
- Excess Utilities Provision totally removed for last ten (10) years.
- Full Day Kindergarten funding eliminated last eight (8) years.
- Soft capital substantially reduced for larger districts starting in FY 2012.
- Regular capital funding reduced annually 85% in last 5 years
- Removal of fallback enrollment for Districts with declining enrollment
- Allowances for operating increases limited to last four years.
How does FUSD ensure that Bond funds are used responsibly?
The Bond Oversight Committee is made up of local Flagstaff-area residents, members of the FUSD Governing Board, and District staff. Each member lends their expertise to the decision making process. The committee meets to approve and review the funding and progress of various projects, and consider additional District needs.