KISD bond steering committee

Matthew Boles of RBC Capital, explains KISD's bonding capacity during the bond steering committee meeting Thursday, Nov. 9, 2017, at East Ward Elementary School.

On Nov. 2, Superintendent John Craft of the Killeen Independent School District, told the bond steering committee, “Think about a bond like a mortgage.”

Craft continued his definition of a bond as an investor loaning money to the school district with interest.

Like a mortgage, the money investors lend to the district when they purchase the bonds must be paid back over a period of years, Craft said.

The district’s 2002 bond issue of $98.72 million had a term of 26 years and is being paid back as the district seeks another bond.

Property owners in the district contribute to the 2002 bond repayment through their taxes.

According to a definition from the Texas Education Agency, “A district’s property tax rate consists of a maintenance and operations (M&O) tax rate and, if applicable, an interest and sinking (I&S) tax rate. The M&O tax rate provides funds for maintenance and operations. The I&S tax rate provides funds for payments on the debt that finances a district’s facilities.”

KISD’s tax rate for fiscal year 2018 is $1.11 per $100 of property value. Of that rate, $1.04 is for maintenance and operations and $0.07 is for interest and sinking.

That interest and sinking tax rate will be impacted by the proposed bond issue currently being discussed by the district and the KISD bond steering committee.

Since 2000, both the maintenance and operations and interest and sinking tax rates have fluctuated for those living in the Killeen school district.

The maintenance and operations tax rate rose from $1.384 per $100 valuation in 2000 to a high of $1.425 in 2003. Since that time, it has gradually decreased to its present rate of $1.04.

The interest and sinking tax rate jumped from $0.044 in 2000 to $0.1383 in 2003 after the last bond election. The interest and sinking tax rate began to decrease in 2006, and currently stands at $0.07.

According to Craft, without an additional bond issue in 2018, the interest and sinking rate would further decrease in 2018 to $0.04.

The amount collected by the district from these taxes has continued to increase since 2000.

The Bell County tax collector calculated the “levy” or amount collected for KISD in 2000 as over $35.5 million. In 2003, KISD received over $48.4 million in property tax revenue.

The amount continued to rise, even as the tax rate decreased in subsequent years. That was because an increasing number of homes built were in the district. From nearly $69 million in 2010, the property tax revenue collected for the district rose to over $84.3 million in 2017.

The district’s budget for 2018 calls for $77 million in local money. The total budget is more than $382.88 million and includes $51.1 million from federal sources and $254 million from state funding.

Of the federal funding, $47.6 million is in Impact Aid, money given to school districts in which property is taken off tax rolls due to federal activity, such as Fort Hood.

The district spent $8,663.82 per student from the maintenance and operation budget in the 2017-18 year, according to figures presented at the steering committee meeting Thursday.

The question faced by the KISD bond steering committee at the meeting Thursday revolved around possible amounts for the proposed bond issue, the interest rate and the length of time before the bonds would be repaid in full.

The district is hoping everything will fall into place in time for the board to meet a Feb. 16 deadline to call for a bond election for May 5, 2018.

The amount of that bond could be as high as $500 million, if all projects under consideration by the district and the bond steering committee would be included.

Three new elementary schools, a middle school and a high school are listed on KISD’s Strategic Facility Plan, and could be included in the bond issue. Removed from the list was a stadium, estimated to cost $50 million. The stadium is no longer under consideration, per Craft’s statement during Thursday’s bond steering committee meeting that the focus of the bond issue will be on instructional spaces.

Renovations to 12 older school buildings in the district are under consideration for the bond issue. Among those renovations would be replacing 239 aging, inefficient heating and air conditioning units.

Purchasing new school buses, or retrofitting older buses with seat belts had been mentioned by Craft as another potential inclusion for the bond issue, but will not be under consideration at this time, Craft said Thursday.

At Thursday’s bond steering committee meeting, Matthew Boles and Derek Honea of RBC Capital, Dallas, highlighted three scenarios for the bond issue, and how each would affect taxpayers.

Scenario 1 listed the bond as $175 million. That amount would raise the interest and sinking tax rate from its current $0.07 to $0.105. The owner of a home valued at $150,000, minus the homestead exemption, would see a yearly increase in the property taxes of approximately $44.

