A recent op-ed on Decaturish by Former Atlanta COO and Decatur resident Hans Utz recently got some appreciation in FFAF regarding its explanation of the city’s debt cap.  As such, it seemed a good article to highlight and discuss here, since we so enjoy discussions that involve such thrilling topics as debt and enrollment figures.

In short, it helps spell out…

• Why city debt is necessary – to spread the cost of projects out over time so future residents also get to pay in
• The different forms of Decatur’s debt
  • The city’s revenue bonds – taken out against non-property tax forms of revenue
  • CSD’s certificates of participation – “like a homeowner taking out a second mortgage”
  • “GO bonds” – which are borrowed against property taxes
• Which forms of debt apply to the “Constitutional Debt Cap” of $137 million – only the Go Bonds
• Where Decatur would stand if it were to borrow the full $82 million in Go Bonds to build new/larger schools
  • Watch these mathrobatics – The city currently has borrowed $31 million and CSD has borrowed $5 million in Go Bonds, so add the requested $82+ the current $36 = $118 million.  And what was that limit again?  $137 million?  So $137 – $118 = $19 million!

Is that $19 million gap risky?  Mr. Utz’s states…

Incidentally, the constitutional debt limit is itself a conservative ceiling meant to prevent fiscally weak or irresponsible municipalities from overextending themselves.  Decatur is neither.

Ultimately, Mr. Utz’s argues that Decatur shouldn’t be all that worried about its debt cap with this bond proposal and that the major concern should be the very real increase to taxes as a result of the bond – he calculates it as a 7% increase on Decatur property taxes.

He concludes…

So are we in a bad place with debt?  No, not at all.  Not even a little bit.  Not even if the schools do get an additional $82 million in capital.  We should stay vigilant, of course, but we are operating well within our capacity.

The question is whether we think the schools need the capital sufficiently enough for us to willingly to increase our overall property tax by 7 percent.  That is a big conversation that we must have as a community.

Oh how nice it would be if we still had the old Ponce de Leon School on West Ponce.  (Hence the random-ish Ponce de Leon School photo courtesy of Ponce de Leon Elementary Facebook page  )

There have been whispers over on the AJC of late about the number of trailers/learning cottages/modular classrooms coming to the City of Decatur school system in the coming year.

Welp, there’s an item on the Decatur School Board agenda for its March meeting, “Move to approve System Wide Modular Mfg. Construction Management/Design Build Services 2015-2015 School Year Contract”, which officially recommends placement of trailers next year…

• Decatur High School – 6 new, 4 existing for a total of 10
• Renfroe Middle School – 12 new
• Elementary – 8 new (split between Winnona Park and Glennwood)

CSD staff recommends a $240,590 contract for set up and installation and a 36 month lease agreement not to exceed roughly $25,000/month.

Photo of Oakhurst Elementary trailers courtesy of Amanda

Every two years, the City of Decatur works with the National Research Center to send out a Citizen Survey to over 1,000 randomly selected list of residents and asks them a number of questions.  The survey asks residents for their opinions on everything from city services, to how safe residents feel, how often they use the DeKalb Library or how often ride a bus.

You get the the picture.  It runs the gamut.  That includes questions about your household.

And here’s one very apt question – considering the city’s school enrollment drama – that the city has asked since the survey’s inception in 2006 – “Do any children 17 or under live in your household?”

We’ve charted the percentage of households that answered “Yes” to that question each time the survey has been conducted above.

As you can see quite clearly, the slight over-index of the 17-and-under crowd in 2006 to the current national average has become a giant advantage in 2014, with a cool 41% of households in the City of Decatur answering “Yes” to that question.

It should be noted that the resident majority still favors the childless household – an important consideration for the School Board and City Commission if they decide to put an $82 million bond referendum for all city residents to vote on in November.

And before anyone brings up the accuracy of a the survey, the confidence level is “plus or minus five percentage points around any given percent reported for the entire sample.”  So yes, technically, the child population could be flat from 2012 to 2014, but that’s pretty unlikely.  The upward trend is certainly real, as well as the fact that Decatur far outperforms the national average when it comes to households with kids.

You can view all the detailed data from Decatur’s 2014 Citizen Survey HERE.

*2013 National average estimate taken from US Census

At tonight’s Decatur City Commission meeting, Superintendent Phyllis Edwards will give an “information briefing” on the school system’s request for an $82 million bond project that would pay for the further expansion of school system facilities to accommodate growing enrollment.  More on that HERE.

The information briefing will occur during a 6:30p work session.  Prior to the work session, the city will host the school board and CSD staff at a 5:45p dinner session.

Photo courtesy of Panoramio

From CSD….

City Schools of Decatur will be closed Thursday, February 26, for the safety of our students and staff due to potential icy conditions. All employees who work 225 days or more should report at 11 am if conditions are safe for travel.

Atlanta and DeKalb are also closed on Thursday.

Just in from City Schools of Decatur…

CSD Administration has been following the National Weather Service forecasts closely. Models are predicting potential icy conditions on the roads in the morning and possible snow accumulation in the early afternoon. Our primary concern is to make sure that all students and staff are able to travel safely to and from school. Therefore, City Schools of Decatur will be closed Wednesday, February 25^th.

Atlanta Public Schools and DeKalb County Schools are also closed.

UPDATE: Decaturish’s recap of last night’s school board special session is now live.  Check it out here.

Dan’s report includes many additional important points that came up last night.

The value of the mill in the previous analysis was incorrect

Dianne McNabb, with CSD adviser Public Financial Management, said those projections were based on incorrect information.

“We got the new data on the value of a mill,” McNabb said. “That amount was higher than the one we were working with.”

Previously presented debt limit data wasn’t quite right.

According to Decaturish’s report, Urban Redevelopment bonds don’t count against the city’s debt limit.  That wasn’t taken into account when we discussed the debt limit last time.

With those caveats in mind, McNabb said the city’s limit is $141.5 million, based on property values from 2014. The outstanding debt as of Jan. 1, 2016, as it applies to the debt limit, will be $36.7 million. That will leave the city with a debt capacity of $104.8 million. If the voters approve issuing an $82.8 million bond, the city would only be able to borrow $22 million for projects, according to McNabb’s figures.

More meetings.  Public forums.  Resident polling.

Board members said there will be two joint meetings between board members and city commissioners, one in March and one in April. There will also be two public presentations on the bond request. CSD also intends to poll residents before moving forward.

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OK, so we’ll use this thread to aggregate articles and comments on last night’s Decatur School Board special session to discuss the $82 million GO Bond it has requested to accommodate enrollment growth.

Longer amortization = Lower yearly tax impact

For starters, here’s an AJC blurb by Bill Banks stating that the School Board received revised tax increase projections for the $82 million bond, after extending the repayment of the loan from 20 to 25 years.

That means taxes on an $150,000 home would cost $223.24 annually, on a $300,000 home $446.48, on, a $500,000 home $744.13 and on a $700,000 home $1,041.79.

No Bond = More Portables

Additionally there’s another new post on the AJC quoting Superintendent Edwards that if the bond doesn’t pass the result is would be more portables or cutting programs.

If we don’t get it passed, then we’re either adding more portables, or we will have to cut the existing budget substantially, meaning we lose a lot of good programs already underfunded.”

We’ll be adding to this post throughout the day as we come across additional articles that include info coming out of the meeting.  Stay tuned.

Photo courtesy of Google Streetview