School bond: Bond plan too costly
July 3, 2008 · Updated 9:41 PM
The article by Marci Miller in the News-Times on Jan. 22 pointed out what I believe to be a glaring flaw in the way the Oak Harbor School Board and its superintendent plan to finance the high school renovation.
As the chart in her article shows, most of the bonds will not be paid off until after 2013. As most of us should know, the longer we wait to pay off a debt the more total interest we will pay. According to the district's own figures this bond issue, structured as proposed, will cost the tax payers over $77 million. Anyone with a financial calculator can figure that a $45 million dollar loan at 5 percent (about an average of the district's figures) paid off at an even rate for 16 years would cost a little over $66 million. This is more than a $10 million difference. This represents about $1,000 for a home valued at $200,000.
I believe the board and the superintendent are being irresponsible in proposing such a plan. We could finance this project with a larger mil levy now (maybe 1.8 mils) then after 2013, when other bonds are paid off, our overall tax levy would decrease. This would decrease the overall tax burden and perhaps have leeway for future projects. Or, is the board going to tell us that no new tax levy projects will be needed until 2019.
I support education and the renovation of the high school (although, I question subsidizing sports and entertainment projects). But, I will not support a plan that would waste $10 million dollars of the taxpayers' money. I suggest the board and superintendent act responsibly and set up a financing plan that would be less expensive in the long run even though the cost may seem greater now. Perhaps with a savings of $10 million in interest we could actually afford a new sports and entertainment complex.