Worthington Schools

BOND LEVY - How Much is this going to cost me?

 

 The Bond Levy is a "no additional millage" proposition, but "no additional millage" does not mean "free". Obviously, there is a cost to the taxpayer. This page will answer questions about how much the levy will cost taxpayers.

 

The short answer is - we don't know. No one does. The cost to the taxpayer will depend primarily on the timing of the bond issuance, the prevailing interest rate at the time and valuations of the property in the district. A logical question is - how you can guarantee your promise of no additional millage? The answer is that we can control the timing of the bonds, so if we know that by issuing bonds at a given interest rate, we will exceed 3.8 mills (which is what you are currently paying), the Worthington Board of Education has committed, in writing, that we will simply not issue the bonds.

 

Adding to the confusion is the fact that the ballot language for Issue 14 specifies that the bond issue will cost 1.91 mills. Here is an explanation for the discrepancy.

 

Since we can't deal with certainties, let's deal with probabilities. Here is a model that demonstrates millage for the next 20 years, both with and without the issuance of the bonds.

 

It is important to understand that this is simply a model to illustrate the millage calculation. IT DOES NOT REPRESENT ANY PLAN OF THE WORTHINGTON SCHOOL DISTRICT. This model uses the following assumptions.

 

1) We issue 7.5 Million dollars of bonds each year  from 2007 through 2011

2) The interest rate in 2007 is 4.5%, 2008 is 4.75% and 5% thereafter.

3) Property values increase approximately 5% every three years (1.66%/year)

 

 

 

 

The numbers on the left side of the diagram show what happens if we DO NOT pass the levy. In calendar year 2006, you will pay 4.1 mills, then 3.72 mills in 2007, 3.7 mills in 2008 and so forth. The total debt is shown as 47,493,013 and will be completely paid off in the year 2013. If we pass the levy, the right side of the diagram shows the millage that will be required, given the above assumptions. As you can see, in 2007, you will actually be paying slightly LESS (3.5 mills) than if the levy fails because we would have refinanced part of the debt (the column labeled "less effects of restructured debt service" illustrates this). We are able to keep the millage down in the first few years because we are paying mostly interest and little principal. This is how we can keep the "no additional millage" promise. As you can see, starting in the year 2013, we start paying considerably more than if we fail the levy (2.31 mills vs 0.51 mills in this example), and then the payments stretch out through 2025.

 

 

So. How much will the levy cost you? In the below spreadsheet (assuming you have Excel or another program that processes spreadsheets), we've plugged in values for the average house in Worthington ($233,000) and the first year's projected millage (3.5). Plug in your house value and the millage from either the left side or the right side of the spreadsheet to find out how much it is going to cost you for your house.    

 

Again, please remember that this is just a model and does NOT represent any current plans of anyone connected with the district. It shows one possible scenerio. If interest rates are higher, you will pay more (but not more than 3.8 mills - remember, we promised). If interest rates are lower OR if we do not issue all of the bonds, you will pay lower.