This Tuesday, August 14, at 6pm at the District Office (575 N. 100 E., American Fork) the Alpine School Board will hold a Truth in Taxation hearing. This is where you, the taxpayer, can have an opportunity to be heard about a tax-rate increase for this year's budget.
The perspective of most everyone in education is that if the amount isn't all that big, then it shouldn't be an issue. In fact, bond votes and tax increases are proclaimed, nationwide in school board conferences and publications, as evidence that taxpayers are "supportive of public education." If you oppose a bond or any other sort of tax increase, you don't care about kids and certainly you don't want them educated. (In fact, some of the conferences have "how to" courses on increasing funding in education. There is no discussion about what to spend that money on.) In fairness, for the most part, I think Alpine School District does a decent job with our funding and budgeting. And the intentions of everyone involved, I think, are good.
Here's what you need to know. Feel free to skim the non-italicized parts for the main points.
1. Utah Law requires the amount of money the districts (or cities or counties) receive from year to year to remain the same, excluding growth.
So, if we received $100M one year from all the property in ASD's boundaries, then we should receive $100M the next year from those same properties PLUS any additional property taxes from any new developments that came into being that next year.
How this works: If the total amount of all the property in ASD increases in value, then the tax rate decreases automatically to generate the same amount going to the district. If the total amount of all the property decreases in value, then the tax rate increases automatically.
An example. Numbers used are for explanation purposes but are not accurate. The tax rate is much, much lower. And the examples are, admittedly, very simplified.
Year 1: Total property value : $100M. Tax rate: 1%. Taxes generated: $100M x 1% = $1M.
Year 2: Total property value: $90M. Tax rate:1.1%. Taxes generated (minus growth): $90M x 1.1% = $1M.
Year 3: Total property value: $110M. Tax rate: 0.9%. Taxes generated (minus growth): $110M x 0.9% = $1M.
Truth in Taxation: If in Year 3, the district would like to keep the tax rate at 1.1% or even increase it, so as to generate more than the $1M, then a Truth in Taxation hearing would need to occur. At the 1.1% rate, this would generate $1.21M instead.
Rather than following the economy like most other states, that when values increase, the taxes go up and vice versa, ours is the opposite. When the economy is struggling and values are down, the tax rate automatically increases and you are paying a larger percentage in property taxes than you were. But there is no hearing on this. It just happens. When the economy is good, you pay a smaller percentage in taxes.
2. If the tax rate goes down, the district can hold a public Truth in Taxation hearing to increase that rate. This is what we are doing on Tuesday. The interesting part of this is that we only have these hearings, arguably, when the economy is strong. When the economy is weak and values are down, the rate increases but without a public hearing. So the vast majority of the population is less concerned about a rate increase because they are doing well.
Sadly, under our current tax system, the people who are most harmed by this are those whose particular circumstances make them struggle economically while prosperity reigns around them. They might be those on a fixed-income (who, if elderly or disabled, do get partial waivers for property taxes), young people and young families, just starting off in life, and military families, for example.
3. The legislature has created an incentive for districts to increase property taxes. The state matches local property tax with state funds, up to a certain amount. If the tax rate goes down, the state continues to match at the higher rate for up to 5 years. This creates an incentive for the district to increase the rate at least once every 5 years. The legislature may claim that they don't raise taxes, but they incentivize the local school districts to do it for them. It's a win-win for the legislature. More money in education; no accountability for raising taxes or creating a tax system where in hard times your tax rate just happens to go up without anyone commenting or caring.
Going forward, it would be even easier for the district to just regularly increase the rate every year, that way the increase is much, much smaller, and fewer people will complain. Doing this yearly, the perception will be that we aren't increasing the taxes very much, and the side-benefit is that people get used to having a Truth in Taxation hearing every year. It becomes as big of a deal as watching paint dry.
4. We support tax-incentives over multiple decades for big, well-connected companies, like Facebook. Currently, those range in the area of $18,000,000 per year. (See pg. 181: here.)
Yes, the argument is that without these tax incentives, nothing would ever develop. But, giving the tax incentives over more than 5 -10 years enters into the realm of predicting the future. It is difficult for the average person to justify a tax incentive for a big, well-connected corporation, but then come back to taxpayers and ask for a few dollars more. What's good for the goose should be good for the gander. If we need more money today, then we probably shouldn't have approved those tax incentives all those years ago. With a growing community like Utah County, I think we would be hard-pressed to assume that all the development in our communities wouldn't have occurred without these tax incentives. In the short-term, that may be true. In the long-term? I seriously doubt it. Tax-incentives, if you think such a thing should be done, should be limited to 5 or 10 years. Anything more than that is just robbing future generations of school kids in order to appease the power-brokers of today. Facebook gets to live here tax-free for 35 years. You and I aren't so lucky.
5. Increased Tech and Coaching Funding vs More Teachers and Smaller Class Sizes. Our district/board's priorities don't seem to match those priorities of the people. Repeatedly, when talking with parents and taxpayers, their biggest concerns are wanting smaller class sizes, traditional math (not Common Core/Investigations/Inquiry-based math), and limits on screen time.