Scenario 2, as proposed by RBC Capital, has the bond amount at $350 million. The interest and sinking tax rate would jump from $0.07 to $0.17 percent, meaning property taxes would rise approximately $127 per year on a home valued at $150,000, minus the homestead exemption.

Scenario 3 would be a $500 million bond issue. A yearly property tax increase of approximately $209 would be seen by owners of a $150,000 home, minus the homestead exemption. That translates into an increase in the interest and sinking tax rate from its current $0.07 to $0.24.

The proposed bond would have a 30-year amortization, or length. Boles said it could be refinanced — or “refunded” — if interest rates dropped, to save the district additional money.

The next bond steering committee meeting will be at 6 p.m. Thursday at the KISD Career Center, 1320 Stagecoach Road.

254-501-7568 | jferraro@kdhnews.com

(10) comments

eyewatchingu

Once again the city send their plants in to tell lie on a chat forum in hopes to make the citizens of Killen look stupid.

Not Happening, we are wiser now and we our the ones paying taxes and will not allow you or any one to take our money any more.

VOTE NO ON THIS BOND. STAND UP BE HEARD.
When you vote no on this bond,
your voting to say we have had enough
You are voting no to gangs in schools
Your voting no to the waste of hard earn money that you worked for
You are voting no to million dollar score boards and a waste of tax payer dollars.

VOTE NO SEND THE MESSAGE LOUD AND CLEAR!!!
No more pretend land

SnowWhiteNthe7Thieves

YOUR KISD propagandist admits to this: "tax rate would jump from $0.07 to $0.17".
................................................................................................
That amounts to 243% tax increase.
................................................................................................
The way the propagandist tells it is deceitful.
....................................................................................................
The propagandist speaks about percentages, while I translate that to dollars.
....................................................................................................
By the time the graft, corruption, and payoffs occur, very little of that money (if any of that money) will benefit your 1st grader today, much less your 10th grader.
=================================================
As with most things in this country today, you're being asked to sponsor ne'er do wells and beggars with your earnings meant to feed your kids and pay your mortgage.

THUGNIFICENT KILLED ME

@Alvin, spot on, sir. Yes, taxes have nothing to do with mortgages. If one obtains a mortgage, one chooses to do so, not forced to do so by some UNELECTED government bureaucrat. Taxes are scams, not investments. Again, if I invest my money in something I CHOOSE to do so, and I expect a return on that investment, or I take my money back. Taxes, no matter what mask they wear, or how much lipstick some unelected bureaucrat puts on the ugly PIG of taxes, its just another money grab, as in scam or con. Say NO to taxes, say YES to you choosing to support something. Let the UNELECTED bureaucrat sell shares in KISD to get those who wish to do so to invest in pie in the sky, greedy paws in your pockets tax scams.

THUGNIFICENT KILLED ME

I don't often vote on bond issues, but when I do vote on bond issues, I always vote NO. We no longer have children of school age, but when we did, our kids attended private schools we paid for out of our money. I'm sure there are many of you who no longer have school age children forced to attend the KISD indoctrination camps. I don't tell anyone what he or she should do.

I'm voting NO to scams, cons, and thefts. I'll keep my money thank you, because Texas state sales taxes, license plate fees, and federal government scams are already robbing me blind. This country sure isn't what it once was, and day by day its becoming unrecognizable.

Alvin

This is the personal comment of this writer.

@ Heights Teacher: Isn't that called 'Job Protection'???? Of course you will back every bond issue, that's called 'Payroll Protection' to be for everything that the Board of Education wants.

Your statement on 'Renters with your plea for again, job protection, I really think it falls on deaf ears. What choice does an individual have, you either own your own home or you rent and the land lord pays the tax because he owns the home. It's a case of 'pay me now or pay me later, but there's a catch:

Copy: 'On Nov. 2, Superintendent John Craft of the Killeen Independent School District, told the bond steering committee, “Think about a bond like a mortgage.”
Craft continued his definition of a bond as an investor loaning money to the school district with interest.' End of copy.

Why do I want to support an organization that seeks refinancing at at higher rate that it just doesn't pay off it's financiers first, but just keeps adding to the enormous debt????

