Weaver bond would be pricey, lengthy

jnsbranti@modbee.comOctober 12, 2012 

— Merced's voters have been provided inaccurate and misleading information about how long it would take to payoff the bond debt being proposed by the Weaver Union School District.

The 1,800-student elementary district wants voters to approve a $9 million school bond, Measure G, on the Nov. 6 ballot.

The impartial analysis of Measure G printed in the voters' sample ballot says the bond would be repaid by collecting extra property taxes "commencing July 1, 2014, and ending on June 30, 2026."

That's wrong.

Rather than paying off the proposed school bond in 12 years, The Modesto Bee and Merced Sun-Star have learned that Weaver actually plans to collect extra taxes for 42 years -- 2012 through 2055 -- if Measure G passes.

By the time all the taxes are collected, borrowing $9 million for Weaver would cost taxpayers more than $23 million to repay.

But that specific financial data hasn't been provided to voters. Instead, the school district and Measure G's promoters have been telling voters the bond -- for various campus construction projects -- would raise property taxes by just $30 a year per $100,000 of assessed value.

"For the price of one trip to Starbucks per month, the district can revitalize the middle school campus and reduce the overcrowded school sites to prepare for our future," Weaver's Superintendent John Curry wrote in a statement about Measure G, which is posted prominently on the district's Web site.

How long the bond would take Weaver property owners to pay off is never mentioned in Curry's statement, the district's bond "fact sheet," the full text of the ballot measure or the arguments in favor of the bond printed in the sample ballot.

As of Friday afternoon, the only publicly accessible explanation of how many years property owners would be obligated to pay extra taxes if Measure G passes was the 12 years mentioned in the sample ballot's impartial analysis.

Mistake acknowledged

"I'm surprised nobody caught that," said Richard Flores, Merced County's assistant county counsel, after the discrepancy was pointed out. Flores acknowledged the mistake, noting he was the one who prepared the analysis for County Counsel James Fincher.

Because voters were given the wrong information, Flores said Friday that Merced County's elections office will send out a corrected impartial analysis to the registered voters of the Weaver district. The new version will show the extra taxes being charged through 2055.

Until a reporter sent it to him, Flores said he had never received Weaver's spreadsheet detailing exactly how long the bond would take to repay or how much it ultimately would cost taxpayers.

That spreadsheet hasn't been widely distributed. Curry was asked on Wednesday for more financial information about Measure G because the estimated tax rate didn't sound high enough to repay the bond in 12 years. The spreadsheet wasn't made available until Friday.

The breakdown reveals that Weaver actually is planning to sell four school bonds during the next 14 years and borrow a total of $9 million. Rather than asking for voter permission before selling each bond, the district is seeking authorization now for all that debt.

Determining how much loans will cost or properties will be worth 14 years from now, however, requires a lot of estimating.

So the bond advisors -- who only will get paid if Measure G passes -- have assumed that property values in the Weaver district will climb at a steady pace of 4 percent per year for the next 42 years. That would end up making Merced property worth five-times more in 2055 than it is today.

Based on that optimistic prediction, the bond advisors calculated Measure G tax rate of $30 per year per $100,000 of assessed value. So a home worth $100,000 today would have to pay $30 a year in school bond taxes now, but they figure that same home would be worth $500,000 in 2055, so it would be billed $150 for Weaver's debt that year.

If it turns out the bond advisors were wrong and property values don't soar as they expect, the tax rate would have to increase to make up the difference.

That's because Weaver's debt payments also would go up five-fold. While Weaver only would need to collect enough extra taxes to pay $228,233 in bond debt next year, it expects that bill to rise to $1,159,761 in 2055.

Curry said on Friday afternoon that he soon would post "an honest statement" on the district's Web site about the actual cost of Measure G and how long those $9 million in bonds would take to repay.

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