Pflugerville ISD is seeking $332 million, largely to fund growth-related projects. Round Rock ISD proposed a $508.4 million bond to fund projects the district classified as “critical needs.”
Addressing ‘critical needs’
RRISD’s bond exploration process began in February when the board approved the charter for a Citizens Bond Committee.
The committee originally identified more than $800 million in district needs but narrowed the list down to those that were deemed most urgent. On Aug. 2 the committee presented the board with three recommended bond packages ranging from $429.5 million to $586.7 million.
From those recommendations the board was able to solidify a project list to move forward to the November ballot.
“The very genesis of this is a critical needs bond,” trustee Mason Moses said at the Aug. 20 meeting at which the board called the bond election. “These are the needs.”
The proposal
Several of the projects in the bond proposition were also on the unsuccessful $572.1 million May 2017 bond. Notably, the district is once again proposing a natatorium, or indoor aquatic facility, but this year the proposed project has been scaled back to $16.14 million. District staff pointed to a facility in Fort Bend ISD as an example of a natatorium that could be constructed for less than the $22 million considered last year.
Another notable difference from 2017 is the absence of construction costs for a sixth high school. One of three 2017 bond propositions included $150 million for High School No. 6. This year’s bond proposition includes $500,000 for designs for the high school with construction costs to be requested in a future bond.
This year’s bond will also be packaged differently than the 2017 bond proposal, appearing as a single proposition rather than separate propositions.
According to the project list approved by the board, the projects would be completed between 2018 and 2021. The initial total cost of the proposed projects is $444.85 million, but projected cost escalations on several of the projects bring the bond total to $508.44 million. District staff projected an 8 percent cost increase per year as the project costs tend to increase over time.
District officials said the bond was designed to avoid raising the district’s property tax rate. Because RRISD has been paying off past debt, the district has enough debt capacity to make payments on the bond, if it is approved. The district will also employ a ‘pay-as-you-go’ system by borrowing and repaying funds over time rather than all at once.
“These are needs that are not going away. If we keep kicking the can down the road, it’s going to get more expensive,” trustee Nikki Gonzales said.
At press time, no group has publicly taken a stance in opposition to the bond although some have expressed concerns, including cost estimates and cost escalation.
The Round Rock Chamber and Austin Chamber of Commerce both endorsed the district’s proposed bond.
Addressing growth
Pflugerville ISD’s rapid growth and rising property values have presented the district and its residents with both challenges and opportunities. The board of trustees voted Aug. 16 to place a $332 million bond proposal designed to accommodate that growth on the November ballot.
The proposed bond, which includes more than $140 million for the construction of three new schools, was formed under the assumption that the district’s tax rate will stay the same or decrease in the future, PfISD Chief Financial Officer Ed Ramos said.
As many taxpayers feel the pinch of property values pushing tax bills higher, the district’s revenue is increasing, allowing the district to afford a bond while keeping the tax rate the same or lower.
Because PfISD is nearly finished paying off its previous $287 million bond issued in 2014, the district can seek funds from the Texas Education Agency’s Golden Pennies program, which rewards districts that pay off debts in a timely manner.
PfISD’s property tax rate comprises of a maintenance and operations tax rate, or M&O, and a debt services tax rate, which goes toward paying off bond debts.
In November, voters will decide on a “tax swap” that would increase PfISD’s M&O tax rate by $0.02 cents while decreasing the debt services tax rate by $0.04 cents. This would reduce the total tax rate paid by district residents from $1.54 per $100 valuation to $1.52 per $100 valuation.
Ramos said the tax swap would trigger $4 million in state funding from the Golden Pennies program.
The 2018 bond process
PfISD is expected to add 798 students during the 2018-19 school year with about 40 percent attending elementary school, according to the city demographer.
This growth, much of it in southeast areas of the district, is the main driver of the bond, PfISD Superintendent Doug Killian said.
“That [growth is] about an elementary a year, so we’re going to need more facilities,” Killian said.
State funding decreases as property values increase and local tax collection grows, budget documents show. Building or upgrading facilities requires bond funding, Killian said.
“We’re on a fixed income,” Killian said. “When values go up and we get more property wealthy, we get less state aid, so it equalizes the system.”
Since 2014, state funding has steadily decreased nearly $18 million to its projected FY 2018-19 total of just over $75 million, budget documents state. Local taxes are projected to contribute over $150 million to the district’s budget.
Chris Davenport, co-chairman of the 2018 Citizen Facilities Advisory Committee and a member of the 2014 committee, said this bond involved more voices than in 2014.
“It wasn’t a pre-drawn agenda or list of things to decide about,” Davenport said.
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