Frequently Asked Questions
- What is a bond?
- Why is Jordan bonding?
- What is the amount of this bond?
- What will the money be used for?
- What has been done to delay the need for new schools?
- How many schools have been built without bonding?
- How much more will we pay for staffing and operations if the new schools are built?
- What are you doing about growth at Copper Hills High and Sunset Ridge Middle?
- When was the last successful bond in Jordan School District?
- How much will the bond cost me?
- Why will it only cost us $16.80 per year?
- How do I find out what this bond will cost me?
- What alternative funding methods have you considered?
- Why can’t you collect impact fees?
- Why don’t you build every school from pay-as-you-go?
- What is the plan for rebuilding West Jordan Middle School?
- How will the proposed bond impact debt per student?
- What is the District’s Bond Rating?
- What Happens if the Bond Does Not Pass?
- How Will The Proposed Bond Impact or Benefit Charter Schools?
- Where can I find the actual language that will appear on the ballot?
Q: What is a bond?
A: A bond is a type of low interest loan school districts use to pay for new school construction. It’s very similar to a home loan or mortgage, but for school buildings. Just like homeowners, the District borrows money and makes monthly payments typically over a 20- year period or until the loan is paid off. Bonding requires the approval of taxpayers through an election.
This is the least costly option for taxpayers to build school buildings. Tax payments for a bond typically go down each year as bond debt is paid off. Again, bonding is the best option for taxpayers because it offers the lowest interest rates. We could use traditional funding, but it has higher interest rates. This means a tax increase would be required to pay for the higher rates. Taxes would then go up but not come back down like they do when bond debt is paid off.
Q: What will the money be used for?
A: The bond money will be used to build 6 new schools only. Rebuilding West Jordan Middle for safety and technology is included in the 6 new schools. None of this money will be used for upgrades or renovations.
Q: What has been done to delay the need for new schools?
A: The District has done many things to help manage growth. One of them is the use of portables. In some areas like Herriman and Bluffdale, the growth is coming so quickly that schools can’t be built fast enough to accommodate all the new students. This is when portables are needed. Portables help keep taxes low and give us flexibility with enrollment at a school when population is fluctuating in a community. They save us in building and renovation costs and can be moved as needed. When a school is over capacity, portables allow us to accommodate students without busing them to other schools.
Right now we have 250 portable classrooms District-wide housing 6,250 students. Again, as populations shift, we can move the portables to new locations where they are needed most.
Q: How many schools have been built without bonding?
A: With careful trimming of District budgets and using some non-traditional funding, Jordan has built or purchased seven new school buildings since the District division in 2009. We are currently building two new schools in this manner. However, we have reached a point where this is no longer possible in order to keep up with current growth.
Q. How much more will we pay for staffing and operations if the new schools are built?
A. Typically, growth in the community brings in enough new tax revenue to finance the operations and maintenance of a school, just not enough for us to build new schools. When we see additional students and a broader tax base, additional funding becomes available from the state and the tax base. The funds associated with those increases are used to keep our schools running, but again, it’s not enough money for new school construction. That is why we are bonding and turning to taxpayers for help.
Q: What are you doing about growth at Copper Hills High and Sunset Ridge Middle?
A: Research from Davis Demographics shows that over the next five years, Sunset Ridge Middle is projected to grow by 6.6% or 104 students. West Hills Middle is projected to decline in enrollment by nearly 9.5% or 111 students. We feel between these two schools we would be able to accommodate these fluctuations in student enrollment with portable buildings or, if needed, boundary adjustments. In contrast, Copper Mountain Middle is projected to grow by 111% or 1,420 students.
Similarly, Copper Hills High is projected to grow by 3.7% or another 99 students over the next five years. Herriman High is projected to grow by 82% or 2,158 students. Long-term, we will need additional schools in west West Jordan. However, projections show within the short-term, we have capacity at neighboring schools to accommodate the growth.
The graphs below illustrate the difference in projected growth between the Herriman and the Copper Hills feeder systems.
Q: How much will the bond cost me?
A: Zions Bank has calculated the average homeowner will pay $16.80 more per year than they currently pay for bond payments. Within a few years, taxes for the proposed bond will go down and even dip below current levels. Zions Bank is advising us on bond financing and has provided these calculations.
Q: Why will it only cost us $16.80 per year?
A: Jordan is about to pay off the 2003 bond, so there will only be a few years where the old bond and the proposed bond overlap, creating the $16.80 increase. After that, the 2003 bond is paid off and we will only be making payments on the new bond. It’s like buying a new car once the old one is paid off, but keeping the same payment. We are just extending out the loan.
* The average home in the District has a value of $300,000. Taxes for bond payments are expected to go up by the above amount over a few years and then gradually go down.
Q: What alternative funding methods have you considered?
A: Bonding is the best option for taxpayers because it offers the lowest interest rates. We could use traditional funding, but it has higher interest rates. This means a tax increase would be required to pay for the higher rates. Pay-as-you-go has the highest costs to taxpayers in the long run. That’s because construction inflation costs go up each year.
