September 6, 2006
Realtors meet with superintendent

Two entities that are intrinsically linked—the school district and the people who help families locate in houses near the schools—shared information on Wednesday morning, the start of what promises to be a long-term relationship.

Dr. Kirk London, Superintendent of Hays CISD, told a group of about 25 real estate agents that he anticipated an increase in enrollment from last year to this year, though he wasn’t exactly prepared for such drama.

“We knew (the growth) was going to get here, we just didn’t know it would get here that fast,” he said. “I anticipated an increase of about 1,000 students by the peak time in March (2007). We surpassed that on the first day of school.”

Enrollment in Hays CISD is nearing 12,000 students, he noted, with an increase of 1,500 students over last year “a very real possibility.” Enrollment growth is predominately—about 80 percent—at the elementary school age.

Three new schools opened in August, he said, and the tax impact of the bond package in 2004 that provided for them wound up being about half of what was projected.

“We projected an increase of 12 cents on the tax rate over three years,” he said. “But with a favorable bond market and growth in the tax base, that bond will wind up costing the taxpayers less than half of that.”

The three new schools—two elementary and one middle—alleviated much of the crowding, however, that respite will be brief, he said.

“We’re in good shape this year and we’ll be in good shape much of next year,” he said. “We’re growing by 1,500 students a year and it takes a minimum of two years to build an elementary school from the time the School Board calls an election to when the doors open.”

For the first time in the district’s 40-year history, a bond proposal—headed to voters on November 7—will have no tax impact because of growth in the tax base, he said. The $46.3 million proposal includes two new elementary schools.

“Growth in the tax base has kept up with the growth in the number of students,” he said.

Even though there is no tax impact, a bond package must be voted on, according to state law, Dr. London responded to a question from the group, adding that building facilities is critical to addressing the challenges of enrollment growth.

“We have to stay ahead or we’ll be building portables and busing kiddos all over the district.”

When a student moves into a home, but the neighborhood school is full at the student’s grade level, the district must bus that student to the nearest school that has an opening at his/her grade level, he illustrated. That is already occurring at some of the elementary schools.

Last year, Hays CISD ranked 4^th fastest growing district in Texas, and Dr. London said that with the enrollment growth so far, he wouldn’t be surprised if the district edges past one or two of the Top 3.

“There are more housing units projected now than any time since I’ve been here,” he said. “And a lot of the large subdivisions—those with more than 2,000 homes—have not even come on board yet.”

The proposed bond package includes two elementary schools, one to be located in the Blanco Vista residential development in the southern portion of the district, and one to be either in the Trails of Camino Real or Sunfield residential development, whichever comes on-line first. Other components of the bond package include purchase of new buses, new technology, improvements to existing campuses, purchase of land and infrastructure for future sites, and repair of Buda Elementary School.

The breakfast was sponsored by Tandis Homes, developer of Bunton Creek Village, located east of Lehman High School near Goforth Road.

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The Hays CISD Board of Trustees on Tuesday unanimously called a $46.3 million bond election for November 7 in a continuing drive to address near double-digit enrollment growth. For the first time in the district’s history, the referendum carries no tax impact.

“For the past how ever many bond issues I’ve been involved with—either as a community member or a member of the School Board—the major question we get from the public is ‘Why isn’t growth paying for the new schools?’” said Chip DuPont, President of the Hays CISD Board of Trustees. “Fortunately that question has been answered. It’s here.”

Joe Muńoz, Secretary of the School Board, could not attend the meeting on Tuesday as he was in Mexico representing his employer, the Austin Police Department.

However, by telephone interview, Muńoz endorsed the bond package.

“This will be the fourth bond referendum since I joined the School Board,” he said. “I support it as I have supported the other three because I know it is the right thing to do for our students to address the district’s unprecedented growth.”

The bond package proposal includes two new elementary schools, new buses, new technology and future land purchases and is based on enrollment growth projections and facilities needs.

The proposed package to be considered includes:

• An elementary school, estimated to cost $15.2 million, to be located in the Blanco Vista residential development;

• An elementary school, estimated to cost $15.8 million, to be located in the Trails of Camino Real or Sunfield residential development (the location will depend which subdivision comes on-line first);

• Improvements to existing campuses, estimated to cost $5 million;

• Purchase of new buses, estimated to cost $3.6 million;

• Purchase of new technology, estimated to cost $1 million;

• Purchase of land and infrastructure, estimated to cost $2 million; and

• Repair of Buda Elementary School, estimated to cost $3.6 million.

Carter Scherff, Hays CISD Chief Financial Officer, put to rest an issue regarding renovating Buda Elementary School early in the Board’s discussion about the bond package.

“In March, the district requested a topographical survey on the Buda Elementary site, and we received the results last week,” he told the School Board. “Based on the expense the site preparation would require, administration has decided to remove that option from consideration.”

Ralph Pfluger, a member of the School Board, agreed with the recommendation to repair Buda Elementary rather than build a two-story campus on the lower campus, as originally proposed.

“I am acceptable to that,” he said. “I am still concerned that students in that portion of the district have the facilities equal to Science Hall or any other campus we’re building. If it’s technology that needs to be put in, I want to see it.”

As a result, the School Board added $400,000 to the administration’s bond package recommendation, purely for Buda Elementary.

“We’ll make sure we do everything possible to give them a comparable campus,” said Dr. Kirk London, Superintendent of Hays CISD. “We’ll spend our money wisely. At some point, that upper campus is going to become not usable for students and the best thing might be looking for another site in Buda.”

The zero tax impact on this bond package is the result of several factors.

“The way the district has managed its debt position will allow you to cost-effectively issue 2006 bonds, said Bill Gumbert with RBC Capital Markets, the district’s financial advisor. “Based upon conservative assumptions, there is no need for a tax increase.”

The bonds will be amortized over 25 years. The tax rate impact analysis does not include any state funding for the bonds, assumes an interest rate of 4.75 percent, and average tax base growth of 11.4 percent for only five years.

“We’ve designed it so we’re not counting on growth beyond the next five years to pay for the 2006 bond program,” he said. Preliminary taxable values for the school district are up 15.2 percent this year from last year.

DuPont emphasized that the funding for buses and technology would be shorter term than the 25-year funding for the new schools. For example, the buses would be amortized over 10 years and the buses carry a 15-year life cycle.

Gumbert noted that the payout of the 2004 bond package wound up being a little less than half of what was projected. The tax impact of the $86.9 million bond package is expected to be 6.8 cents less than the 12.8-cent projection. Gumbert attributed the lower rate to four factors: interest rates were favorable at the times of the bond sales; a refunding effort saved the district about $12 million; each bond issue received state funding totaling about 35 percent of the bond; and growth in the Hays CISD tax base.

“We feel very fortunate to be able to pay for the 2006 bond, the 2004 bond, give our employees a raise and still have a reduction in the tax rate,” Dr. London said.

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