POCATELLO — Pocatello-Chubbuck School District 25 will be asking local voters to approve a $45 million bond this November to complete improvements at both Highland and Century high schools following a unanimous vote from the school board on Tuesday.
School District 25’s Board of Trustees voted to approve a resolution that calls for putting a $45 million bond with a 15-year repayment plan on the ballot for the election set to be held on Nov. 7.
The district’s decision to ask local voters to approve the bond comes after an April 21 fire gutted the D Wing at Highland High School.
PROPOSED HIGHLAND IMPROVEMENTS
According to draft floor plans from Design West, the Meridian architectural frim that will be leading the renovation projects at both schools, the improvements at Highland High School will include rebuilding the D Wing with significant enhancements and constructing several new classrooms.
The draft design plans for Highland include new choir, band, drama, wrestling and weight rooms as well as new locker rooms. The plans also call for reconfiguring several classrooms outside of the D Wing that will result in a net gain of five new classrooms and a modern science wing. The plans also call for building a new auditorium capable of seating 950 people, a new cafeteria capable of seating about 500 and a new 2,000-seat gym.
The gym area, as proposed, will be two stories with the second story featuring bleachers looking down on the lower level gym and two smaller gym spaces above the locker rooms as well as the weight and wrestling rooms.
Additionally, the draft plans include a large space labeled “proposed parking” located across Bench Road in front of Highland.
During Tuesday’s meeting, Jonathan Balls, the district’s director of business operations, provided the school board with a letter of intent to accomplish a land swap for the proposed parking between the school district and MSP Capital, LLC.
If approved, the land swap would involve the district obtaining ownership of the vacant lot in front Highland High School that totals about 6.5 acres from MSP Capital in exchange for about 10 acres of district-owned land located on the corner of Olympus Drive and Jerome Street.
PROPOSED CENTURY IMPROVEMENTS
At Century High School, the draft design plans call for remodeling the existing gym, making it two stories, and adding an annex to the west of the renovated gym space.
The first floor of the annex, according to the plans, will feature two new wrestling rooms, new locker rooms for home and visiting sports teams, and new spaces for storage and concessions.
The second level of the annex will include bleachers looking down on the new gym space as well as a smaller gym space above the wrestling and locker rooms.
POTENTIAL TAX IMPACTS
If approved, the $45 million bond will be estimated to carry an interest rate of 3.71 percent annually for 15 years, for a total of about $14 million in interest, bringing the total cost of the bond premium and interest to about $59 million.
However, because of Idaho’s bond levy equalization program, which provides state appropriations to subsidize a school district’s bond payments, the district estimates a savings of about $16.5 million, which would reduce the net total bond cost to about $42.5 million with an estimated annual payment of about $2.83 million.
The estimated average annual cost to the taxpayer on the proposed bond is $37 per $100,000 of taxable assessed property value.
The resolution the school board approved on Tuesday states that the district expects to receive school district facilities funds from the state “in an amount each year that will exceed the annual payments on the bonds that must first be used to repay the district’s bonds.”
“Consequently, the actual estimated tax impact of the bond is $0 per $100,000 of taxable assessed value, per year, based on current conditions,” the resolution states.
Understanding the definition of current conditions is a key caveat when it comes to the tax impact of the bond being $0, however.
HOUSE BILL 292 IMPACT ON BOND
As part of property tax legislation passed in March, known as House Bill 292, School District 25 will be receiving about $4.56 million to use toward school facilities costs. The $4.56 million awarded to School District 25 is part of $106 million that school districts throughout the state will receive, which is being distributed based on average daily attendance.
The $106 million awarded to school districts is part of an overall property tax relief amount of $300 million this year that Gov. Brad Little announced in July after the state ended the previous fiscal year with a budget surplus.
The relief was touted by Little and the Idaho Legislature amid rapid increases in property values due to the state’s record growth over the past few years.
For this fiscal year, House Bill 292 is providing $300 million in property tax relief. That number will be reduced to no more than $272.5 million in year two and no more than $332.4 million in year three.
Because the proposed $45 million bond has not yet been approved, School District 25 must use the $4.56 million this fiscal year to offset a portion of the district’s $8.25 million annual supplemental levy that voters most recently renewed in March.
Without factoring in the $4.56 million, the impact the supplemental levy has on local taxpayers is about $108 per $100,000 of taxable assessed property value. The $4.56 million state subsidy will reduce that levy amount from $8.25 million to $3.75 million, which reduces the tax impact from around $108 to about $48 per $100,000 of taxable assessed value, resulting in a property tax break for local residents.
While the district anticipates receiving a subsidy from the state that is less than $4.56 million for each of the next two fiscal years, it still anticipates the amount will be higher than the annual bond repayment amount of about $2.83 million, which would in essence bring the tax impact of the bond to $0 per $100,000.
So, while the bond’s tax impact is getting reduced because of the property tax relief subsidy for the next two fiscal years, the tax impact of the supplemental levy will revert back to the $108 per $100,000 of taxable assessed value for the next fiscal year. And that amount will change again after voters are asked to approve a new two-year supplemental levy in November 2024, Balls said.
Additionally, voters should understand that House Bill 292 only guarantees property tax relief through fiscal year 2026 and it remains unclear whether the program will be extended after the three-year term has expired.
Ultimately, House Bill 292 was designed to provide Idaho residents with a tax break. If the $45 million Highland/Century bond is rejected by voters, local homeowners will receive a tax break because the state subsidy will be used to offset the district’s current supplemental levy as opposed to the added tax impact the bond would create.
“I know that we are putting on the bond resolution that the (tax impact of the bond) might be $0 but I don’t want to hang my hat on that because I don’t count money until it’s in our bank account,” Balls said. “I get nervous saying it will have a $0 impact because (the state subsidy) is reliant on continued legislative support.”
School District 25 said it could receive $25 million in insurance funds because of the Highland fire damage and that money was taken into account before the final bond amount was determined.
The Highland/Century bond requires a supermajority, or at least a 66.67 percent voter approval rating, to pass.
The School District is expected to launch an educational campaign providing local residents with more detailed information about the bond and the enhancements to both schools over the next few weeks.
The bond ballot information must be provided to the Bannock County Elections Office no later than Sept. 18.
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