Instead, partly due to legislative incentives and partly due to education conferences, everyone (it seems) in the state and the nation is accepting the narrative that without technology, kids will not be able to function appropriately "in the 21st Century." So, in addition to the millions that ed tech companies stand to make, everyone thinks that educational technology is the Silver Bullet of education--probably a lot like Baby Einstein videos from a decade or so ago. (Side note: Silicon Valley execs are the exception. ) Have you seen your kids on tech? Are you worried they won't pick it up without explicit training and exposure to it?
Also, there is a huge push toward Social-Emotional Learning (SEL)/21st Century Skills, nationally, as opposed to academic content. What that means is participation and attitudes can be seen as more important than whether you know history or math facts. To our credit, our teachers are being trained to make SEL as important, not more important, than academic content. But, while teachers have always, naturally, included things like participation, honesty, and a can-do attitude as a by-product of their teaching, to focus on those things necessarily removes the focus from reading, writing, and math.
Our current budget includes expenses for hiring more Technology and Instructional Coaches to train teachers to use tech and these other methods (Project-based, Inquiry-based, etc), as opposed to using those same funds to hire more teachers to reduce class sizes. The argument is that if the Coaches make our existing teachers better, then it's a more efficient use of our time. One school has had great success with an Instructional Coach. So, if that model holds, then similar improvements should be seen when expanded across the district's nearly 90 schools.
Our budget also includes funding for more technology. As our schools go through our 21st Century implementation, iPads and ChromeBooks are included at the ratio of 1 device for every 2 students. Sadly, parents don't really have an option for a tech-less school system. And in light of all the negative results of too much screen time, I think we are setting our kids up for lots of problems (sleep issues, moodiness, depression, etc. See here, here, and here.) by adding to the already ubiquitous screen exposure. Not to mention, the increased difficulty parents now have in making sure kids do their homework (and don't get distracted), limiting screen time, and knowing what their kids are studying and how they're doing, if everything is online.
Many people think a small increase in funding is appropriate. The real question is what do you think? How should that increase be used? Will you be willing to stand up and state what your priorities are for our school district? Hope to see you at the hearing on Tuesday!
Friday, August 10, 2018
Tuesday, July 3, 2018
Divine Providence in America's Founding
Note: This blog is written from a Latter-day Saint (LDS) perspective, including a quote from LDS Scripture. The providential events listed are acknowledged by many scholars, and attested to by those who lived at the time.
Two-hundred forty-two years ago, 56 men pledged their lives, their fortunes and their sacred honor to support the Declaration of Independence “with a firm reliance on the protection of Divine Providence.” How firm did that reliance have to be?
A mere eight weeks after the Declaration of Independence was adopted, Washington and the Continental Army were defeated on Long Island. But a miracle occurred during their retreat. British General Howe tried to send warships up the East River to surround Washington, but a stiff wind appeared and prevented their advance. Later, under cover of darkness, the Americans retreated across that same river. But now the winds shifted to shepherd the Americans across. Even so, the retreat took all night. As the sun rose, there were still numerous troops left on the island. Eyewitnesses state that a thick fog arose, but amazingly, it settled precisely over the retreating American army. Once the Americans were safely across the river, the fog lifted.
The Battle of Long Island was not an isolated incident. Dorchester Heights, White Plains, Trenton, Germantown, Valley Forge, Stony Point, Cowpens, and even Yorktown are just a few of the areas where the elements combined to aid the Americans and to impede their enemies.
2,300 years earlier, the prophet Nephi, “beheld that the Gentiles...did humble themselves before the Lord; and the power of the Lord was with them...[T]he Gentiles...were delivered by the power of God out of the hands of all other nations.” (1. Ne. 13:16,19)
We are the inheritors of that legacy of faith and freedom. This Independence Day, we are “bound” to gratefully acknowledge the Hand of God in establishing and preserving this nation. But in doing so, we should be willing to live righteously to qualify for the continued blessings of Heaven on this land.
As we, like our forefathers, support the Declaration of Independence, may we do so “with a firm reliance on the protection of Divine Providence...”
“No people can be bound to acknowledge and adore the Invisible Hand which conducts the affairs of men more than the people of the United States. Every step by which they have advanced to the character of an independent nation seems to have been distinguished by some token of providential agency.”--George Washington
Monday, May 21, 2018
Tax Incentives for Development: Eagle Mountain CRA
Not all taxpayer dollars go directly to the schools. Often developers get tax incentives to build things sooner and increase property values, providing a rebate, if you will, of their property taxes over a set period of time. The Alpine School Board will be voting on a tax incentive for a company to locate in Eagle Mountain on Wednesday, May 23, @ 8am @ the District Office (575 N. 100 E., American Fork). You can read about it here. Here's what almost no one knows and what you need to know.
Tax Increment Financing
When I first was elected to the Board, one of the things I was completely oblivious to was Tax Incentives for Development, also known as Tax Increment Financing (TIF). There are many different acronyms that have been used over the years (RDA, UDA, CDA, EDA), and we currently have CRA (Community Redevelopment Agency). The thinking is that if a developer/corporation comes into an under-developed area and develops it, then the taxes that would have gone to create things like roads, sewers, water lines, etc can be rebated to the developer. The benefit to the community is that it takes less time for the developer to do this, increasing the property value sooner than it otherwise would have, if left on its own with the City providing the infrastructure and development occurring organically. It is an incentive to grow development and infrastructure. The developer gets a tax break and the community gets faster development and increased property values, and theoretically property taxation.