Q: Why don’t you build every school from pay-as-you-go?
A: Growth is coming faster than we can keep up with using existing funds. We’ve stretched our budgets as far as they’ll go without bonding. We have built seven schools since 2009 without bond money. Pay-as-you-go is just not an option anymore. The students are coming too fast.
Q: What is the plan for rebuilding West Jordan Middle School?
A: As part of the proposed bond plan, West Jordan Middle would be rebuilt at the current location, on green space behind the school. Students would not be displaced or moved to another location during construction because they would stay in the old building while the new school is being built. Construction is proposed to begin in the spring with a projected opening of the new school in the fall of 2019-2020.
Q: How will the proposed bond impact debt per student?
A: Our debt per student would go up, however it would still be lower than all but two school district’s along the Wasatch Front. As you can see in the chart below, when JSD’s old bond debt is paid off in 2019-20, we would still have less debt per student than Alpine, Davis, Murray and Canyons school districts. In fact, among the 33 districts with voter-authorized debt, we currently have the lowest bond debt per student in the entire state. With the proposed new bond we would still be the third lowest in Utah.
Q. What is the District’s Bond Rating?
A. Jordan District’s AAA bond rating from Standard & Poor’s (S&P) and Moody’s Investment Services has recently been reaffirmed. This means the District will be able to acquire the lowest possible interest rates on the sale of general obligation (GO) bonds. That translates into savings for taxpayers and more funds available for teaching and learning. Jordan is one of five school Districts in the state of Utah with this rating.
Q. What Happens if the Bond Does Not Pass?
A. The Board has a number of options available if the bond does not pass. Some of those options may be difficult on families, students and staff, but any extreme measures will be avoided if possible. The District is projected to grow by an additional 9,250 students over the next five years. We have limited space in terms of classrooms and buildings, but have a responsibility to accommodate the incoming students. So, something will have to be done to deal with growth. The options could include the following:
- Additional portable classrooms
- Boundary adjustments
- Additional year-round schools
- Additional modified traditional schedule schools
- Elimination of programs or moving programs
- Permit moratoriums
- (More extreme measures) Pocket busing, Double sessions, Double sessions year-round
Even if we do all of the above, new schools will be needed and will have to be financed with more expensive options. In terms of building new schools without a bond, the District could look at alternative funding sources such as loans from banks or private entities or a tax increase.
Q. How Will The Proposed Bond Impact or Benefit Charter Schools?
A. Charter schools receive the statewide average on funding. So, as school districts anywhere in the state increase tax revenues, including issuing bonds to build new schools, the statewide average of tax revenues increases. This, in turn means more money for charters and is called Local Replacement Funds.
Also, when bond money is available to build additional schools, the District has more seats available for students who may want to enroll in a charter for elementary school but come back to a District school for their secondary education.
As we plan for the future in building new schools, we take into consideration that charter schools may absorb some of the student growth and we plan accordingly.
At the end of the day, we all benefit from successful schools. Working side by side, District and charter schools alike can have a profound impact on young lives and the communities in which we live.
OFFICIAL BALLOT FOR
BOARD OF EDUCATION OF JORDAN SCHOOL DISTRICT, SALT LAKE COUNTY, UTAH
SPECIAL BOND ELECTION
November 8, 2016
Business Administrator, Jordan School District, Salt Lake County, Utah
Shall the Board of Education of Jordan School District, Utah, be authorized to issue General Obligation Bonds in a principal amount not to exceed $245,000,000 and to mature in no more than 21 years from the date or dates of issuance of such bonds for the purpose of paying all or a portion of the costs of constructing, acquiring, furnishing and equipping new school buildings and facilities; rebuilding existing school buildings and facilities; acquiring land for school buildings and facilities, and, to the extent necessary, for providing moneys for the refunding of general obligation bonds?
Property Tax Cost of Bonds. The District has other outstanding bonds for which a tax decrease would occur upon the retirement of such bonds, which may not occur if the proposed bonds are issued. The outstanding bonds reduce over time such that the incremental property tax due to the issuance of the proposed bonds (after the full $245,000,000 of bonds is issued) is expected to have a net increase from current annual property tax levels of approximately $16.80 per year on a $300,000 primary residence and approximately $30.55 per year on a business or secondary residence having the same value.
If the Bonds are issued as planned, without regard to the taxes currently levied for outstanding bonds that will reduce over time, an annual property tax to pay debt service on the proposed bonds will be required over a period of 20 years in the estimated amount of $127.79 per year on a $300,000 primary residence and in the estimated amount of $232.35 per year on a business or secondary residence having the same value.
The foregoing information is only an estimate and is not a limit on the amount of taxes that the Board may be required to levy to pay debt service on the bonds. The Board is obligated to levy taxes to the extent provided by law in order to pay the bonds. The amounts are based on various assumptions and estimates, including estimated debt service on the bonds and taxable values of property in the District.
- FOR THE ISSUANCE OF BONDS
- AGAINST THE ISSUANCE OF BONDS