8 COMMENTS

  1. There’s not enough details or transparency in the Bond Package Summary to vote for it. I’ve seen a better breakdown on a restaurant receipt. I’d prefer more accountability if I’m going to have to vote to raise taxes on my family. And I don’t trust that motivations of some of those are advocating for its passage.

  2. I’d like to clarify a few incorrect points in this column:

    1. The new bond WILL be layered on top of current debt. The new bond will not be added all at once but over the next 5 years, and require approximately 20 years after each portion to pay off. The new bond will be issued as such: 2017-$202,525,000, 2018-$220,000,000, 2019-$147,460,000, 2020-$89,950,000, 2021-$86,615,000.

    2. The district IS making minimum payments. Per my conversation with Mr. Ball (LISD CFO), the district cannot payoff the debt early like paying off your mortgage early.

    3.The author also claims that the district retired over $91 million in debt in 2015-16. I’m not sure how this is possible since the budget adopted by the school board for 2014-15 allowed $48.3 M in principal and $66.7 M in interest payments, and in 2015-16 allowed for $50.9 M in principal and $70.9 M in interest. If $91 M was truly paid off in 2015-16, then I’d like to know where the extra $39.1 M came from, as it wasn’t in the adopted budget. The author also points out the shorter terms on bonds mean lower interest rates. This is true. Look at a home mortgage. A 15 yr mortgage has a lower rate than a 30 yr. The same goes for a 10 yr or a 5 yr. The reason is because over a shorter payback period, the risk of default reduces and as risk goes down, so does the rate. So if shorter terms save millions each year in interest, why are we not using short terms to begin with?

    4. The aggregate debt HAS gone up, but NOT BECAUSE OF GROWTH. If we look at the total bonded debt per student, it has increased over $8,500 per student in the last 10 years. In 2006, it was $13,592 and in 2015, $22,104. Yes the district has grown in student population, but the debt has not grown at a proportional rate. If we look at the inflation adjusted rated per student, (2006 is $14,781) the debt has increased 49.5% faster than the student rate. This does not look like sound financial planning to me.

    5. Closing Hedrick Elementary WILL NOT re-balance class sizes. According to the 2015-16 attendance records, Hedrick was operating at 79% capacity, while 4 others schools were over 100% capacity, with one at 119%. By looking at the 6 closest schools to Hedrick, 1 is at 103% capacity. This leaves only 5 viable options; unless we want to further overcrowd a school. If we assume that 1/5 of the school will go to each of these 5 schools, this will put schools at 77%, 92%, 97%, 104% and 111% capacity. Sure you can re-balance this a bit, but his would mean a larger population being bused further for school.

    The fact is, bonds are a necessary evil to improve schools. However, this is not a justification to spend like congress and get almost $2 BILLION in debt. We need to look at what we can pay for (meaning paid off in a year, novel idea) and then plan accordingly. We expect congress to eliminate our national debt yet are fine with our schools increasing in debt, this makes no sense.

    I believe there is a way for the district to be “debt” free and save hundreds of millions in interest. This current bond will cost $366.4 M in interest over the next 20 years. That is 49.7% of the original bond. How many improvements and new programs could be funded with that money? If we, the community, are willing to sacrifice and work hard, we can truly make our district one of real innovation with limitless opportunities that will prepare the youth for the future.

    • Dear Mr. Rabner,

      I appreciate the attention you gave to my note. I believe that you may benefit from this additional information in connection with your items noted above:

      1. The amounts of bonds to be issued will correspond with the projects as they are specifically approved by the board. Any projection of timing that you may be utilizing in your note above is just that – no more; and it’s certainly not a forecast. And it will take several months, probably into calendar 2018 before any meaningful construction of new or major renovations of existing facilities will occur – remember that for existing facilities, they can only be worked on primarily in the short summer season; 2017 summer projects are already set. There is a lengthy review, approval and procurement process that is required for every project – both by district policy and state law. And at the same time, LISD will continue to pay down significant amounts of older bond debt as I mention further below.

      2 & 3. With respect, it sounds as though you misunderstood Mr. Ball. While it is not as simple as making early payments on your home mortgage, the district is able to make early retirements via redemption provisions that are often incorporated into the debentures associated with the bonds as they are issued. Debenture provisions also typically allow for the refundings that I described above in order to save a lot on interest in an environment when interest rates go down. And to confirm: yes, the outstanding debt balance of the district was paid down by $91 million during the 2015-2016 fiscal year. And, if current projections hold true, the district is expected to pay down approximately $115 million in currently outstanding debt principal each year.

