FORSAN — If voters approved a $23 million construction bond at Forsan Independent School District, only a tiny portion of the costs will be shouldered by residents.
Voters were given a breakdown of anticipated bond costs during a public hearing on the matter at the junior high/high school auditorium Monday evening.
The $23.8 million bond would finance construction of a new elementary school, as well as renovations at the secondary campus. Voters will decide the issue's fate May 11.
School officials estimate the bond will result in a 33.4 cent increase in the district's property tax rate, but most of the burden of paying off that debt would fall on commercial interests, FISD Superintendent Randy Johnson said.
Figures prepared by the district indicate that commercial interests, including the oil and gas industry, wind farms and other businesses in the district, would be responsible for 95 percent of the bond debt, with the rest falling on private homeowners.
Some factors may conspire to lessen the potential tax burden.
Jason Hughes, an investment banker with First Southwest, said property valuations have exploded in the district, going from roughly $200 million in 2003 to more than $1 billion. If valuations continue to rise, that could result in a lowering of the debt service tax rate.
Also, the issue features what Hughes described as a “three-year call.” Although the bond would be structured on a 20-year payment schedule, the district could retire the debt anytime after three years if it so chooses.
For homeowners, the district provided a wide range of estimates on how the bond will effect their tax bills. The high end of those estimates — owners of a $185,000 home (after exemptions) — would see their tax bill increase by more than $600 annually.
Officials were quick to point out that homeowners 65 and older who claim their age exemption prior to the bonds being sold would not see any increase in their school taxes.
The major expense targeted by the bond — $14 million for a new elementary campus — also drew a majority of the questions at Monday's hearing.
One questioner wanted to know if it would be cheaper to simply renovate Elbow Elementary rather than replacing the structure. The answer was “yes” — with a caveat.
Architect Alan Wolfe of Parkhill, Smith and Cooper estimated that required renovations of Elbow to address all of its issues would cost $8.7 million over the 20-year life of the proposed bond, and residents would be stuck with an old building nearing the end of its effective lifespan at that time.
“This is something we studied very closely,” Johnson said. “We realize a lot of people in our district have an emotional attachment to Elbow, but in the end, we felt it made more financial sense to recommend the construction of a new elementary.
“If we simply renovate Elbow, at the end of the day we'll still have a 1950s school building,” he added. “Therefore, we feel very confident with the decision we made.”