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Consultants outline $10 million bond scenario, say levy impact could be zero
Summary
Baker Tilly municipal advisor Lacy Johnson presented a $10 million, 20-year bond scenario for Wes-Del, estimating roughly $6.9 million in interest at modeled 5% rates but noting current market rates could be lower; she said modeling holds the levy flat while acknowledging assessed-value uncertainty could raise tax rates.
Baker Tilly municipal advisor Lacy Johnson told the Wes-Del Community Schools board the district has the capacity to consider new debt and presented a $10 million bond scenario that would fund wastewater repairs and other facility projects, while emphasizing choices that could limit rate increases.
Johnson summarized the districts current outstanding debt, pointed to scheduled drops in debt service in the late 2020s and 203435, and said those retirements create headroom for new borrowing. For modeling purposes Baker Tilly showed a $10 million issuance over 20 years (19 years, three months is the modeled term), and estimated interest expense of about $6.9 million at a 5% assumed rate. "We're estimating that an increase to your debt service levy to be zero," Johnson said, explaining the modeling held the levy level constant and shifted assumptions around assessed value and levy focus rather than tax rate.
Johnson advised trustees that assessed values could decline under SCA 1 legislative changes and warned that a falling assessed value would produce an inverse effect on tax rate even if levy dollars were held constant: "If assessed value goes down, your tax rate would go up," she said. She also noted that districts can choose levy-focused strategies rather than rate-focused strategies to retain more predictable revenue.
Trustees asked about refunding older bonds, the possibility of issuing less than the modeled maximum and the administrative steps that follow a preliminary determination (petition/remonstrance and, if necessary, referendum). Johnson said callable bonds should be monitored for refunding opportunities and offered to send the board a list of specific call dates for the districts prior issuances.
Johnson identified two primary project cost drivers: a wastewater project estimated at about $5.2 million and additional facility study items that could expand total needs. She recommended the board consider a maximum preliminary determination while retaining flexibility to issue less or target specific projects.
The board did not take a bond vote tonight; Johnson will provide follow-up information on refunding opportunities and the presentation slides for board review.
