Frequently Asked Questions

2018 Bond FAQs

What can bond funds be used for?

Bond funds can only be used for costs associated with items listed on the ballot, and cannot be used for general operations like school costs, staff salaries, benefits, utilities, etc.

Table Breakdown

How do bonds work? Does the district take out loans then pay it back with taxes?

The bonds offered are municipal bonds. The district offers bonds for sale and pays investors back plus interest from property taxes that are not subject to legislative limitations like Measure 5. Some of the bonds offered for sale are tax-free, which can be attractive to large investors.

When bonds are issued for sale, they are offered in packages – the whole bond package amount approved by the voters is not usually issued all at one time. The offerings are based on the construction schedule over a 6- to 8-year period. As the packages are paid off, the levy rate will fluctuate year-by-year.

How do I keep updated on the bond measure's progress?

We will be sending email blasts on occasion to provide our supporters with news about the bond. Join our mailing list by signing up here!

How often have Salem-Keizer bond measures failed?
We’re fortunate to live in a community that values and supports education with a track record of approving general obligation bonds about every 8 to 10 years. We have records on bonds that passed in 1992, 1998, and 2008. Records on bonds that did not pass are hard to find, but we understand there was a measure for technology that failed sometime the ‘90s.
Are there other sources of revenue that could fund this work? Isn’t marijuana revenue supposed to help?

The Citizens Facilities Task Force looked at all the other methods of funding available to school districts to pay for facility work, such as paying from the general fund, a construction excise tax, a local option tax levy, and a general obligation bond. The Task Force found that a general obligation bond is the only option available to the district that could raise the amount of funds needed.

As it stands today, because of the way the state’s funding for K-12 education is calculated and structured, marijuana tax revenue is not expected to significantly change the amount of money Salem-Keizer receives from the state.

Also, the total revenues received from the state through the State School Fund, which include lottery funds and marijuana taxes, are to be used for general operations, not capital construction.

What about lottery funding? Doesn’t it cover these costs?

According to the Oregon Lottery website, 57% of lottery dollars (after paying expenses and winners) is shared among four areas of education in the state. One of those four areas is the State School Fund, which is the source of operational funding for school districts in Oregon. Money received from the State School Fund goes into Salem-Keizer’s general fund, and is used to pay for costs like staff wages and benefits, utilities, supplies, etc.

Because they are included in the total funding from the state, Lottery funds aren’t given to the district as a separate check and the district can’t track them separately. However, the lottery website reports that in the 2013-15 biennium, almost $28 million in lottery grants was contributed to Salem-Keizer (https://www.oregonlottery.org/docs/default-source/good-things-by-county/2013-2015/marion). Salem-Keizer’s general fund totaled about $464 million in the 2016-17 school year.

Why isn’t lead abatement included in the bond? Portland Public Schools’ bond is addressing lead.
During the summer of 2016, Salem-Keizer Public Schools voluntarily tested all schools for lead and copper in the water. All fixtures that tested high for lead and copper were addressed at that time. You can find the test results and more information, such as the schedule for lead testing, on the district website in the Safe and Healthy Buildings Plan: http://www.salemkeizer.org/parents/safe-and-healthy-schools
To save cost on buildings, is there any standardization of design and construction?
There are best practice standards for square footage of different areas within schools, such as classrooms, cafeterias, libraries, etc. These are called education specifications.
What was the levy rate increase in 2008 when the last bond was approved?
In 2008, old debt was paid off as the new bond was passed, so the tax rate stayed the same. Levy rates typically increase and decrease over the life of a bond as debt is retired or refinanced. For example, between 2015 and 2017, the levy rate paid on the 2008 bond decreased by just over 50 cents per thousand of assessed value.
If the district can afford $700,000 to send teams to Bend, why do they need this bond?

