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Bond Programs

General Questions

School Bond 2015 Mesquite ISD

* Signifies questions submitted by patrons attending our 2015 bond package presentations. Questions from different individuals but covering the same topic were combined. Some questions were reworded to clarify the topic or to eliminate inflammatory language or comments.


What is a school bond?

Much like a home mortgage, a bond is a contract to borrow money and repay it with interest. Bonds allow the district to finance new school construction, renovations and additions, equipment, technology infrastructure and the purchase of land.

 



What are capital improvements?

Capital improvements are large expenditures expected to have long-term use, such as new schools, renovations, furniture, equipment, school buses, technology infrastructure and school sites.



What challenges led to the calling of the 2015 Bond Election?

Mesquite ISD's enrollment continues to grow by several hundred students each year. In addition, many of our schools and other facilities are decades old. Some of these require maintenance or modern upgrades. In some cases, it is more prudent to rebuild a larger version of the school rather than renovate it. In addition, our technology must be kept current to prepare students for the future by providing an effective learning environment for students and sufficient systems for staff.



How was the amount of the Bond Election Determined?

A diverse citizens' Bond Steering Committee made of up community members, parents and district employees representing all geographic areas of the district reviewed the Facilities Evaluation, enrollment predictions and district financial data to determine the bond package amount. After considering the data, the committee voted to recommend at $280 million package to the Board of Trustees.



How far into the future will this bond program support the district?

Sale of bonds in the 2015 package are expected to fund projects for the next five years.



How does the bond program affect me if I do not have children in school?

If you are a homeowner in Mesquite ISD's boundaries, your school tax rate will increase by 5 cents for every $100 of taxable property valuation. However, if you are over the age of 65, you may file for a “freeze” on your school property taxes so that they will not increase as long as you remain in your home and do not make any major improvements to your home.

Aside from the tax impact, public schools play an important role in a community's economic development – the ability to attract new residents and businesses and prepare the next generation for the workforce.



What will happen if the bond package is not approved by voters?

Mesquite ISD depends on the sale of bonds to fund construction projects and other capital improvements and expenditures. Without additional bond funds, Mesquite ISD will not be able to pay for the projects included in the 2015 bond package proposal. Some smaller expenditures may be afforded through the district's operating budget, but those funds are extremely limited as they are already allocated for salaries, utilities and other instructional and maintenance costs.



When was Mesquite ISD's last bond election?

Mesquite ISD's last bond election was in May of 2007, and it was approved by voters. Although the funds provided by the sale of those bonds were expected to last five years, Mesquite ISD was able to stretch those dollars to cover projects for seven years. The last project that will be funded by the 2007 package is the rebuild of Range Elementary, which is scheduled for completion in July of 2016.



Was every Mesquite ISD facility examined during the 2014 facilities assessment?

Yes, Mesquite ISD hired WRA Architects to do a thorough assessment of nearly every district facility. Newer schools and those with recent additions/renovations were not assessed; however, some schools were included in the list simply because of capacity issues or known needs like fine arts at some middle schools. Each facility's project needs were then ranked according to priority.



How will Mesquite ISD determine the order for projects in the 2015 bond package?

Project order is determined using priorities determined through our Facilities Evaluation (completed last fall) and current factors that affect enrollment, such as new housing additions or apartment complexes. Because circumstances can change, the district must remain flexible with its timelines and priorities.



*If this bond is approved, will we be able to get rid of all the portables and bring all the students into our buildings?

No. Mesquite ISD currently has more than 300 single classroom units (SCUs or “portables”) in use around the district. While it would be ideal to have all campuses entirely contained within one building, the total enrollment at every campus changes each school year. SCUs give the district flexibility to add or remove classrooms as needed. It would be impossible to predict the exact number of classrooms each campus would need on a permanent basis. Adding or relocating SCUs is a more cost efficient option than permanently building onto existing schools.



*What can we do to help the bond pass for our school?

The school district cannot advocate for passage of the bond proposal, but MISD encourages all registered voters to vote in the election.



*How was it determined which schools would receive funding? Was it based on age or something else?

The district conducted a thorough facilities study to evaluate nearly every campus. While age was definitely a factor, projected growth in the area surrounding a school, the number of single classroom units (portables) at a campus and other factors all go into the decision-making process. The projects included in the proposal at this time are projected to be included, but there is no guarantee that priorities will not shift.