Copy: '@Heights Teacher: I look forward to passage of this pond proposal and the building of new schools in this overcrowded district. And again ten years from now. And again ten years later. And renters, I know that you pay your share of taxes through your monthly rent payments. Your landlords pay the school taxes directly, probably charging you more than what they actually pay themselves.' End of copy.

I will pose a question to you: 'Why does this District wait until they are in a bind and cause overcrowding of schools, and force the closure of schools that they will have to close and sell off, at an enormous loss just to build new schools, at elevated costs????' Your statements about building new schools, overcrowded schools in districts, and renters having to pay their school tax through their landlords, would cause me if I was not already against the raising of money through a tax structure that, in essence, says 'buy high and sell low'. It's not their money that they so flippantly want to spend, it's ours. Each and every time they sell short and increase the indebtedness, we fall further and further behind the proverbial '8' ball.

Well no more of their casualness in 'taking care of of business'. As I have said, ' it's easy to say, 'but it's just a little bit'. I keep thinking about the $1 million dollar score board, as an example. For people who have money, it's just a little bit, for those of us who don't have any money to spare, it can be quite a lot.

This has been the personal opinion of this writer and nothing shall be used, in context or without or changed in any way without first notifying, and receiving explicit approval from this writer.

SnowWhiteNthe7Thieves

Say no to rape, illegal drugs, child abuse, domestic violence, murder, and NEW taxes. I'm glad I don't live in places where the gubmint is greedy & steals your money. Texas used to be great, and the USA was greater. On second thought, the US GUBMINT steals my money, too.

Heights Teacher

(bond proposal)

Heights Teacher

I look forward to passage of this pond proposal and the building of new schools in this overcrowded district. And again ten years from now. And again ten years later. And renters, I know that you pay your share of taxes through your monthly rent payments. Your landlords pay the school taxes directly, probably charging you more than what they actually pay themselves.

Alvin

This is the personal opinion of this writer.

Copy: 'On Nov. 2, Superintendent John Craft of the Killeen Independent School District, told the bond steering committee, “Think about a bond like a mortgage.”
Craft continued his definition of a bond as an investor loaning money to the school district with interest.' End of copy.

Why do I want to support an organization that seeks refinancing at at higher rate that it just doesn't pay off it's financiers first, but just keeps adding to the enormous debt????

It sounds to me that that this is an never ending debt cycle that will continue to grow ever larger.

First, it goes along with the old axiom, 'it takes money to make money'. It's easy for somebody that is well off to ask people, 'for a little bit more'. There ain't any more for people who live on social security, that hasn't increased in 2 or is it it 3 years now. The well has run dry.

But it's easy to say, 'but it's just a little bit'. I keep thinking about the $1 million dollar score board, as an example. For people who have money, it's just a little bit, for those of us who don't have any money to spare, it can be quite a lot.

It all fine and good, and it is a lot like the city administrative group, that throws a lot of numbers and doesn't say squat about just what the money is going to be used for. I think that they call it 'transparency', to hide a bunch of numbers in a smoke screen and then make statements like, 'but we told you where the money went'.

Mo I think I will go with eyewatchingu: on this one. Where is the money going to be spent, for a quality education for the children or for a $1 million dollar football scoreboard that sounds good to a board member.

This has been the personal opinion of this writer and nothing shall be used, in context or without or changed in any way without first notifying, and receiving explicit approval from this writer.
One of the 4.58 % who voted.

eyewatchingu

I as a home owner, tax payer and rate payer will not vote for this. Gas prices are starting to go along with other taxes. This year will be first year I will get a chance to get a tax beak come April, no way in hell am I going to give up what little tax break I get to pay for this.
Most of the kids come from rental properties in our community, it is time we look at the renters to paying their far share of the tax burden in this town.
We keep building low income housing and it is we the middle class home owners that suffer for it. House being built that end up as rental properties and I am the one faced with paying the taxes.

VOTE NO ON THIS BOND, this bond will not help the true citizens of Killeen, the home owners.
Vote no and demand a taxing of Renters. It is not my burden or any other home owners burden to pay for over priced Beverly hill dreams.

They think they are going to rape us middle class home owners and get away with it.

Vote no, send a message that we will no longer pay for over priced pie in the sky dreams, wasteful spending and hiring of people that are not licensed and over paying them.
VOTE NO ON THIS BOND SEND THE MESSAGE!


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