Poor analogy, but in essence, if you finish off the dirt road to your home as part of a rebuild of your property, the City would agree to give you a rebate on the taxes you owe in order to let you cover the cost of that infrastructure. The City then gets higher property taxes from you sooner than if they waited and you didn't rebuild your home, as soon or ever.
The way the law is structured, each taxing entity (the City, the County, the Water District, the School District, etc) MAY choose to enter an agreement with a redevelopment agency/developer (RDA). The terms for this are, often, for the next 20 years, the RDA will get to keep 80% of the taxes it should be paying and the city or county or district will get the remaining 20%, or 50-50 or 75-25, etc. This is part of the negotiations. After 20 years, everyone pays what they normally would. The "increment" part is important because the taxing entity gets 100% of what they are currently getting in property taxes. So the 80%/20% is only on the difference between what the developed value is and the current value when the project began. So, in the case of Eagle Mountain, the current taxes to the district amount to $42/year. When the agreement is completed, the amount the district is projected to receive is approximately $2.5M ($500,000/20%) in real property tax. In the interim, the district would receive the $42 + about $500,000 per year for that 20 year period.
More Info on Eagle Mountain CRA
The other thing to know about the Eagle Mountain CRA is they are requesting not only the 80% in real property as a rebate, but also 100% of the personal property tax during that 20 year period. So, the estimates assume a total of $5.3M after 20 years in property taxes. What we do know is this will be a data center owned by a Fortune 100 company. The City has signed a confidentiality agreement to not disclose the identity of the company. The project area will be 2 miles square (nearly 500 acres) and all of it will be for a data center. They project 40 permanent employees for that data center. However, I have seen some Facebook posts from those in Eagle Mountain who say the project could bring in 1400 jobs in construction and support.
Sales Tax Exemption
Another important piece is the legislature just passed a law giving data centers an exemption from paying sales tax on the equipment they buy. The assumption is they will be spending lots of money on keeping, maintaining and replacing equipment, about every 6 years. The sponsor of the bill, Sen. Howard Stephenson, felt this would be a good incentive to get data centers to locate in Utah while increasing the property tax amount that schools receive. If you only have 40 employees, and you get a break on sales tax, but pay property tax, this would be an excellent way to increase funding for schools, especially in the lowest funded state in the nation. It was not envisioned that those companies would try to get a property tax rebate as well through a CRA, since they were already getting no sales tax.
So What's the Concern?
Government Picking Winners and Losers
The biggest concern I have is one of principle. It isn't good government to have government entities picking winners and losers for tax breaks based on how much they can "provide" to the governmental entity. Who knows that a competitor might not be just around the corner but isn't in a position to make such incredible demands of a governing board or council. So, as a matter of principle, I always vote no on these--from the Vineyard RDA in 2011 to the University Mall CDA a couple of years ago. Others on our board see it differently. And many citizens do, as well. At the end of the day, why should a well-connected, rich and powerful company be able to negotiate a better tax deal than you or I or any other small business owner in the state? A company that is said to be on the Fortune 100 list is not in want of funding to pay property taxes for schools. I understand, in part, the City wanting them to pay for infrastructure, but the school district is not on the line for that infrastructure.
Why Encourage Growth When Growth Is A Concern
My second concern is I see no reason to incentivize growth with tax rebates, as it were, in an area where our biggest challenge is growth. We are struggling to keep up with growth already. Why would we want to encourage more growth and decrease the amount of taxes those who are coming in will pay?
Water
A data center needs lots of water. We live in a desert. Eagle Mountain City says water will not be a concern. The data center is paying for water shares and they have enough of that. I'm still a skeptic. Our city thinks we have enough water too and we keep issuing building permits, but every summer, I'm still asked to ration my watering. It may look okay on paper, but the funny thing about water in a desert is there is still only so much that falls from the sky. This year isn't one where we have more than enough. I hope the City is correct and that water won't be a problem.
Apples-to-Apples Comparisons
One of those who emailed on this issue also mentioned that, while he supports this kind of financing, it's important to look at apples-to-apples comparisons. You don't compare $42/year to $500,000, you compare what amount of development you need to have in order get that $500,000 over the next 20 years, if you open the area up for development. If you could reasonably get someone to develop that area and the improvements were assessed for $157,000 per acre, then the property tax revenue would equal what is being projected under this proposal. If the assessed value were greater, then we would get more revenue than under this project. The assumption that the land isn't being used and won't ever be in the near (20 years) future isn't a completely accurate assumption. Once upon a time, Lehi was considered undeveloped and in the middle of nowhere. Also, right now in Highland $150,000/acre isn't an unreasonable amount for just the land. I realize Eagle Mountain is different, but how much development in buildings and so forth would be needed to reach that $157,000 mark? And is it possible that this would occur naturally in a few years? If this company wanted the CRA for 5 years, or maybe 10 years, I think you could make the case that it's unlikely that development would accelerate in the area enough to create that level of return to the tax coffers. However, in 20 years? It's very possible. Again, look at our county just a few decades ago.
