Statewide Adverstising



Committee gets idea of tax impact for building projects

July 29th, 2010

Numbers were based on higher than anticipated interest rates and building costs, but Sibley East’s Steering Committee was recently given a glimpse of the potential tax impact if the school would proceed with building construction or a remodeling project.

The steering committee was given estimated bond payments and estimated taxpayer impact for three potential projects. Superintendent Stephen Jones explained that the figures are very preliminary at this point and are based on assumptions. He referred to them as “talking points.”

Sibley East’s financial advisor, Ehlers, informed the committee that regardless of what option is chosen to resolve Sibley East’s space needs issues, the school district, with voter approval, can issue general obligation bonds to finance school construction projects. Although building bonds are usually used for new schools and additions, they may also be used to finance equipment, networks and other infrastructure and all types of facility renovations and improvements.

A simple majority vote at a referendum election is required, 60 percent if the district receives an unfavorable Review and Comment which is done to comply with State Statute.

If the project is approved, general obligation bonds would be issued. Funds from the bonds can be used for almost any type of capital expense related to both equipment and facilities. It cannot be used for operating expenses. Other permitted uses include software purchases, consulting fees related to a capital project, and salaries and benefits for staff involved in planning and implementing capital projects.

Debt may be repaid for any period up to 30 years. Superintendent Stephen Jones reported that Sibley East does not have any long term debt. He added that Sibley East’s operating levy is $600 per pupil, far below the state average.

Interest rates used for the following projections range from 4.2 percent for 20 years, 4.4 percent for 25 years, and 4.55 percent for 29 years.

REMODELING EXISTING BUILDINGS

The estimated bond issue for reconfiguring the existing school buildings is $28,640,000 for 20 years, $28,685,000 for 25 years, or $28,720,000 for 29 years. Annual debt for the 20-year option is approximately $2.25 million, 25-year option is approximately $2 million, and for the 29-year option is approximately $1.89 million.

With this plan, the estimated tax impact for a home with the taxable market value of $100,000 would be $256/annually for 20 years, $229/annually for 25 years, and $215/annually for 29 years.

The estimated tax impact for commercial/industrial property valued at $250,000 would be $1,088/annually over 20 years, $971/annually over 25 years, and $912/annually over 29 years.

The estimated tax impact for an agricultural homestead with a taxable market value of $250,000 would be $496/annually for 20 years, $443/annually for 25 years, and $416/annually for 29 years.

NEW PRE-K TO GRADE 12 SCHOOL IN SQUARE SHAPE

If Sibley East School District residents decide to construct a new pre-Kindergarten through Grade 12 building with a square-shaped option, there would be $37,560,000 for 20 years, $37,620,000 for 25 years, and $37,665,000 for 29 years.

Debt levy for the 20 year option is estimated to be $2.95 million, $2.63 million annually for 25 year option, and $2.48 million annually for 29 year option.

For a residential homestead with a taxable market value at $100,000, the estimated tax increase would be $328/annually for 20 years, $296/annually for 25 years, and $281/annually for 29 years.

The estimated tax impact for commercial/industrial property with a taxable market value of $250,000 would be $1,394/year for 20 years, $1,259/year for 25 years, and $1,192/year for 29 years.

For agricultural homestead property with a taxable market value of $250,000, the estimated tax impact would be $636/year for 20 years, $574/year for 25 years, or $543/year for 29 years.

NEW PRE-K TO GRADE 12 SCHOOL WITH WING OPTION

If Sibley East School District residents decide to construct a new preKindergarten through Grade 12 building with a wing option, funds available for the building program are estimated to be $42,695,000 for the 20 year option, $42,765,000 for the 25 year option, and $42,815,000 for the 29 year option.

Annual debt levy is estimated to be $3.35 million for the 20 year option, $2.99 million for the 25 year option, and $2.82 million for the 29 year option.

For residential homestead property with a taxable market value of $100,000, the estimated tax increase would be $369/year for 20 years, $333/year for 25 years, and $315/year for 29 years.

Estimated tax impact for commercial/industrial property with a taxable market value of $250,000 would be $1,567/year for 20 years, $1,414 for 25 years, and $1,337 for 29 years.

For agricultural homestead property with a taxable market value of $250,000, the estimated tax increase would be $714/year for 20 years, $645/year for 25 years, and $610/year for 29 years.

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