The district cannot afford $700,000 to send teams to Bend. That calculation was used to serve a reason for the OSAA not to place SKPS in that league and was based on if SKPS did business as usual – AKA schedule the same number of contests and send as many teams, bands and cheerleaders as they would a local competition. SKPS is not only appealing the OSAA ruling, but it’s also looking at a number of cost-saving measures to minimize the financial and educational impacts should the appeal fail.

Additionally, school travel costs are paid for through the district’s general fund. The general fund is the main operating budget of the district. Bond dollars cannot go into the general fund and can only be used for capital projects.

How accurate are the population projections you used to create this plan? I’m concerned that actual enrollment growth is going to be more than projected.

It’s important to engage experts and carefully analyze potential enrollment growth. It is equally important to remember that it is impossible to predict the future with 100 percent accuracy. The experts involved in creating projections provide the best estimates possible.

To create and refine projections, the district worked with two different organizations that have expertise in population studies. Portland State University’s Population Research Center (PRC) performed an enrollment forecast in August 2016. The Oregon Legislature designated the PRC as the entity responsible for coordinating population forecasting for Oregon’s counties and cities. Members of the Citizens Facilities Task Force carefully reviewed the PRC’s methodology and results. FLO Analytics, a data analysis firm that has expertise in community planning, analyzed the PRC study and provided some refinements, particularly around West Salem population growth estimates.

Additionally, district Facilities & Planning Department staff are keeping a close eye on actual enrollments so they can identify where plans may need to be adjusted.

Why doesn’t the bond include building a new high school?

The bond package includes expanding the capacity of existing school buildings rather than building new schools. The concept resulted from the work of the Citizens Facilities Task Force and the discussion centered on high school construction. You can read about it in their recommendation to the School Board on page 2 and page 9 of the recommendation report: https://salkeiz.k12.or.us/blog/wpcontent/uploads/2017/10/Citizens_Facilities_Task_Force_Report_3-14-17_Final.pdf

In short, the Task Force found that it was more cost effective to expand current high school facilities than to build new. The estimated cost to build a new high school is around $250 million. In addition to being a more expensive option, building a new high school would not satisfy the district’s increased capacity needs, and would not address the infrastructure needs of current high schools. The Task Force also received overwhelmingly negative feedback about how the construction of a new school would force redistricting.

Why does school construction cost so much?

Today’s educational facilities require a higher level of technology infrastructure, safety features and ADA compliance than schools built decades ago. Governments also have to pay more for construction than private industry. For example, Governments are required by law to pay contractors “prevailing wage,” which means labor costs for constructing government buildings are higher than for constructing private buildings. Costs have also increased in recent years because the demand for building is high in our area, in part because of recent bond measures passed in several Oregon school districts. The cost escalation means it is more expensive to build later, so the 2018 bond is organized so that as much construction as possible takes place early in the life of the bond.

More information about prevailing wage can be found here:
http://www.oregon.gov/boli/whd/pwr/pages/index.aspx

News story about construction cost increases in Beaverton
http://portlandtribune.com/pt/9-news/295484-172268-beaverton-school-construction-budget-balloons-to760-million

Will I see a big increase in my property tax bill all at one time?

Bonds are issued in series, meaning they’re offered for sale in smaller batches over time – i.e., not all $619.7 million would be offered in the bond market at once. For example, the 2008 bond was issued in four series: three issues in 2009, and one in 2011. Because the total amount of the bond package is not taken on as debt all at once, the levy rate can vary based on the amount of debt on the books. Laddering bond sales in series helps keep the levy rate as stable as possible by “spreading it out” over time so tax payers don’t pay for the full amount of debt all at once.

On my last Tax Statement, I see two Salem-Keizer School bonds totaling a little over $1.52 per $1,000 of assessed value. Can you tell me the expiration or pay-off dates for these?

On the Marion County property tax statement, the top line shows debt from a measure approved by voters in 1992 and originally issued in 1993. A relatively small amount of this debt was refinanced at a more favorable interest rate for the taxpayer in 2013. Under the current repayment schedule, the refinanced debt from the 1992 measure will be paid off in June 2019. The second line shows debt from the 2008 bond measure approved by voters. Under the current repayment schedule, this debt will be retired in about 12 years (year 2030).