Pressure From Elected Officials and How Utah Incentivizes Economic Development
We have had requests for support from the Governor, Rep. Mia Love, Sen. Jake Anderegg, Rep. Jeff Moss, and the Eagle Mountain Mayor and City Council. We have been told that this project is the number one priority of the Governor and the Governor's Office of Economic Development (GOED). Additionally, I found out there is a non-profit organization, EDC Utah, that apparently exists and works with GOED to search out and incentivize businesses to come in to the state. This is done by working with local entities to give tax breaks to these companies, all of which are allowed by law. The school district is not required to participate in these tax incentives. But the way this works is everyone else who makes up the 30% of property taxes that don't go to the schools is happy to make these deals, dependent on the school district's 70% being in play. I don't know how many times I've been told that we have to go along or the entire deal will fall through. It seems to me that if the entire thing is based on the school district, then we should be the ones who are approached initially, not after everyone else has decide this is a great idea. (And in this case, we found out on Friday night, with a request to decide last Tuesday. That wasn't going to happen.)
A most important point, however, is that no one who is asking for the school district's support is responsible for making sure that our schools are not overcrowded. There is nothing they have to lose; no risk they have to take. If the company comes in and generates tax revenue for the state overall or the city? Great. If the business being in the city increases the growth of business and housing in the city overall? Great, they get impact fees to offset the attendant growth. Except for the school district. We still have to find a way to accommodate that growth without the benefit of setting money aside for that growth. We will have to bond. And if the schools become overcrowded because of this project, not a single person will be willing to look to these tax incentive programs as a problem. If these programs were sufficient to accommodate growth of the district, then we wouldn't have a problem with growth in Lehi because we've got plenty of these CRAs in that city...to the tune of $15M per year in tax incentives. Not enough for an elementary school, but close.
How To Fund Growth In Schools: Can't use impact fees
While I understand the benefit to the City, and if this project were a complete stand-alone that would have absolutely no impact whatsoever on the schools (and how would you prove that), this would make sense. But we are struggling to keep up with the growth already. Should this project incentivize additional growth, then that $500,000 per year would be insufficient. It costs nearly $800,000 just to run an elementary school for a year, not to mention the cost to build and the teachers, etc. A company that is said to be on the Fortune 100 list is not in want of funding to pay property taxes for schools. I understand, in part, the City wanting them to pay for infrastructure, but the school district is not in charge of that infrastructure. If those 1400 support jobs end up bringing in an additional 2 kids per person (2800), that is the equivalent of one very large high school. Right now, we are projecting we will need to build at least one high school and one junior high by 2025. So, is it reasonable to assume over the next 20 years that the district will need to build, in addition to what is already projected another high school, maybe 1 or 2 middle schools, and 3-4 elementary schools for those additional 2800 kids? One high school alone costs $83M. $10M ($500,000 * 20 years) is only a drop in the bucket in building a single high school, let alone a middle school ($30 - 40M) and multiple elementaries ($20M each). Unlike the City or the County, the school district does not get to charge impact fees. What that means is as new development comes in, the city and the county assess a certain amount to go to expand their sewers or their water retention ponds or the police force, etc. As a district, we have been prohibited by state law for at least 15 years from being able to assess fees to plan ahead for growth that we clearly can see coming. Instead, we are forced to bond every four years to infuse cash into our system that doesn't already exist to accommodate building new schools. While impact fees wouldn't necessarily pay for all of the $83M for a new high school, it would be nice to know there was a way to set aside a certain amount based on new growth, just like the cities and the counties do. Our bonding for growth model is not a model, it's a stop-gap measure. In a way, it makes us not want to encourage growth in our communities because that growth just means we have to bond and pay for more schools, instead of having something that we can automatically use to set money aside for those schools that we will surely need.
Additionally, as a district, we only ever project out 5 years. In part, because we know that 5 years from now, those kids who are born this year, will need a place to go to school. Everything else is conjecture. So, to say that Eagle Mountain will not have this area developed to this degree in the next 20 years and that no growth will result for the schools in that same period of time, because of this development, is known only by looking into a crystal ball.
In my opinion, the school district should not authorize any more tax incentive plans until such time as the state legislature decides to allow impact fees or comes up with a better way of funding school buildings based on a community's growth. Asking people in Orem or Pleasant Grove to bond to pay for the growth in Eagle Mountain or Lehi isn't a good way of handling checks and balances in government. And if Lehi or Eagle Mountain were responsible for their own growth, I think there would be fewer problems with overcrowding, and something like this proposal might make sense to the people of Eagle Mountain. It doesn't make sense to the people in the rest of the district because we need the money to fund growth now, not in 20 years.
Tax Increment Financing
When I first was elected to the Board, one of the things I was completely oblivious to was Tax Incentives for Development, also known as Tax Increment Financing (TIF). There are many different acronyms that have been used over the years (RDA, UDA, CDA, EDA), and we currently have CRA (Community Redevelopment Agency). The thinking is that if a developer/corporation comes into an under-developed area and develops it, then the taxes that would have gone to create things like roads, sewers, water lines, etc can be rebated to the developer. The benefit to the community is that it takes less time for the developer to do this, increasing the property value sooner than it otherwise would have, if left on its own with the City providing the infrastructure and development occurring organically. It is an incentive to grow development and infrastructure. The developer gets a tax break and the community gets faster development and increased property values, and theoretically property taxation.
