Students in Putnam County head back to the classroom on Wednesday as the school district is currently undergoing a major renovation plan to repair and rebuild aging schools.
Students’ parents and other Putnam County voters will soon be asked to sign off on a bond program totaling $300 million.
It’s a lot of money, but Putnam County School District Superintendent Dr. Rick Surrency said that it’s needed, as the county’s schools are very old. In fact, according to the district, Putnam County’s classrooms are some of the oldest in the state of Florida.
Surrency told News4JAX that Putnam County students deserve better.
“We feel our kids should have the things that kids have in St. Johns County and Duval County in all of our neighboring counties,” Surrency said. “So that is really a big lift. That’s probably our biggest challenge right now.”
In November, Putnam County voters will face that challenge head-on at the polls. If they agree to the plan, the district would sell bonds in increments as needed. They would total out to $300 million and would be paid off over the course of 30 years.
Surrency said state money is going toward building new high schools, but this bond money would build new elementary schools.
In year one of the bonds going into effect, according to the district, the average homeowner would have an extra $60.50 in year one added to their tax bill. Of course, that’s an estimation, and that figure would change over the years.
News4JAX asked Surrency what the next move would be if voters don’t sign off on it.
“If they decide they don’t want it, it is still something that we need to do and our kids will still be in aging schools,” Surrency said. “I think, over the long run, it will not be as big a burden as some people think it might be.”
Surrency said he understands the challenge, but points to the district’s rising graduation rates, more growth for the county overall and the need to stay ahead.
The district said there will be a public hearing on the proposed bond. It’s scheduled for 6 p.m. Aug. 25 at the former Miller Middle School auditorium on South Prospect Street in Crescent City.
Q&A on bond program
Here are some email questions and answers that News4JAX anchor and reporter Ashley Harding had with Rhonda Odom, who is in charge of finances for the Putnam County School District.
Question: “How exactly does it work? If it is split up over the course of 30 years, how does it operate?”
Answer: “Municipal bonds are bonds that provide a way for a local government to raise money for projects not funded elsewhere. They are called general obligation bonds because a specific revenue producing asset does not back them. Instead they are backed by the full faith and credit of the issuer. In other words, they are backed by the District’s ability to raise taxes through voted millages in the form of property taxes levied. Once we have approval from the voters to sell bonds, we will sell in increments as needed (for example we may initially sell $50 million of bonds to begin building one school; as more funds are needed we’ll sell additional bonds. Payments will vary based on the amount of bonds outstanding, interest rates on those bonds, and the property tax base of the year in question. The thought process is to not sell all $300 million at once, obligating our property owners to pay the maximum yearly payments from the start. It’ll be treated more as a home equity line of credit where we’ll “draw down” funds as needed (sell bonds) for the next phase of the plan. The bonds will be paid off over a 30 year period; each sale of bonds will start a 30 year period for that series of bonds. Like a home mortgage, general obligation bonds include a principal and an interest component. Each time the District sells a series of GOB Bonds, an interest rate is determined at the time of sale and is applied to that bond issue’s principal payments for that 30 year term. State statutes say that the money raised from the debt levy can only be used to make debt payments and the property tax millage rate is calculated each year to bring in only enough to provide the amount necessary to equal the required payments.”
Question: “Am I understanding correctly that the $300 million bond would pay for new elementary schools, while state money would fund high schools?”
Answer: “Yes, that is correct. We have already applied to the state for special facility funds (that are awarded annually through the legislative process) to build Crescent City Junior/Senior High School. We passed the first hurdle in that process when the team put together by the Florida Department of Education that toured CCJSHS determined that the school met the criteria to be a project of critical need. This project should be funded in the 2023 legislative session for construction work to begin in the summer of 2023. The District has to obligate one mill of capital funds per year of the project and the state budget will fund the rest. Once CCJSHS is complete, the district will apply for Special Facilities funds for the next Junior/Senior High School.”
Question: “I have seen the monetary breakdown online, but overall, what kind of annual dollar amount is this going to look like for homeowners?”
Answer: “Of course any answer I give you is an estimation based on several factors like the timing of the bond sales and amount of each sale, the interest rate we receive on each bond sale, the property tax base each year, etc. The median tax value of property in Putnam County is $109,500. If we sell $50 million of bonds in year one at an assumed interest rate of 4.4%, the amount owed by a property owner of a median valued home for the bond levy is estimated at $60.50 in year one, the lowest year. That’s $5.04 a month. At the highest point, when the entire $300 million of bonds has been sold, this same taxpayer would owe an annual tax bill for the debt of $291.80 (that’s $24.32 a month). The average annual amount paid by that same taxpayer over the life of the bond is $183.96 (that’s $15.33 a month). We can do this same analysis on any taxable property value. As property value grows in Putnam County, new residents coming in and buying or building property, our tax base increases with more property owners sharing the cost of the bond, which will spread the cost among more people and lower the individual’s millage rate for the debt service. As we are not allowed to levy millage that will bring in more than the annual required debt service, the increase in the addition of new property values would lower the debt owed by existing property owners.”