How Bonds Work


Can bond funds be used to hire more teachers or improve teacher salaries?

No. Proceeds from a bond can only be used for the costs associated with construction and renovation of district facilities, the acquisition of land, and the purchase of long-lasting items, such as equipment or technology infrastructure. Bond proceeds cannot be used to pay staff salaries.



Does the district pay for short-term assets (such as technology and buses) over a 30-year period of time?

No. Rather than doing separate issuances for short-term assets and long-term assets and incurring the costs of issuing two series of bonds, the District sells one series of bonds and structures the payments in such a way that the principal related to the short-term assets are paid off during the useful life of that asset. For example, technology costs in the issuance would be paid off in five years and school bus expenditures would be paid off in 10 years. Similar to a home mortgage financing, the amount of principal paid off each year increases while the amount of interest cost decreases.



If voters approve the bond referendum, is the entire amount issued all at once?

No. Bonds are issued to cover the cost of projects at the time they are needed and approved by the School Board.

Mesquite ISD typically issues bonds in $30 million bundles. If growth slows, and the District did not need to build or renovate schools as quickly as projected, then the bonds would not be issued as quickly. For example, funds from the 2007 bond program were originally estimated to be expended by 2012, but they were extended to last through 2016.


Mesquite ISD Finances


Mesquite ISD has a healthy fund balance. Why doesn't the district use those funds to maintain facilities?

Texas Education Agency accounting standards recommend maintaining a fund balance equal to at least two months of a district's maintenance and operations budget. Bond rating agencies also look at fund balance amount to determine a district's financial health.

Mesquite ISD has one of the strongest ratings in the state due to its fund balance and history of fiscal responsibility. Having a strong bond rating translates to lower interest rates when bonds are sold. Therefore, a strong fund balance will save taxpayers tens of millions of dollars over the course of repaying the bonds.



Does Mesquite ISD use competitive bids for construction projects?

Mesquite ISD follows a bidding process prescribed by state law. The selection process for contractors is competitive. It allows the district to select contractors based on the best value for Mesquite ISD.



Will Mesquite ISD be able to sell its bonds at a favorable rate?

Mesquite ISD's credit ratings earn the district a spot in the top tier of Texas' most creditworthy school systems. Because of these high ratings and the current low interest rates, the district expects a very favorable market for its bonds.




Is there a limit to how much debt the district can take on?

Yes. Local statute mandates that Mesquite ISD's total debt burden may not exceed more than 7% of the total assessed taxable valuation of property within the district. The district's current debt burden is about 6% of total taxable valuation. It is difficult to provide more specific information for the future because we don't know what our assessed values will be; however, the district closely monitors this factor.


Tax Rate


What are the parts of the district tax rate and how are they used?

The total tax rate is a combination of the Maintenance and Operations (M&O) tax rate and the debt service tax rate (Interest and Sinking or I&S rate).

M&O funds are used for day-to-day operations, including salaries, supplies, utilities, insurance, fuel, etc. Revenue from I&S taxes can only be used to retire bonds sold for specific purposes, such as construction, renovations, buses, portable buildings, land, technology and the cost of issuing bonds and related fees.

The current M&O and I&S tax rates are $1.04 and $0.37, respectively. If the 2015 bond package is approved by voters, the I&S tax rate could increase to $0.42.



*Has the tax increase from the 2007 bond election been reduced or will the estimated $4.16 per month for $100,000 be on top of that?

The district's I&S tax rate increased from $0.3423 in 2006-07 to $0.38 in 2007-08 following the 2007 bond election. In 2012, the I&S tax rate was lowered to $0.37, where it remains today.

The tax increase associated with the 2015 bond packaged could raise the I&S tax rate to $0.42 as needed to pay the bonds. Mesquite ISD does not anticipate an increase to the I&S tax rate for the 2015-16 school year.


Specific Projects


*Why are we renovating Floyd if it is less than five years old?

The Floyd project would include an eight-classroom addition to the current building. These classrooms would be needed if additional apartments are constructed in the area. Current enrollment at the campus totals 853 students, which is more than original growth estimates predicted.



*If the bond is approved, what is the process of purchasing land?

