Approve now, let kids pay much later | Letters | Jan. 15
January 15, 2010 · 11:12 AM
When the Bainbridge Island School District promoted its 15-20 percent inflated 2009 capital construction bonds primarily to replace Wilkes Elementary, its said the bonds were “for the kids.”
The first set of bonds were sold in December 2009, and the district has made good on its word.
The school board and district management apparently saw the wisdom of having the future generation pay for a good portion of the new Wilkes school.
Not to confuse the general public with numbers, but as an example, the bond’s principal and interest payments for the first five years (2010-2014) are just under $7 million. For the last five years (2025-2029), they are just over $16 million.
This keeps current taxes relatively low, but the tradeoff is Bainbridge Island taxpayers will pay between $14 and $16 million extra interest costs (assuming next year’s $21 million bond issue will have somewhat similar terms and a 35 percent federal interest payment credit) by delaying paying off the majority of the principal until the last four years of the 20 year bonds.
Current taxpayers will see moderate tax increases, the next generation gets to carry the heaviest financial load, and by that time, the current school board and school officials will have moved on.
And did the district make any effort to explain to taxpayers about its “pass on the debt to the next generation” strategy?
No. Nor does current state law require them to divulge their proposed funding strategy.
It’s a bond transparency issue the State Legislature should require be made known to voters, and voters should then decide if delaying debt repayment until later years is worth the extra interest payment costs over the life of the bonds.