School district seeks $249 million more

The Clark County School District is seeking permission to increase its overall capital debt to $4.91 billion without affecting property taxes.

Jeff Weiler, the district's chief financial officer, will go before the county Debt Management Commission at 9 a.m. Friday at the county Government Center to get approval for a new $249 million bond program to modernize and renovate older schools.

The $249 million bond program will be in addition to the $4.67 billion debt remaining from the 1998 bond program.

The school district is well within its maximum debt level of $14 billion, which is equal to 15 percent of the county's total assessed property value of $93.7 billion. In theory, it could take on as much as $9 billion in new debt.

The district is not proposing any new property taxes, choosing instead to finance new debt with continuing sources of revenue.

It would use its 1.625 percent tax on hotel rooms and the proceeds of a tax equal to 60 cents for every $500 of value in real estate transactions. Along with the property tax, the room tax and the real estate transfer tax have already helped to pay down the 1998 bond program.

The bonds are expected to generate $107 million annually through 2032 to pay off remaining debt from the 1998 bond program and the proposed $249 million program.

The 1998 bond program is expected to be paid off in June 2028 with the property tax for the debt service -- 55.34 cents per $100 of assessed property value -- expiring later that month. The district plans to make the last payment on the proposed $249 million bond program on June 15, 2031.

School district officials are proposing the new program to take advantage of interest-free bonds offered through the federal stimulus program.

Purchasers of the bonds would get federal tax credits in lieu of interest payments, saving the school district millions of dollars, Weiler said.

District officials expect to issue about $100 million in the tax-free bonds and offer an additional $145 million in bonds with traditional fixed rates, which were estimated to collect interest at 6 percent.

Despite financial hardships, the district has maintained AA bonds ratings from creditors such as Fitch and Standard and Poor's.

Because the district cannot issue any more bonds from its 1998 program, it cannot take on more debt without the Debt Commission's approval.

The commission is made up of nine elected officials from various boards and two private citizens.

They are Chairwoman Susan Brager, a Clark County commissioner; Vice Chairwoman Lois Tarkanian, a Las Vegas city councilwoman; Clark County Commissioners Tom Collins and Steve Sisolak; Henderson Mayor Andy Hafen; North Las Vegas Mayor Shari Buck; Mesquite Councilman Randy Ence; Boulder City Councilman Cam Walker; School Board President Terri Janison; Carole Vilardo of the Nevada Taxpayers Association; and Kirk V. Clausen of Wells Fargo Bank.

The commission is limited by statute from judging the worthiness of the proposed bond programs. It can only approve or reject bond programs based on how they would affect county debt.

One debt service commissioner said off the record that it's a "rubber stamp board."

Because the school district is not proposing any new property taxes and is well within its debt limit, its proposal would appear to satisfy the commission's requirements for granting approval.

The new bond program would finance school modernizations such as new air conditioners, plumbing, electrical work, asphalt and concrete replacement, playground equipment and roof replacements.

An updated list of renovation projects will go before the district's Bond Oversight Committee and School Board for approval this fall.

Because of budget reductions to the district's operating fund, "most non-critical maintenance on district buildings has had to be deferred," Weiler said in an e-mail.

The School Board and Bond Oversight Committee would also have to approve a decision to go ahead with the new bonds before they could be issued.

The district currently levies 75 cents per $100 of assessed property value for school operations.

The 1998 bond program is expected to pay for 101 new schools by the time construction is finished in 2010.

Contact reporter James Haug at jhaug@reviewjournal.com or 702-374-7917.