Poor analogy, but in essence, if you finish off the dirt road to your home as part of a rebuild of your property, the City would agree to give you a rebate on the taxes you owe in order to let you cover the cost of that infrastructure. The City then gets higher property taxes from you sooner than if they waited and you didn't rebuild your home, as soon or ever.
The way the law is structured, each taxing entity (the City, the County, the Water District, the School District, etc) MAY choose to enter an agreement with a redevelopment agency/developer (RDA). The terms for this are, often, for the next 20 years, the RDA will get to keep 80% of the taxes it should be paying and the city or county or district will get the remaining 20%, or 50-50 or 75-25, etc. This is part of the negotiations. After 20 years, everyone pays what they normally would. The "increment" part is important because the taxing entity gets 100% of what they are currently getting in property taxes. So the 80%/20% is only on the difference between what the developed value is and the current value when the project began. So, in the case of Eagle Mountain, the current taxes to the district amount to $42/year. When the agreement is completed, the amount the district is projected to receive is approximately $2.5M ($500,000/20%) in real property tax. In the interim, the district would receive the $42 + about $500,000 per year for that 20 year period.
More Info on Eagle Mountain CRA
The other thing to know about the Eagle Mountain CRA is they are requesting not only the 80% in real property as a rebate, but also 100% of the personal property tax during that 20 year period. So, the estimates assume a total of $5.3M after 20 years in property taxes. What we do know is this will be a data center owned by a Fortune 100 company. The City has signed a confidentiality agreement to not disclose the identity of the company. The project area will be 2 miles square (nearly 500 acres) and all of it will be for a data center. They project 40 permanent employees for that data center. However, I have seen some Facebook posts from those in Eagle Mountain who say the project could bring in 1400 jobs in construction and support.
Sales Tax Exemption
Another important piece is the legislature just passed a law giving data centers an exemption from paying sales tax on the equipment they buy. The assumption is they will be spending lots of money on keeping, maintaining and replacing equipment, about every 6 years. The sponsor of the bill, Sen. Howard Stephenson, felt this would be a good incentive to get data centers to locate in Utah while increasing the property tax amount that schools receive. If you only have 40 employees, and you get a break on sales tax, but pay property tax, this would be an excellent way to increase funding for schools, especially in the lowest funded state in the nation. It was not envisioned that those companies would try to get a property tax rebate as well through a CRA, since they were already getting no sales tax.
So What's the Concern?
Government Picking Winners and Losers
The biggest concern I have is one of principle. It isn't good government to have government entities picking winners and losers for tax breaks based on how much they can "provide" to the governmental entity. Who knows that a competitor might not be just around the corner but isn't in a position to make such incredible demands of a governing board or council. So, as a matter of principle, I always vote no on these--from the Vineyard RDA in 2011 to the University Mall CDA a couple of years ago. Others on our board see it differently. And many citizens do, as well. At the end of the day, why should a well-connected, rich and powerful company be able to negotiate a better tax deal than you or I or any other small business owner in the state? A company that is said to be on the Fortune 100 list is not in want of funding to pay property taxes for schools. I understand, in part, the City wanting them to pay for infrastructure, but the school district is not on the line for that infrastructure.
Why Encourage Growth When Growth Is A Concern
My second concern is I see no reason to incentivize growth with tax rebates, as it were, in an area where our biggest challenge is growth. We are struggling to keep up with growth already. Why would we want to encourage more growth and decrease the amount of taxes those who are coming in will pay?
Water
A data center needs lots of water. We live in a desert. Eagle Mountain City says water will not be a concern. The data center is paying for water shares and they have enough of that. I'm still a skeptic. Our city thinks we have enough water too and we keep issuing building permits, but every summer, I'm still asked to ration my watering. It may look okay on paper, but the funny thing about water in a desert is there is still only so much that falls from the sky. This year isn't one where we have more than enough. I hope the City is correct and that water won't be a problem.
Apples-to-Apples Comparisons
One of those who emailed on this issue also mentioned that, while he supports this kind of financing, it's important to look at apples-to-apples comparisons. You don't compare $42/year to $500,000, you compare what amount of development you need to have in order get that $500,000 over the next 20 years, if you open the area up for development. If you could reasonably get someone to develop that area and the improvements were assessed for $157,000 per acre, then the property tax revenue would equal what is being projected under this proposal. If the assessed value were greater, then we would get more revenue than under this project. The assumption that the land isn't being used and won't ever be in the near (20 years) future isn't a completely accurate assumption. Once upon a time, Lehi was considered undeveloped and in the middle of nowhere. Also, right now in Highland $150,000/acre isn't an unreasonable amount for just the land. I realize Eagle Mountain is different, but how much development in buildings and so forth would be needed to reach that $157,000 mark? And is it possible that this would occur naturally in a few years? If this company wanted the CRA for 5 years, or maybe 10 years, I think you could make the case that it's unlikely that development would accelerate in the area enough to create that level of return to the tax coffers. However, in 20 years? It's very possible. Again, look at our county just a few decades ago.
