Those darn back loaded bonds.

I have heard several people in the last few weeks talk about the  ‘ back-loaded bonds.’      I think we all notice that our tax bill goes up every year.    Sad news it will continue to go up.

It’s not that the school board does not make cuts.  It does.  It has made quite a few over the last several years.  Painful cuts.    But because of these bonds and things have not worked out like the board had wanted and needed in terms of continued growth both residential and commercial the bonds are really quite costly.    Bill Connors posted on the Evansville Observer about these bonds several years ago.   He states it in a very clear way.  Very understandable.

Sunday, July 22, 2007

Nostalgia: September 2005: On “Backloaded Bonds”—-Classic Mr. Connors

Re:Bill Connors writes: School District Debt Service Heavily Back Loaded; Reflection on the Growth bicycle; or What mix and rate of Growth is right?

— billconnors wrote:

———————————
Managing growth is essential. But it would not be
prudent to constrain growth too much. The school
district’s debt service for 2005-06 is $1.98 million.
In 2014-15, the school district’s debt service will
exceed $3 million, even if no additional debt is
issued between now and then. In 2020-21, the last
year of payment on the bonds for the new high school,
the school district’s debt service will exceed $4
million. The school district heavily back-loaded the
repayment schedule on the bonds for the new high
school, which means they are counting on large
increases in the school district’s property tax base
through new construction to be able to pay for the
escalating debt service costs.

This appears to be prudent financial planning on the
part of the school district, but I wonder how many
people are aware that continued growth is essential to
keeping the school district’s mill rate in line.

Of course, we could get away with fewer new houses in
the school district if we had more commercial or
industrial development or a greater proportion of the
new houses were larger and more expansive, and fewer
new houses would save on operating costs for the
school district.

Bill Connors
Evansville City Administrator

—
Posted by billconnors to Evansville Observer at

So when you hear certain perspective board members ‘claim’ they are going to fight against cuts both program and employee cuts they are LYING or not educated enough on the issues the board is facing.  Which if that is the case , they need to keep their mouths shut.   Because the school board is in such a position with its budget there will be cuts.   The board’s budget consists of over 80% goes to staff salary and benefits.    That is just huge.   

Come to a board meeting and listen to the current board members struggle with cuts that need to be made.   THERE is no money.   So for a perspective board member to try to state they can do better is absolute crap. 

Really what needs to happen is the current school board needs to stand strong and make the cuts they need to make to balance the budget.   Everyone knows they are not happy about it, but its the hand they have been given.    It’s not going to be less painful to make these cuts by dragging it out.

These staff need to know what would you rather have cut some benefits which you can and will adapt to ( the rest of us have.) or have them cut more positions trying to make up for the money they lost by not cutting benefits.  You are not going to get it both ways.   Really everything is on the table to look at cuts.   But the best people to make those choices is clearly those on the board.   But the private sector has lived with job cuts, hour cuts, benefits cuts for years.  Yet teacher’s, staff and programs some thought they were untouchable.

The world is just not rocking that way.

http://evansvilleobserver.blogspot.com/2007/07/nostalgia-september-2005-on-backloaded.html