Ballot wording set for LHISD bond

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By MIKE EDDLEMAN
Managing Editor

Asking the community to take on more debt to accommodate explosive population growth in the school district is a tall order under the best of circumstances. But legal requirements that dictate how bond propositions must be worded when presented to voters can also create big headaches on their own.

“In the last legislative session, as part of House Bill 3, there was a new law that requires all bond propositions for any school district to have the phrase ‘this is a property tax increase’ on all ballot language,” said LHISD Chief Financial Officer Rosanna Guerrero. “Due to this requirement, all voters will see this statement on the official ballot language, even when there is no tax rate increase as a result of the bond.”

That statement, “this is a property tax increase”, is referred to as misleading by some and a fair warning to voters by others, but to many who read it as they make their decision at the polls it can be confusing.

The expectation among those who passed the law in the Texas Legislature is that a bond passed will increase taxes. But it is not as clear cut as that.

In the case of Liberty Hill ISD, and the $491 million bond package on the May 1 ballot, the tax rate itself can’t be increased due to the cap on the Interest and Sinking (I&S) – or debt fund.

“We have proof and evidence the tax rate will not increase,” Guerrero said. “We have the 50 cent test, which by law says we cannot exceed 50 cents on the I&S tax rate. We are already at 50 cents, so we don’t have the ability to even increase that. Second, because of our debt capacity and property value growth we do not need to raise the tax rate because of that.”

While the debt service rate has remained at 50 cents, the Maintenance and Operations (M&O) tax rate – or the portion that covers day-to-day operating expenses, has decreased in back-to-back years.

The current LHISD combined tax rate is $1.3647 per $100 valuation, with the M&O portion being $0.8647.

In the 2018-2019 budget year, the combined tax rate was $1.54 with 50 cents of that rate being for debt service, and the 2019-2020 rate was $1.47 with the same portion being for debt service.

The M&O reductions were mandated by the Legislature, but the I&S cap has remained the same.

The reason the district has increased debt capacity is the growth in the community, both in housing and business development. The current rate of growth is 19 percent.

With the tax rate unmoved, even if the bond passes, it does not mean homeowners will not pay more in property taxes, but that is dependent on appraisal values, not bond approval.

“The appraisals on homes are part of the Williamson Central Appraisal District. The school district has absolutely no say and no connection to the appraisal of homes or property values,” Guerrero said.

The required wording in the bond language is a challenge, according to LHISD Superintendent Steve Snell, but something they must work around as they explain the proposal and its financial impact on voters.

“In my opinion there are a few rules that make our jobs a little more complicated but at the end of the day it’s our responsibility to get a truthful message out to the public and give them the information they need to make an informed decision at the polls,” Snell said. “That’s where our focus is going to be. We will focus on the legality of the bond language, and wish we had a little more control over that, but at the end of the day we just have to inform people why that language is there and what it means.”

For the district, the message will continue to be about growth numbers and the reality that comes with needing to accommodate more and more students each year.

“I want the public to know we are definitely in a fast-growth situation, which is going to require a lot of debt to be approved by the voters,” Snell said. “But we’ve got an excellent financial plan and we’re going about this very responsibly. Not that you’re ever comfortable with debt, but we’re very confident in our ability to pay off the debt as we move forward into the future.”

That growth has been to the tune of 1,400 students this year from last year alone, and demographers have projected that the Fall 2021 enrollment for the district at 6,566, from the current number just over 5,700. That number is expected to double by 2025 to 12,215. Beyond the five years the current bond is intended to address, enrollment is projected to nearly double again by 2030 to over 22,000.

The bond proposal includes $457.7 million for new campuses, renovations and additions to existing campuses, planning funds for additional new campuses, land purchases and a variety of other infrastructure projects. This portion makes up most of the total bond package.

The bulk of this proposition is for new campuses, with $86 million planned for two new elementary schools – $42 million for the first and $44 million for the second due to anticipated increases in construction costs. There is a third middle school planned at $70 million, and then a second high school at $145 million.

An additional $54 million is included in the first proposition for renovations and expansions at five of the district’s campuses.

Both Liberty Hill Elementary and Louine Noble Elementary (currently Liberty Hill Intermediate) will be expanded with some renovations to make them equal in student capacity to the district’s other elementary campuses at 800. The funds will pay for a new classroom wing, expanded library, gym and traffic management, as well as additional furniture needed and fine arts improvements.

That expanded capacity is also the reason there are funds planned to expand Santa Rita Middle School, which is still under construction and set to open next Fall. The available funding for the last bond, and projections at the time limited the district to a smaller capacity than the expanded capacity planned today.

The funds for Santa Rita Middle School will be for a new classroom wing, while those for Liberty Hill Middle School – the current junior high – will be for expansion as well as upgrades to the common areas, new roofing, traffic management and additional furniture needs.

The funds for expansion at the High School will be for added student capacity, Career Technology Education additions and fine arts upgrades.

The second proposition voters will decide on is $8 million for technology devices for both teachers and students. Due to legal requirements, the purchase of these items must be broken out in a separate proposition in part due to the shorter length of time they will be financed.

The third proposition is $6 million for expansion of Panther Stadium and the fourth is for $20 million to build a second stadium at the second high school.

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