The Killeen Independent School District’s debt service tax rate could rise between 9 and 10 cents as a result of a proposed 2020 bond issue, bond steering committee members were told during a meeting Tuesday at Peebles Elementary School.
A few members of the bond steering committee raised questions as the potential tax rate for the possible 2020 bond was presented by RBC Capital Markets’ managing director, Derek Honea.
The first scenario would give the district $25 million of bond funding and would raise the debt service tax rate less than 1 cent. The final scenario gives the district $275 million of bond funding and would raise the debt service tax around 10 cents and put the district’s property tax rate at just under $1.26 per $100 valuation.
The current debt service tax rate is around 19 cents and would raise to just under 29 cents with the $275 million estimation.
The other nine bond scenarios presented by the district increase the bond value in $25 million increments from scenario two through scenario 10.
That tax value would be for a 30-year note, according to the presentation.
The 2020 bond process has been ongoing since October when the idea of a new bond was brought up by Craft at a board meeting.
The meeting Tuesday was the third in a series of committee meetings held by the district to discuss putting the bond on the May 2020 election ballot. KISD administration and the board of trustees hand-picked the bond steering committee. KISD Superintendent John Craft has said the district needs the input of the committee to decide whether or not to ask for a bond and how much the bond should be. However, Scot Arey, a member of the committee has said that it doesn’t feel like the district is asking whether or not to have a bond but only how much is it going to cost.
Philemon Brown, another committee member, has said that he does not think the committee has been given enough time to discuss the bond and projects that could be included.
The timing of this bond comes as the district is still spending money from two bond proposals approved in May 2018 that totaled $426 million of taxpayer money. Those bonds are on 25-year notes, and the taxpayers will be making payments on them for more than 20 years.
If the new bond proposal is approved by voters, construction on new bond projects would begin after all of the projects from the 2018 bond are complete, which would be around 2022/2023.
Other business at the Tuesday meeting included continuing to prioritize projects for a bond and building a consensus within the bond steering committee for what projects would be on the new bond.
The district presented the results from the priorities exercise at the end of the second bond steering committee meeting. Committee members on Nov. 17 used green dots to mark the proposed bond projects they favored. All of the new schools, the three new elementary schools, the new middle school and the rebuilding of Harker Heights and Peebles elementary schools all received at least 86% approval from the bond steering committee.
The three new elementary schools and the new middle school received over 90% approval from the committee.
If all of the instructional projects with at least 86% approval are included in the bond, that cost would total $283 million, according to estimates given by the district.
Decisions on the bond will be made by the bond steering committee either after the next meeting on Dec.17 or after an additional meeting in early January, according to the district. The dot activities are a way for the district to see what projects are the highest priority.
If a recommendation is presented by the bond steering committee, the board would have to approve it by February for it to make it onto the May 2020 ballot.
The stadium improvements at Ellison, Shoemaker and Harker Heights high schools would cost an extra $60 million, bringing the total to $343 million. However the $60 million for stadium improvements would be considered as a separate ballot item from the instructional projects.
The timeline for the potential projects was presented and the three new elementary schools would be open for the 2023/2024 school year and the new middle school along with a new Peebles and Harker Heights elementary school to open at the beginning of 2024/2025 school year.
Committee members questioned the rush to do the bond now and Craft said that the costs would increase from construction escalation and more portables could be brought online because the new elementary schools would not open in 2023 and would be pushed back at least a year.
Craft also talked about other funding. He said Impact Aid could decline if the school population drops below 35% federally connected students. Currently the district receives around $46 million to $47 million from Impact Aid each year. If the district drops below 35%, by 2025, the district would begin receiving around $16.7 million from Impact Aid per year going forward. That means the district would need to make up around $30 million in maintenance and operations funds.
There were questions from the committee, Arey included, asking whether or not a tax rate increase would be sought to make up the $30 million. Craft said they cannot raise taxes enough to make up the $30 million, and it was not said exactly how the district would bridge the gap.
At the end of the meeting, the committee participated in another dot project to prioritize the projects list.
Members were given eight green dots that were numbered 1-8, one being the highest priority. They were also given red dots and could place one red or green dot on each project.
The new middle school and elementary school 37 had the most No. 1 green dots and appeared to be the highest priority projects.
The other new schools were clear priorities but were scrambled when it came to which were more important. The stadium improvements had their own dots for yes or no and it was split nearly down the middle.
The meeting Tuesday was held at Peebles Elementary School in Killeen, one of the schools the district is considering rebuilding along with Harker Heights Elementary School, which is where the second bond steering committee meeting was held.
The next bond steering committee meeting will be at 6 p.m. Dec. 17 at Maude Moore Wood Elementary School, a new school in its first year of use.