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School Bond: Assessment questioned

Wasco County Assessor Jill Amery sent out a press release last week to explain how passage of a measure to fund new schools would affect property taxes, but her description is being disputed by school officials and supporters of the bond levy.

Amery’s account of how Measure 33-98 would play out is refuted by Randy Anderson, chief financial officer for North Wasco County School District 21, and Dr. Analene Pentopolous, chair of the Strong Community Schools committee, proponents of the bond.

Amery used bold print to emphasize the words “no guarantee or control” in reference to the amount people would pay on bonded indebtedness, but said she was not making a political statement, nor was she in opposition to the measure.

An elected official is allowed by Oregon law to make political statements on issues, but staff time and agency resources cannot be used to circulate that viewpoint.

Amery sent her statement out on county letterhead but said it was informational only, which is allowed by law.

“Wherever I go, I’m getting a million questions,” she said.

“It’s just important for people to get the answers they need. There is a lot of misinformation out there and people need the facts, so their questions are answered.

“I’m not taking a stand, it doesn’t mean I’m not for kids or against the schools — I think we need new schools.”

In a written rebuttal, Pentopolous said: “Based on our understanding of the bond structure, we are confident that the school district will be able to keep its commitment to keep bond rates level at an estimated $2.99 per $1,000 of assessed value or below,

“We feel the risk is significantly overstated in the assessor’s statement and would welcome the opportunity to help others gain a better understanding.”

Pentopolous stated that, during two recessions, the tax rate for the middle school did not increase by more than 6 cents and never above the estimate in the ballot measure.

“This bond is our best opportunity to prepare for the education needs of our children and our community for generations to come,” she wrote.

“It provides for the construction of four new schools at an annual tax rate of not much more than we paid for one school 20 years ago.”

Voters are being asked in the Nov. 6 election to weigh in on a bond levy for replacement of the high school and three elementary schools, plus improvements to other facilities and paying off $4.3 million of debt for capital improvements.

The price to accomplish all this is $235 million, an amount funded by issuance of a series of bonds, each with a 30-year repayment, for a total of 50 years of payments.

Because former District 12 taxpayers, who make up more than two-thirds of D21 taxpayers, are still paying $1.65 per $1,000 for the bond to build the middle school — it retires in 2020 — their net tax increase will be $1.34.

District 9 taxpayers not covering the cost of the middle school bond will pay up to the full $2.99 per $1,000.

Amery contends the rate could be higher if the market value of properties dropped during a recession.

“The impact of this methodology is that the amount you will pay for a bond is variable and cannot be guaranteed,” she wrote in the Oct. 11 press release.

“It will change as a result of changes in the economy, housing market, interest rate, bond market and many other factors.”

Amery then noted that “If the assessed values drop, it will take a higher bond levy rate to repay the annual bond.”

Anderson and Pentopolous strongly disagree with Amery’s assertion that there are no checks and balances in place to prevent voters from paying more than the proposed rate.

Anderson said the amount of the levy is sufficient to cover scheduled payments of principal and interest on outstanding bonds.

“While we agree that there is no guarantee over the rate, we dispute the assertion that there is no control over the rate,” he stated in a written response.

Anderson said key factors can be controlled, such as reducing bond amounts if needed, to lower the amounts required for repayment.

“At the time we issue bonds, we lock in the rate and know how much debt service will be for the life of the bond,” he said.

If there is a sudden tax slump, he said bond sales can be delayed. A bond oversight committee will be tasked with monitoring and advising on these issues based on circumstances at the time of bond issue.

Anderson also disagreed with Amery’s statement that there were “many other factors to tax rates.”

When bonds are sold in financial markets, he said they are structured to be repaid on a “level levy” basis, meaning that the scheduled repayment of principal and interest of each individual bond is fixed and determined.

He said, historically, estimates of assessed value growth have proven to be conservative, resulting in a debt service that declines over time rather than being level.

As an example, Anderson said the tax rate levied to service the current middle school bonds has declined from $2.15 per $1,000 in 2003-04 to $1.65 per $1,000 in 2017-18.

To change the projected tax rate by even one cent would require the annual growth in assessed value to be just 2.2 percent, lower than any annual increase during the life of the middle school bonds, he said.

Amery noted that bonds are outside the Measure 5 limitation that caps property taxes for general government at $10 per $1,000 of assessed value and education at $5.

“If a property’s tax calculated for education caps at $5, you would pay the bond levy in addition to the $5 cap,” she stated.

Anderson said, if M33-98 passes, the first series of bonds would be issued in 2019 and the first property tax collected to service that repayment would be in November of 2019. He said the estimated first year property tax rate is $1.34 per $1,000 based on an estimated 3 percent increase in taxable assessed value.

“The annual increase in assessed value for that year would have to fall to 2.2 per cent (lower than any annual increase during the life of the middle school bonds) in order to increase the projected tax rate by $0.01 per $1,000,” he said.

Amery also advises that people using the tax calculator on the website,, “take notice” if they are in the tax code area that already pays the current D12 bond because it shows only the additional new amount.

“To understand the full tax burden, you will need to add the amount you currently pay to the calculator amount to come up with the full amount you will pay for the new bond,” she wrote.

Anderson wrote that the tax calculator was designed to estimate the total property taxes (before discount) with a total rate of $2.99 per $1,000 for repayment.

“The calculator also shows the amount of tax change, which is what most people usually want to know,” he wrote.

The bottom line, said Pentopolous, is that the bond provides safe and modern educational facilities for area youth. And better schools help with economic development, because businesses are attracted to areas with schools that are set up to train a skilled workforce.


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