Land for school sites is purchased where there is a need or projected need. We use demographic information, enrollment projections and housing projections to guide our decisions about land purchases.



*How many of the 400 to 800 students per year are here illegally?

Mesquite ISD has no way of knowing how many of our current or new students are in the country illegally. Current law does not permit us to ask, and we do not collect or track that information. Under the law, all children in our community – legal or not – are entitled to a free and public education, and that is what we provide for them.



*With Lawrence being an older school than most listed, why wouldn't it be rebuilt rather than renovated? What priority will Lawrence fall?

Our primary guide on making decisions like this is our Facilities Evaluation that was completed in the fall of 2014. Lawrence was rated a priority 3 out of 4 (1=highest priority). With a small attendance zone and a declining enrollment, it was decided at this time that we would consider an addition/renovation rather than a new facility. Although the project is included in the 2015 bond package, we have not determined a specific time frame for when the project would occur.



*If Mesquite ISD builds a ninth middle school, where would it be located?

Mesquite ISD has a designated middle school site on McKenzie Road south of Faithon P. Lucas and the Mesquite Girls Softball Complex. That is the probable location of our next middle school.



*If $30 million will go to uniforms and band instruments, how does that help parents and students when we purchase uniforms for our children and band instrument rentals?

Band uniforms are purchased by the district. Parents are asked to buy only shoes and gloves. The district purchases large and/or very expensive instruments such as tubas, marimbas, harps, drums, etc. because it would not be reasonable for a parent to purchase these instruments that cost several thousands of dollars each. The district is also are required to have a supply of instruments on hand for economically disadvantaged students who are not able to rent an instrument.



*What will happen to those students who are homeless with regard to computers being used instead of books?

Mesquite ISD has not adopted the use of computers in place of textbooks. Students will continue to be given textbooks for their use in the foreseeable future.



*The rebuild of Florence and the recreation center is a negative impact on our small neighborhood. Our little park – in its current location – is the only gem of our neighborhood. Not once has there been a community meeting so the taxpayers of that neighborhood have not only knowledge but input regarding this major change.

Although the rebuild of Florence Elementary is a project the district expects to be included in the 2015 bond package, the project currently does not have a proposed timeline or specific building plan. The district anticipates utilizing a land swap with the city to build the new campus on the existing park site. Once the new school opens, the old building would be demolished, and the city park would be relocated to the former school site. Mesquite ISD has used this land swap practice at several campuses in the past because it allows the new campus to be built faster and causes the least amount of disruption to the existing campus during the new construction. Overall, the surrounding neighborhood will benefit from a brand new school building to serve the current and future students who live there, and a beautiful new park would be available for all the residents to use. Input from the surrounding neighborhood could be sought when the project nears a start date the ensure that all concerns are considered in the planning process.



*Your materials reference fine arts equipment and band instruments. Does the bond program support orchestra (strings) activities in any way?

Yes, bond funds are used to purchase the larger string instruments that would be impossible for students to purchase on their own.



*Will we get a new school (Florence Elementary)?

While Mesquite ISD cannot guarantee that any particular project will be included in the 2015 bond package, at this time, the district does anticipate a rebuild of Florence elementary using funds from the 2015 bond package if it is approved by voters. When the school was built in 1965, it had fewer than 400 students; now, the campus has 625 students enrolled. It also has only one set of restrooms for all students to use.



*When will the decision be made (Florence Elementary)?

The 2015 bond package is designed to fund projects over the next five years. Decisions about project order or timelines will be based on a number of factors, such as anticipated enrollment and all needs within the district. Currently, the Florence rebuild is considered to be among the highest priorities for the district, but we do not have a projected time frame or project scope at this time.



*Can Florence get a nice fish aquarium across from the office near the front door?

Plans have not been created for the new Florence campus, but aquariums are generally not included in the design of a school.



*Can Florence be expanded?

Because the building is 50 years old, it is more cost effective over the long term to rebuild rather than renovate or add on to the school. The new building will be larger to accommodate more students, and it would include modern technology and features that are not possible to achieve with the existing building.



*If the bond package is approved, when will it take effect and reconstruction start (Florence)?

The bond program is designed to cover costs over the next five years, and there is no timeline now for the order or the time frame of the proposed projects. If approved, the first bonds from the 2015 bond package would likely be sold in 2016.