How will schools manage to operate during major construction?

The plan is to do as much construction as possible during the summer to try and minimize the impact on students and staff. The district has a history of accomplishing significant projects in ten weeks or less. However, there will be some work that will require adjustments to the normal school routine for at least part
of a school year. For example, at schools having major expansions where part of a building needs to be demolished, classrooms in that area could be temporarily relocated to portable units. As many accommodations as possible will be made to make sure school continues smoothly while allowing construction to be finished as quickly as possible.

How much will the additional classrooms increase number of staff/teachers? Where does the money come from?

The number of teachers in the district is based on a budgeted class-size ratio (number of students per teacher). This means the number of teachers depends on how many students are enrolled, not how many physical classrooms there are. That being said, if there isn’t room for that budgeted teacher, schools have to get creative with managing space. For example, schools have converted storage into classrooms and portable units have been added. If schools are expanded, teachers and students that are currently in overcrowded conditions will move to newly constructed permanent classroom spaces. Funding for teacher salaries comes from the district’s general fund, which receives money from local, state and federal governments. Bond funds cannot be used to pay for school operating costs, like teacher salaries.

Why isn’t lead abatement included in the bond? Portland Public Schools’ bond is addressing lead.

During the summer of 2016, Salem-Keizer Public Schools voluntarily tested all schools for lead and copper in the water. All fixtures that tested high for lead and copper were addressed at that time. You can find the test results and more information, such as the schedule for lead testing, on the district website in the Safe and Healthy Buildings Plan: http://www.salemkeizer.org/parents/safe-and-healthy-schools

Do corporations in Salem and Keizer pay property tax that would go toward the bond?

Yes. Commercial real estate has an assessed property value which has property taxes levied against it.

To save cost on buildings, is there any standardization of design and construction?

There are best practice standards for square footage of different areas within schools, such as classrooms, cafeterias, libraries, etc. These are called education specifications.

What was the levy rate increase in 2008 when the last bond was approved?

In 2008, old debt was paid off as the new bond was passed, so the tax rate stayed the same. Levy rates typically increase and decrease over the life of a bond as debt is retired or refinanced. For example, between 2015 and 2017, the levy rate paid on the 2008 bond decreased by just over 50 cents per thousand of assessed value.

How often have Salem-Keizer bond measures failed?

We’re fortunate to live in a community that values and supports education with a track record of approving general obligation bonds about every 8 to 10 years. We have records on bonds that passed in 1992, 1998, and 2008. Records on bonds that did not pass are hard to find, but we understand there was a measure for technology that failed sometime the ‘90s

What data do we have from the 2008 bond measure about how much extra money we had due to prudent financial management, etc.?

The district had approximately $18 million in unspent funds after all projects originally planned under the 2008 bond were completed. The $18 million was a result of a competitive bidding environment, earnings on bond sales and prudent financial management. A Citizens Bond Oversight Committee decided to use the unspent funds for additional repairs. The additional funds allowed the district to accomplish more work than was originally planned for the 2008 bond program.

What happened with the feedback staff gave during design reviews and listening sessions?

Feedback was compiled into reports for the School Board to consider when determining the final bond package. The reports were also shared with Facilities and Planning staff to be used during the master planning and design process at each school receiving major capital construction. Some things that the Board already changed in the package as a result of staff and community feedback is addressing space for music programs, increasing the capacity of West Salem High School from 2,000 up to 2,100 students, and adding a new gym at North Salem High School, to name a few.

Is the district considering selling or swapping property it currently owns to offset some costs of construction?

The Citizens Facilities Task Force discussed this possibility and discovered that the district doesn’t own enough property that could be swapped to reduce costs by a significant amount.

What kind of levy rates are other communities paying for their school bonds?

Here’s a comparison of local levy rates for 2017.