      4. Again with respect, the metrics you mention are only a piece of the total pie. As I explained in my note, yes debt has gone up, but the taxable base upon which the funds are derived to service the debt has gone up as well. Note how the tax rate has been managed over time (matching the district’s needs to its funding sources effectively). And as the district has grown and aged, the facilities needs have greatly expanded, even as Texas state funding has become more restrictive. Bonds are essential to both building new and improving existing facilities and technology assets for our schools. By properly maintaining our schools and other facilities, not only do our students and teachers benefit, every property owner benefits through valuation enhancements ascribed to a highly rated school district. I’m sure you know how important strong schools are to homeowners and those looking to buy in our neighborhoods.

      As you yourself point out above – bonds are necessary to improve schools, but rather than characterize them as an “evil”, it is more appropriate to simply consider them as a very powerful tool LISD has available since it has maintained a strong financial position with both the financing and investor communities. And, that is certainly expected with the 2017 bond package.

      5. As you pointed out above, there are many options to re-balance the Hedrick school population. While no plan has yet been decided upon, it would be wise to consider that both the board and the administration has given every indication that it will bend over backwards to make this work as best possible. I suggest you give them some credit in this regard. After all, the goal is to bring a brand new middle school into the neighborhood. Everyone agrees that it is a difficult decision, but it is the only way for a new school facility to be properly sited and constructed on the property where the old schools presently reside. And as I originally concluded, this is, in itself, certainly no reason to consider not authorizing the 2017 bond package.

      Regarding the last portions of your reply above, you may wish to re-read my note above. The main thrust of my note was to help clarify against some of the very misunderstandings that you are conveying in your reply. Again to clarify – the new bonds will not be issued all at once, but over several years; only as the projects for which they are to be used are approved by the board and scheduled for completion. The bonds will have a variety of terms to maturity corresponding to the assets for which they are used to fund, many much shorter than 20 years. And because the district is retiring old bonds at the same time these new bonds are issued, the overall debt balance will not get anywhere close to the $2 billion figure you state – not with the 2017 bond package under consideration. Neither will the interest costs approach your simple calculation above since much of the debt will be retired over periods much shorter than the 20 years you mentioned above.

      As you said, the bonds are necessary for the district.

      Again, I appreciate your time in replying to my note and I hope that this additional information will help clarify any remaining confusion you or others may have.

      With respect and regards,

  3. Parker said while the bonds will build new facilities and good development and design stimulates the frontal lobe in turn helping with learning, the district overlooks another important facet to learning: teachers.

    “I’m concerned that we are going to have an expansion of population of students and not enough teachers to cover them,” he said regarding a high student to teacher ratio. “It is a proven fact that a teacher will not be able to give additional detailed attention to that one student who might be lagging behind.”

    In the 2015-16 school year, LISD had one teacher for every 14.1 students, according to the Texas Academic Performance Report. Since the 2012-13 school year, the student to teacher ratio has hovered around 14 to 1, with the 2014-15 year being the highest at 14.3 students per teacher.

    lets remember, there always more side to the story then just one. This is how we debate and create good decisions for texas and education .

  4. Debt per student is over $22,000. Looking at the State Comptroller site for comparable districts we are the most indebted district and second only to Frisco in debt per student. We have the largest bond in the state up for vote for black box theaters and renovations on possible academies.
    On Hedrick and College Street they were supposed to be rebuilt with the 2008 bond. The district has plans to rebuild both schools at Hedrick and could easily rebuild College Street. I asked for the site standards and was told by the district they had none written. Just let us keep our neighborhood schools.

  5. “Throwing the baby out with bathwater” is incredibly patronizing and insulting to those of us who will ACTUALLY be greatly impacted by the destructive parts of this bond proposal. Do YOU have a student who is going to lose his or her neighborhood elementary school if this bond passes? Did you have this decided FOR you by people who don’t live anywhere close to you and will not be impacted by this decision?

    All we want and all we asked for (begged, actually) was to have our neighborhood elementary school rebuilt. This is NOT unreasonable, nor are we selfish if we vote NO because we believe that our cause is just and that this district should not be building 30+ million dollar “multipurpose rooms” at high schools while choosing to put elementary school kids on buses and in portable buildings. All the district had to do to garner support from us was to listen to OUR voices too. These are not “controversial measures”, as you so vaguely and inconsiderately refer to the pain and confusion and fear felt by so many of us right now as we face this election. There are real people who are being impacted here and we matter too. Furthermore, the district did this to itself – it didn’t have to be this way. As it is, I will vote NO because no one should be treated the way that LISD has bullied the people of the Central zone. They need to serve EVERYONE if they want us to agree to pay the bill and right now, they are failing to do that.

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