Falls Church Council, School Board Joint Session Compares Growth Projections
The touted joint session of the City of Falls Church School Board and City Council tonight, the informal kick-off of the new budget season leading up to the July 1, 2014 fiscal year, saw the contingent from the schools release projections for continued extraordinary growth in school enrollment over the next five to 15 years, heightening pressures for a new high school and other expansions, and a modest City revenue growth of 3.8 percent in the next year, as projected by the City’s Chief Financial Officer Richard LaCondre.
The two-hour meeting in the Media Center at Thomas Jefferson Elementary School tonight ended with an unresolved discussion about when the City might have to come back to voters to approve a referendum to construct a new high school, and whether or not it might best be done in three “tranches” of $40, $40 and $20 million.
School Board chair Susan Kearney suggested that a pathway might be found to avoid a referendum, altogether, stressing the need for overall aggressive economic development as the key to solving the matter. Vice Mayor David Snyder hailed the City’s ability to maintain small classroom sizes despite enrollment growth pressures to date, something that has not been the case for neighboring systems.
Not factored into the options batted about tonight was what kind of economic development yield might come from an aggressive economic development of 10 acres of land by the West Falls Church Metro station that will come under the City’s jurisdictional control as a result of the sale of the City’s water system to Fairfax County, a move approved overwhelmingly by City voters last week.
In a follow up to the meeting, School Board chair Kearney wrote to the News-Press, clarifying as follows:”There may be a path without a referendum based on aggressive development; but it would also be based on creative financing alternatives that go beyond finding a revenue stream and then floating a big bond with the revenue to offset. We will be evaluating both traditional and alternative funding mechanisms to identify the best way to pay for the high school.
12:38 PM
The key, and worrisome, take-away is “avoid a referendum.” If the schools are really as popular as we are being led to believe it should be a slam dunk to have a referendum. So what is the problem?
10:09 PM
Mike,
I believe a clarification may be useful.
A Referendum is required for debt issuance whose value is above 10% of City Revenues. For example if City revenues in a given year are $75 million then a Referendum would be required for any amount over $7.5 million. Clearly a debt issuance of $100 million would require a Referendum vote.
The financing of that debt is separate and distinct. Best practice would entail the City having a financing plan prepared before going to Referendum so that the citizens have a clear idea of how much the debt will cost and how it will affect tax rates. Since the debt would be issued under the “City’s name” taxpayers would be on the “hook” for repayment, period. The debt financing plan may affect the decision to seek Referendum approval and, if the decision is to go forward, the final cost of the debt issuance. It is not, however, related to the requirement for a
Referendum.
As regards “creative” alternative financing schemes please note the experience of Poway Unified School District in California where a $105 million debt issuance will result in a final cost of almost $1billion (yes $1 billion). The debt was to finance, among other things, new schools. Supporters claimed it could be done without a tax rate increase. The Unified District voters approved the deal without being told about risks and costs of the debt structure. It appears that the debt issuance was promoted by well meaning District officials who unfortunately lacked sufficient financial literacy to understand the risks and costs of the debt.
10:26 AM
its sounds like our taxes are about to increase