Frequently Asked Questions About the $65 Million School Bond Referendum

On Sept. 13 voters will be asked if they would support a plan to build three new elementary schools, reopen Roosevelt Elementary and make renovations to and . The District has prepared a School Bond Referendum Frequently Asked Questions document that follows below, starting with the ballot language.

“Shall the Board of Directors of the Ames Community Schools in the County of Story, State of Iowa, be authorized to contract indebtedness and issue General Obligation Bonds in an amount not to exceed $65,000,000 to provide funds to build, furnish, and equip elementary school buildings and improve the sites therefore at the District property on 24th Street, the current Meeker Elementary site, and District property on Miller Avenue; and to reconstruct, repair, improve, remodel, furnish and equip the Mitchell, Roosevelt and Sawyer elementary buildings and sites?”

What will happen if the bond issue passes?

If the referendum passes, the District will work toward implementing the facilities improvements listed in the referendum question. Every project will be done. The law requires that all projects must be completed as described in the referendum approved by the voters.

What will happen if voters turn down the bond referendum?

Iowa law dictates that if a bond referendum is voted down, another referendum, which incorporates any portion of the defeated referendum, cannot be brought to the public for vote for at least six months. The next special election date available to school districts at least six months after September 13, is April 3, 2012.

If the referendum passes, how much will my property taxes increase and how will the debt be repaid?

(Information provided by Piper Jaffray Co.)

The District estimates the tax rate will increase by $1.91 per $1,000 of taxable valuation, less .35 per $1,000 of taxable valuation currently being levied for the final year on outstanding bonds. These bonds will be paid off at the end of the current fiscal year. The result is an estimated net tax levy rate of $1.56 per $1,000 of taxable valuation. This increase would be first paid by property taxpayers in the District with the September, 2012 tax bill, and continue thereafter until the Bonds retire, approximately 20 years. This assumes 1 year at 2 percent growth in assessed valuation. The property tax increase is an estimate. Interest cost on the bonds is a critical component to determining the overall property tax rate, and the District cannot sell the Bonds (and lock in the interest rates) until after the referendum passes. Even then, there are various IRS rules and State of Iowa rules that the District must comply with such that at least some of the bonds are not likely to be sold right a way. In calculating the tax rate, the District has assumed that bonds would be sold in 2012, 2014 and 2015, at interest rates of 4.25 percent, 5.25 percent and 6.25 percent, respectively. Current market interest rates are around 3.5 percent for bonds similar to those discussed herein, so the District has intentionally overstated its expected interest cost in calculating the tax implications in an attempt to be exceedingly cautious. If the District is able to sell the bonds at lower rates, this reduction in interest cost will flow through to the voters in the form of lower overall tax levy associated with the Bonds.The District intends to use a combination of property taxes and SILO funding to repay the bonds. The Bonds are ultimately secured by a property tax sufficient to retire all of the Bonds, however, the District intends to use approximately $1,000,000 of SILO revenues annually to reduce the tax levy associated with the Bonds. This intent is not a binding commitment and not part of this ballot proposition, rather, a statement of intent by the current Board. Future boards could choose to use the SILO tax in other ways, thus causing the tax rate to increase due to the fact that the SILO funds would no longer be available to be used to lower the tax levy associated with the Bonds. If the District were unable to use any SILO to help lower the debt levy, the property tax levy would increase by 48 cents per $1,000 of assessed valuation, to a maximum levy increase of $2.38 per $1,000 oftaxable valuation under the current assumptions. Estimates of property taxes for additional assessed valuation levels may be found at the Ames CommunitySchool District website, www.ames.k12.ia.us under School Board, Facilities Documents, “Tax impact of the G.O. Bond Referendum”.

Why are so many building projects proposed all at once?

Many of our elementary schools are past their useful life and will require extensive repairs or renovations for continued use. Details concerning the facilities and anticipated repair needs are outlined in the report entitled “Report on Condition of the District Facilities” prepared by Gerry Peters, Director of Facilities Planning and Management. This report may be viewed at the Ames Community School District website, www.ames.k12.ia.us under School Board, Facilities Documents, 11-08-10. Additional space will allow for flexibility in programming and enrollment at different grade levels within schoolboundary areas. This reflects the fact that education needs have changed since our schools were built. Many classrooms previously used for general education are now used for special programming such as special education, English language learners, Title I reading, and other programs that did not exist in previous generations.

If the referendum passes, what will happen to Fellows and Edwards Elementary schools?

Both schools will be taken out of service. The Board will determine whether to sell the properties or reuse them for another District purpose.

To read more about the bond, check out the file posted to the right.

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