Pressure From Elected Officials and How Utah Incentivizes Economic Development
We have had requests for support from the Governor, Rep. Mia Love, Sen. Jake Anderegg, Rep. Jeff Moss, and the Eagle Mountain Mayor and City Council. We have been told that this project is the number one priority of the Governor and the Governor's Office of Economic Development (GOED). Additionally, I found out there is a non-profit organization, EDC Utah, that apparently exists and works with GOED to search out and incentivize businesses to come in to the state. This is done by working with local entities to give tax breaks to these companies, all of which are allowed by law. The school district is not required to participate in these tax incentives. But the way this works is everyone else who makes up the 30% of property taxes that don't go to the schools is happy to make these deals, dependent on the school district's 70% being in play. I don't know how many times I've been told that we have to go along or the entire deal will fall through. It seems to me that if the entire thing is based on the school district, then we should be the ones who are approached initially, not after everyone else has decide this is a great idea. (And in this case, we found out on Friday night, with a request to decide last Tuesday. That wasn't going to happen.)
A most important point, however, is that no one who is asking for the school district's support is responsible for making sure that our schools are not overcrowded. There is nothing they have to lose; no risk they have to take. If the company comes in and generates tax revenue for the state overall or the city? Great. If the business being in the city increases the growth of business and housing in the city overall? Great, they get impact fees to offset the attendant growth. Except for the school district. We still have to find a way to accommodate that growth without the benefit of setting money aside for that growth. We will have to bond. And if the schools become overcrowded because of this project, not a single person will be willing to look to these tax incentive programs as a problem. If these programs were sufficient to accommodate growth of the district, then we wouldn't have a problem with growth in Lehi because we've got plenty of these CRAs in that city...to the tune of $15M per year in tax incentives. Not enough for an elementary school, but close.
How To Fund Growth In Schools: Can't use impact fees
While I understand the benefit to the City, and if this project were a complete stand-alone that would have absolutely no impact whatsoever on the schools (and how would you prove that), this would make sense. But we are struggling to keep up with the growth already. Should this project incentivize additional growth, then that $500,000 per year would be insufficient. It costs nearly $800,000 just to run an elementary school for a year, not to mention the cost to build and the teachers, etc. A company that is said to be on the Fortune 100 list is not in want of funding to pay property taxes for schools. I understand, in part, the City wanting them to pay for infrastructure, but the school district is not in charge of that infrastructure. If those 1400 support jobs end up bringing in an additional 2 kids per person (2800), that is the equivalent of one very large high school. Right now, we are projecting we will need to build at least one high school and one junior high by 2025. So, is it reasonable to assume over the next 20 years that the district will need to build, in addition to what is already projected another high school, maybe 1 or 2 middle schools, and 3-4 elementary schools for those additional 2800 kids? One high school alone costs $83M. $10M ($500,000 * 20 years) is only a drop in the bucket in building a single high school, let alone a middle school ($30 - 40M) and multiple elementaries ($20M each). Unlike the City or the County, the school district does not get to charge impact fees. What that means is as new development comes in, the city and the county assess a certain amount to go to expand their sewers or their water retention ponds or the police force, etc. As a district, we have been prohibited by state law for at least 15 years from being able to assess fees to plan ahead for growth that we clearly can see coming. Instead, we are forced to bond every four years to infuse cash into our system that doesn't already exist to accommodate building new schools. While impact fees wouldn't necessarily pay for all of the $83M for a new high school, it would be nice to know there was a way to set aside a certain amount based on new growth, just like the cities and the counties do. Our bonding for growth model is not a model, it's a stop-gap measure. In a way, it makes us not want to encourage growth in our communities because that growth just means we have to bond and pay for more schools, instead of having something that we can automatically use to set money aside for those schools that we will surely need.
Additionally, as a district, we only ever project out 5 years. In part, because we know that 5 years from now, those kids who are born this year, will need a place to go to school. Everything else is conjecture. So, to say that Eagle Mountain will not have this area developed to this degree in the next 20 years and that no growth will result for the schools in that same period of time, because of this development, is known only by looking into a crystal ball.
In my opinion, the school district should not authorize any more tax incentive plans until such time as the state legislature decides to allow impact fees or comes up with a better way of funding school buildings based on a community's growth. Asking people in Orem or Pleasant Grove to bond to pay for the growth in Eagle Mountain or Lehi isn't a good way of handling checks and balances in government. And if Lehi or Eagle Mountain were responsible for their own growth, I think there would be fewer problems with overcrowding, and something like this proposal might make sense to the people of Eagle Mountain. It doesn't make sense to the people in the rest of the district because we need the money to fund growth now, not in 20 years.
Monday, March 12, 2018
Thank You
I want to thank you for your support and for your involvement in our school district. The real answer to anything that ails us in government is "We, the People." If we are informed and involved, we will find answers. We will see differences as a strength, and we will be motivated to become the best we can in the service of others.
My term will be ending in December, and I will not be running for re-election. It is time for others to step in. "Many hands make light work."
I hope to continue to fight against standardization in education, to get real math put back in our schools, and to remove a one-size-fits-all vision of education. I will work to keep options for parents who choose to limit their children's access to technology. And I will continue to follow education issues on this blog. I ask you to join me.
I hope that you will continue to communicate with whoever ends up representing you on the Alpine School Board. I hope they will be sustained and supported, not demeaned and criticized. I hope you will inform them of your needs, and that they will listen for understanding. And, in the end, I hope that each child in our district will receive the opportunities for knowledge and truth that education is all about.
