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Luther Bond Election is Tuesday

Eleventh Hour Campaigning

If there are any winners so far in the campaign over the Luther School Bond Election,  it is social media. Facebook is getting the money from some “sponsored posts,” and folks are posting on various threads about the tax burden versus the necessity of the projects, and are trading mocking memes. Some questions have been asked, and this roundup by Luther’s only local news source attempts to break it down. The Luther Register has covered the campaign since the bond was announced in October.

The actual winners will be known after the polls close on Tuesday, January 8, 2019. It will take a 60% majority vote for the $24 million to pass, putting in motion a millage increase, a bond sale, and borrowed cash to purchase technology for the students and teachers, a cafeteria and safe rooms, and a new gym.

The issue is complicated. It seems like school funding and bond debt is complicated by design. In addition to various vendors, architects, contractors and their suppliers getting some high dollar work, bond issues, whether for a turnpike or to improve school facilities, also make money for the bond buyers, the financiers, and the managers. For this Luther issue, only $18 million will be spent on the projects, the other $6 million goes for things like bank charges, financial fees and interest. Stephen H McDonald stands to earn more than a quarter of a million dollars over time for crunching the numbers, if this bond passes. The company is one of the few in the state that does the tedious work of school bond projects, officials say.

In addition, the architect and contractors have also been selected for each project. Boynton Williams Architects from Norman drew up the plans and Atlas Construction gets to build. It’s the same company that is building Stroud’s new high school, but is also the company that lost a major Oklahoma City project because of leaks and other problems. Superintendent Barry Gunn said he talked to four other superintendents who worked with Atlas and he’s confident in the company’s work with schools.

Boiling it Down

If a $24 million bond issue can be boiled down, it seems the “Vote No” folks are opposed to the property tax increase; and the “Vote Yes” folks say it’s for the children and the upgrades to the school district are long overdue.

But who can boil down something so complicated? Taking on debt, whether it’s for yourself to buy a vehicle or a house, or in your community by paying more taxes for community projects, should warrant careful consideration, and individual decisions. In this case, it’ll take 60% of yes votes to pass. More than 650 votes were cast for the 2015 bond issue that failed by 85%.

Understanding  property taxes and school bond issues, comes with a new vocabulary list with terms like millage, levy and sinking fund.  It also involves doing some math. Calculators are allowed.

During the last weekend before the vote, a date set by the bond advisor so soon after the holidays, questions arose about the tax burden over time to taxpayers. A mom posed the question after looking at information on the Luther schools website:

On page 21 (schedule 4.8)… it shows the millage rates for the life of the bond. The first year the rate is 12.64%, The third year the millage rate is 22.05%. So it may not be an adjustable rate in the sense that it fluctuates with current interest rates but it certainly doesn’t seem fair to call it a a fixed rate either. I don’t mean to be an alarmist… and please do straighten me out if I am misunderstanding.

The question prompted this response from Superintendent Barry Gunn.
“Currently our sinking fund millage rate is 12.7 if the bond passes, it will go to 22.05. So, the increase is 10%  and the rate remains 22.05 for the life of the bond,” said Gunn.
In addition, School Board President Steve Broudy responded to the question.
“Per the schedule, which is on the website, last year’s rate was 12.7. This year’s rate is a projected 12.72. With the bond, next year’s projected will be 22.05 and remain in the lower 20’s for the duration,” said Broudy.

While some areas benefit from property taxes paid by industry in the area, to take more of burden away standard property owners like homeowners and large land owners, Luther has only one significant property tax payer which is Oklahoma Gas & Electric, and it only owns 51% of the Red Bud Power Plant on Triple X Road. Last year OG&E paid $173,000 in property taxes on a net assessed value of $1.7 million. The current property tax bill is $176,000 on value of $1.9 million. In fact, OG&E is the number one property tax payer in Oklahoma County, with total properties valued at $185 million.

Doing the Math
The 2015 bond proposal was bigger and controversial. The bond’s failure launched a difficult time for the district with a citizen’s call for an investigative audit, and then a budget crunch that led to program cuts, layoffs and eventually the resignation of the former superintendent.
The October 2015 Bond Vote

During this time, the district struggled to pay bills while grappling with slightly lower state funding. In a November 2016 bank report, the district reported having only  $72,000 in cash available. But a year later, new leadership was in place in the administration, including paid consultants, and the school board. The November 2017 bank report showed $187,000 in available cash, and one year later, that cash available number was more than a half million dollars, while the district shouldered pay raises that were not state funded.

Throughout 2018, there were meetings of the Long Range Planning Committee and word trickled out the group was considering another bond issue and was curating a list of needs. In October, the board held a special meeting to call for the bond election to be held right after the holiday break, Tuesday, January 8.

Gunn said members of the Long Range Planning include school board members, parents, grandparents, a local pastor, current and former teachers and current administrators: Steve Broudy, Sherri Anderson, Nichole Reser, Doug Wilson, Wes Boydston, Brian Wilson, Derrick Carney, Brian Jasper, Shelly Hulsey, Teri Tulane, Greg Westermier, Stephen Keith, Marcellus Fields, Barry Gunn and Shawn Meek.

Keeping up with Jones, and the other districts

Currently property tax payers in Luther’s School District have one of the lowest rates, according to county records, and Gunn said that information led the Planning Committee to present a bond package for the improvements. Deer Creek, Choctaw and Jones are among the highest.

Oklahoma County Tax Rates/Millages for 2018

If you have questions Monday, contact Mr Gunn or call 405-277-3233. You can also ask your questions here and we’ll help find the answers and share them with all readers. Meantime, if you are a voter, head to your regular precinct Tuesday from 7am – 7pm.

NOTE: the article was edited to remove the phrase “without competitive bidding” in the  the paragraph about the vendors performing the bond work if it passes. We were unable to confirm the practice or process and even the legality awarded work without a process. The State Bond Advisor told The Luther Register that his office only provides oversight of bonds at the state level, not the local level. And that the overseers of local bond process should be the people. 

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5 Comments

  1. Even with the passage of the bond, our millage rate will only be comparable to other districts in our area. Most of them are in the low to mid 20’s now. Luther’s is extremely low right now.

  2. If the bond passes, Luther’s millage rate will be comparable to those districts around us. Most of them are already in the low to mid 20’s. We will not have the highest rate.

  3. Thank you for a very comprehensive article. All the information is there to make an informed decision. We are responsible for our children, our future, and property values increase or decrease depending on whether you have good schools.

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