How is it possible for this bond package to result in no tax rate increase?
The bond package will result in no tax rate increase due to local property value growth and the District’s management of debt over time.
- Property value growth
- The District has experienced significant property value growth in the past three years.
- With the new residential development that is currently underway, and is projected to continue, the District’s property values are projected to continue increasing for the next several years.
- This property value growth equates to more property tax revenue to pay bond debt without a tax rate increase.
- Based on conservative projections of property value growth and interest rates, the District’s tax rate won’t change as a result of this potential bond election.
- Aggressively managing the District’s current bond debt
- The District and its Financial Advisor actively manage the District’s outstanding bond debt.
- The District has provided taxpayers more than $34 million in interest cost savings since 2006 by using financially conservative, yet aggressive, debt management strategies. At every opportunity, the District pays debt early and or refinances debt to save costs. More than 50% of these interest cost savings have occurred since 2014.
- The debt management strategies utilized by the District are similar to an individual refinancing their home mortgage when interest rates decline.
The District works with its financial advisors at BOK Financial to project the District’s ability to pay off the debt that will be associated with the 2019 Bond proposal if voters approve it. BOK and the District use historical data and current market conditions to conservatively project future value growth and market conditions like interest rates. Because student enrollment growth is rapid in the District, and demographic projections show the need for more schools beyond the 2019 Bond, BOK and the District have used only four years of property value growth when projecting the District’s ability to pay off the debt that would be associated with the 2019 Bond proposal.