Those wishing to run for office, can register at the County Elections Office in Provo through this Thursday, March 15, 2018.
My term will be ending in December, and I will not be running for re-election. It is time for others to step in. "Many hands make light work."
I hope to continue to fight against standardization in education, to get real math put back in our schools, and to remove a one-size-fits-all vision of education. I will work to keep options for parents who choose to limit their children's access to technology. And I will continue to follow education issues on this blog. I ask you to join me.
I hope that you will continue to communicate with whoever ends up representing you on the Alpine School Board. I hope they will be sustained and supported, not demeaned and criticized. I hope you will inform them of your needs, and that they will listen for understanding. And, in the end, I hope that each child in our district will receive the opportunities for knowledge and truth that education is all about.
Those wishing to run for office, can register at the County Elections Office in Provo through this Thursday, March 15, 2018.
Friday, February 2, 2018
NGSS: Standards for Grades 5, 9-12. My Letter to the State Board
Dear State Board Members:
I am concerned with the standards-adoption process I've observed since 2010. Due to a lack of opportunity for the public to be involved during the Common Core adoption process in June and August of 2010, state law changed to require parent advisory committees for standards. However, I have not found those "safe-guards" of advisory panels to address the fundamental questions required for standards adoption.
Just like with the math standards, average parents who have concerns with the current standards or with proposed new standards, do not have the time, energy or money to be able to effectively combat them with organizations that have full-time staff and who receive more time to discuss, debate, and propose than the 2 minute comment period allowed or by sending everything in an email. To that end, I hope you will forgive the length of my email, as I am unable to attend the committee meeting, and I want to include as much information as possible.
I would like to address my main concerns with further adoption of the NGSS for science, and then address the questions I hope you will answer before voting on them.
CONCERNS WITH NGSS
1. ACT scores do not support switching to NGSS. In 2015, when I first wrote about my concerns in adopting NGSS, Utah scored higher in science on the ACT than the national average. Utah tests ALL of its juniors on the ACT, which would naturally lower the ACT average when compared with states who allow for self-selection. Utah's science ACT scores were higher than all those states who test 100% of their juniors as well (as per the 2014 stats, which were the latest ones available at that time: you can see them here: https://web.archive.org/web/20150915050646/https://www.act.org/newsroom/data/2014/pdf/CCCR14-StatebyStateScoreSummary.pdf.)
Since then, ACT has redesigned their test, and Utah has adopted NGSS (pretty much) for grades 6-8. As of 2017 (https://www.act.org/content/dam/act/unsecured/documents/cccr2017/CCCR_National_2017.pdf, see pg. 14), Utah is one of 17 states, testing all its juniors. Our science percentages (on benchmark) are exceeded only by 3 states (CO, MN, WI), none of which have adopted NGSS: http://ngss.nsta.org/About.aspx) In a quick search, I have been unable to find "raw scores" like I did for the 2014 ACT.
Either way, if you think ACT is a good measurement of science mastery, then I'm unsure why we would jettison something that is working for something that hasn't shown itself to work for those states who have adopted these standards.
2. Fordham Foundation rates UTAH "clearly superior to NGSS. NGSS is rated a C. Fordham rated Utah's science standards (pre-NGSS for grades 6-8) a B, 7/10. Please read their critique. (http://edex.s3-us-west-2.amazonaws.com/publication/pdfs/20130612-NGSS-Final-Review_7.pdf)
A few quotes:
"In reality, there is virtually no mathematics, even at the high school level, where it is essential to the learning of physics and chemistry. Rather, the standards seem to assiduously dodge the mathematical demands inherent in the subjects covered."
"NGSS physical science coverage is mediocre throughout grades K–5. Sadly, its quality declines rapidly and steadily in middle school, and still further at the high school level, where little positive can be said. Indeed, the physical science standards fail to lay the foundation for advanced study in high school and beyond, and there is so little advanced content that it would be impossible to derive a high school physics or chemistry course from the content included in the NGSS."
"In reality, we found virtually no mathematics in the physical science standards, even at the high school level, where it is essential to the learning of physics and chemistry. Rather, the standards seem to avoid the mathematical demands inherent in the subjects covered."
"A second troubling problem is that some topics are poorly covered—or omitted entirely—throughout the grades. Energy, and heat energy in particular, is a prime example of an important topic that is poorly addressed."
"Third, the NGSS also seem to shun precise scientific vocabulary, often resulting in muddled meaning."
"High school physical science content is virtually nonexistent. Entire areas that are fundamental to the understanding of physics and chemistry—and essential prerequisites for advanced study—are omitted. Among these are chemical formulas, chemical equations, the mole concept and its applications, kinematics, thermodynamics, and pretty much all of modern physics, including all of the advances of physics since about 1950, as well as their transformative engineering applications."
"Nor is energy ever covered with adequate depth and rigor (as explained further below). The idea of building on earlier non-rigorous ideas of energy and making them rigorous at the high school level is glaringly absent. "
"High school chemistry is largely absent from the NGSS. What little content is included is too often found in vaguely worded performance expectations that assume mastery of knowledge not previously introduced. The standards are further weakened by limitations found in the clarification statements and assessment boundaries, which place arbitrary caps on the knowledge and skills that will be assessed each year, as well as the near-total absence of mathematical relationships and problem solving, and the avoidance of appropriate scientific vocabulary."
