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Board studies post‑bond options: nonvoted debt, phased projects and a community survey
Summary
After a failed bond, Mercer Island School District staff reviewed long‑range facility planning, financing alternatives including nonvoted limited general obligation bonds, timing options for levies and a planned outside survey to analyze why voters rejected the bond.
Mercer Island School District administrators used a special study session to brief the board on options after the district's bond measure failed in February, reviewing the long‑range facility plan, nonvoted debt mechanics, possible phasing of projects and plans to commission an independent community survey.
Finance and facilities staff presented legal and financing background prepared with bond counsel at Foster Garvey and outside advisors. Matt, the district finance staffer, summarized legal capacity for nonvoted limited general obligation borrowing and how that tool differs from a voter‑approved bond: the district's estimated statutory nonvoted capacity was cited at roughly $79,000,000 but that borrowing would have to be repaid from the district's general fund rather than from a dedicated tax rate. "We would have to pay for this via the general fund, period," Matt said, noting the key constraint.
Board Director Deborah pushed back on the nonvoted option. "This is not a responsible viable option," she said, arguing that tapping the general fund to repay large capital debt would be risky and could undermine long‑term fiscal stability.
Staff outlined other financing and scheduling points: - Election and levy timing: staff highlighted potential timelines, including a target for renewing the district's EP&O levy on Feb. 10, 2026, and the next CapTech renewal occurring in February 2028. The district noted it cannot layer CapTech levies on top of one another and that bonds and levies have different legal payback and timing rules. - Election cost: staff estimated a single‑ballot election cost of roughly $45,000 for running a bond measure (cost varies by what other measures share the ballot). - Phasing projects: facilities staff said some parts of the high school work (for example core mechanical/electrical and HVAC) could be executed as standalone projects, while others (mass‑timber elements or multi‑purpose additions) would be more expensive or infeasible to add later. - Emergency borrowing: counsel materials described a nonvoted LGO as a tool the district could use for emergent needs but emphasized it has no dedicated revenue stream and would require the district to find repayment from existing resources, creating potential rating‑agency concerns.
The board also discussed commissioning an outside analysis of the failed bond. Staff summarized vendor outreach and proposed vendors: Strategy360 (broad Puget Sound presence), the firm used for the superintendent search (Lydia Musher), and Hanover Research. Strategy360 and others recommended a three‑part approach: a representative community survey, a retrospective quantitative election analysis using King County vote data, and focus groups to probe reasons voters said yes or no. Staff estimated the full research package at roughly $30,000.
Board members generally supported moving forward with an outside firm to analyze the vote outcome but asked staff to return with a procurement recommendation quickly; staff said they would try to have a vendor selected in June so work could begin over the summer and initial results be available in the fall. Board members discussed sequencing: several said they would not expect to launch a new bond campaign before fall 2025 and that a conservative timetable would likely push any new bond to a November election in 2026 or later.
Facilities update: separate facilities staff briefings highlighted near‑term capital work planned without a bond: interior painting at three elementaries, phased high school furniture replacement, Merriway Pool repairs and locker‑room upgrades (scheduled July–September work and a planned seven‑week pool closure), and track/field maintenance. Facilities staff said the district has achieved compliance on energy performance requirements across its buildings through prior projects.
What happens next: staff will return with a recommended survey vendor and timeline and will provide more granular cost scenarios for phased projects. No formal financing decision was made at the study session.
