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Voters Approved a November 2021 bond election for $31,550,000 in unlimited tax bonds. Such Bonds would be issued over then next 15 to 20 years depending on when specific improvements to the waterworks and wastewater treatment system (the “System”) are required in order to repair or replace existing facilities. The Bonds, as each portion is sold, would be paid by annual ad valorem taxes assessed against all taxable property within the District
Why Do We Need the Bonds?
Most of the districts infrastructure was built in the early 1960's and is reaching the end of its useable lifespan. Many of the valves and lines on our system are reaching a critical point, When there is an issue, we will not be able to isolate it to one street. Widespread outages may occur during a breakage. The District has developed a strategic plan to tackle these issues which can be seen by Clicking Here
Effect of the Bond Sale
As indicated above, the Board’s principal job is to efficiently maintain and operate the System. As repairs, replacements and renovations are required, a portion of the voted Bonds would be issued. Over the last decade, the growth in the District’s taxable values has been sufficient to offset any significant change in tax rates after issuance of additional debt. While the pace and amount of future growth cannot be assured, the Board of Directors continues to encourage continued commercial and residential development within the District.
In order to predict the effect of issuance of the $31,550,000 bonds upon the tax rates, certain assumptions have to be made. Assuming we maintain 3.5% annual growth over only the next seven years (and the actual growth over the last ten years exceeded 12%) and we sell the $31,550,000 bonds in five bond sales over the next fifteen years at current bond market rates, the annual tax rate could increase from the current $0.7476 by 2 cents. This equates to $20 per $100,000 taxable value of homes.
If the election fails to pass, the Board retains the responsibility of maintaining and operating the System through repairs, replacements and renovations as needed. The only option to raise the necessary funds would be through issuance of revenue bonds, which while not requiring an election, are not as well received in the marketplace and require as slightly higher interest rate when sold. Moreover, instead of pledging the taxes to payment of the Bonds, the District would be pledging the net revenues of the System to payment of the revenue bonds. Since most of the high taxable value taxpayers are commercial entities whose water and sewer bills are a small percentage of their tax bills, the burden of revenue bonds fall disproportionately upon the homeowner. Full issuance of $31,550,000 over the next fifteen years as revenue bonds would require an increase of from approximately $20 per month within the next five years to an increase of approximately $120 per month within 20 years.
Tax Rate History
The District works hard to be good stewards of taxpayer funding and has worked to lower the overall tax rate. since 2014 the district has been able to lower the overall tax rate by just over .5 cents per $100 valuation. With the new bond we plan to maintain the current tax rate and refinance our current bonds to reduce interest and the overall total debt on the district.
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