Homeowners could face a smaller tax increase than previously thought necessary for the Rapid City Area Schools to take on a $250 million bond to replace and repair several schools, a school district official said Thursday at a public meeting.
District officials previously estimated that the repayment of the bond, which would finance a multi-school infrastructural overhaul, would require a hike of $2.37 for every $1,000 of a home's assessed value. But at a school board study session Thursday, they said an increase of only $1 for every $1,000 may be enough.
Business Manager David Janak said the growth the district is forecast to experience in the coming years should yield enough additional money to make up the difference. The more moderate increase could be further subsidized by the district's general and capital outlay funds, although Janak said the latter won't be available until existing debts are paid down in roughly 10 years.
Janak and Tobin Morris, a school financial consultant from the Pierre-based firm Dougherty & Company, projected that even more conservative estimates for growth should provide enough revenue to repay the bond within a 25-year time frame at a lower rate.
Future school boards would, however, still have the authority to levy additional tax increases as they see fit.
During Thursday's meeting, the board heard from members of the task force who crafted the proposed master plan that called for the bond issue. The preliminary recommendations of the plan's first phase were to close and replace three elementary schools and rebuild two middle schools over the next three to six years.
Resting on the projected growth of the district's tax base was said by some members to appear risky. Accordingly, some asked if a prioritized list of schools slated for closure, reconstruction or remodeling could be compiled so that a less expansive — and less costly — first phase of the plan could be redrawn.
Members of the task force, however, cautioned that the first phase already constitutes something of a high-priority list. Schools that are not in as poor of shape are being eyed for phases two and three.
The task force's final meeting is scheduled for May 30. It is expected that members will hand down a final set of recommendations to the school board in June.
If approved by the board, the matter of a bond issue would go to a referendum vote that would require 60 percent approval.