The district has posted A PDF of the bond scenario presentation Dec 2016
In it, they propose restructuring existing debt services because the district cannot afford the current repayment schedule. They propose reducing the annual payments for 2017 to 2022 and extending the payment period a couple years.
It then shows the additional annual payments and additional years of payments for the proposed new debt.
In the background (grey) is the existing debt services schedule.
I took a screen shot of this graph, shifted the data over and added the recent debt services payments for comparison.
For the source of existing bond pauments see our previous post cusd-200-existing-bond-repayment-schedule/
For the graph above, the debt-issued was subtracted from debt-retired to show the net change in debt principle. If the referendum passes, we will go from an average of actual debt payments of approximately $11.4 million per year (2012 to 2016) to $25 million per year. Even without the new debt (but with restructuring), the district plans to pay $20 million er year.
The Hubble referendum (2007)
For the last referendum that passed, the district advertised a constant tax rate. On this chart that I saved it also mentioned (I’m sure most voters missed it) that they were assuming home values would increase at 4% annually and adding new construction to that would result in a total district asset value increasing 5% annually. Translation: they back-loaded the bond repayment schedule such that it increases exponentially. When home values fell rather than increased, taxes went up anyway!
They correctly assumed that most people would only care how much taxes would go up next year – and not notice the debt bubble they were creating. We’re paying for it now.
Tax Increase rules
Each year the district votes for the requested tax level for the upcoming year. The actual amount they receive (and you pay for in property taxes) is limited based on CPI (inflation) and growth (new construction in the district). However, repayment of bonds for a referendum is on top of that. Voting Yes, is voting for a Tax increase.
Total annual budget was just shy of $150,000,000 in 2016
Increasing debt services payment by $5,000,000 for the proposed debt will increase property taxes by 3.33%
That is on top of the fact that the district already needs more money for the existing debt! Let’s see how the district “spins” this one.