"Nothing in NGSS might form a basis for the standard high school physics course, much less preparation for an “advanced” course in physics."
"We cannot discourse on the strengths of material that is absent."
3. Science appreciation, not science: One reviewer, Ze'ev Wurman testified before the Ohio House (http://educationnext.org/wurman-testimony-math-science-standards-ohio/) that the NGSS will create students who have an appreciation for science but who can't do science. His conclusion states:
"The proposed New Generation Science Standards are flawed and aimed at preparing science and technology consumers rather than technology creators. They offer a false promise of enhancing STEM [Science, Technology, Engineering, Math] preparedness..."
4. Before-the-fact Training: All public school districts and charter schools were invited to send staff to a training at Weber State in the Fall of 2014, (6 months PRIOR to the grade 6-8 standards being presented to the State Board for public comment) to receive training in these new science standards. Why train teachers/curriculum directors on something that might not happen? Why are these standards so incredible that it requires a full-day seminar, before the fact, to properly train everyone?
5. The adoption of the MOU for science test questions (just today) gives rise to similar concerns as the training. Most of those states involved (I assume, since I was unable to find the MOU previous to today, and haven't had a chance to read it), will have similar standards, and it is my assumption these standards are NGSS. As such, NGSS standards being used to write test questions leads to de facto standards adoption, whether Utah adopts NGSS or not. What is tested is what will be taught. We could keep our current science standards, but once we put NGSS test questions on our end-of-year tests, that is what will need to be taught to "prove" to the state our kids are learning.
I don't mean to be rude or controversial, but from the time it was raised by Board Member Burningham in 2010 that adoption of one set of national standards (Common Core for English and Math) would lead to adoption of national standards in all the other areas, we have seen this occur. There is no evidence that national standards yield better results than those that do not. (It's about 50:50.) What other standards did the science review committee look at? And if no others, why not?
Surely, there are many states that have science standards with a proven track record that are rated higher than Fordham's review of NGSS. In 2013, there were 20 states with higher standards than NGSS, as well as the NAEP, TIMSS and ACT Frameworks. Massachussetts' A-minus standards have, I believe, at least a 13-year track record and their tests are in the public domain. (I know this is true for English and Math, but will be looking to find out for science.) Are we interested in the BEST standards for our students, or do we want to have the SAME standards with most states? For me, the answer is clear: I would like the best! I have yet to find evidence (other than opinion) that NGSS will provide the best science education for our students.
QUESTIONS THE BOARD SHOULD ANSWER FOR ALL STANDARDS
Here are the questions I would like to see asked by this Board for every set of standards, both existing and proposed. I, personally, would appreciate receiving an answer to these questions, but understand if that isn't possible.
The Burden of Proof to adopt new standards needs to be on you, as our elected State Board members. Just because standards are "new" or the current standards are "old" isn't sufficient reason to assume that new is better. Often, tried and true, is the best scenario.
Additionally, since changing the math and English standards was voted down due to the hefty cost, why would we want to change other standards unnecessarily? Or will these standards not incur any additional cost? And if not, why not? (Incidentally, as you go knocking on doors for campaigns, you don't hear "We need new science standards!" You WILL hear tons of complaints about the math standards. If there isn't a desire in the board to address the math standards that a large group of parents think is broken beyond comprehension, I think we should be very wary about changing something that the people don't think is broken, like science.
1.) What is lacking in our current set of standards? Please be specific; don't just say 'they need to be updated'. With all due respect, if our previous standards were based on truth and objective fact, then, unless there have been changes, and science would be one of those areas where I would agree there are probably 'holes', there is no need to throw out the objective truth that we are already teaching. Can we simply 'tweak' what we have now?
2.) What is the evidence that the proposed set of standards will be able to fill those gaps in our current standards?
3.) Have the proposed standards been either pilot-tested (for how long, what were the demographics, what were the metrics used to show improvement) or, as a baseline, benchmarked against other states or countries that we feel confident have been successful with this particular discipline? (And what are those metrics?)
4.) Taken as a whole, over the course of 13 years, is there a prevailing worldview that emerges, and if so, is that worldview consistent with the diversity and the values of the citizens of this state? Do we seek to provide a broad, general knowledge, without influencing the attitudes, values, and beliefs of our students?
5.) What are the pieces that are missing from the proposed standards? For example, the NGSS do not address Life Systems, specifically body systems, or energy, or physics. Climate change is heavily emphasized, but electric circuits are briefly mentioned. While I appreciate both climate change and electric circuits being taught, it appears, at least to me, that there is an over-emphasis of one at the expense of others. It is usually easier to find problems in things that exist. It is much more difficult to take the time to determine what isn't even there.
6.) Do the standards seek to obtain compliance of thought, instead of an understanding of the rationale and disagreements involved in controversial or politically charged issues? This is especially important in science. If we create a generation of students who believe that all science is not to be questioned, we have failed in our task. Science is always to be questioned, and refined. We should be constantly looking for ways to support or to disprove the current knowledge of the day.
7.) Have you looked at some of the available curricular materials, as well as other states' implementations, to make sure that implementation of these standards, while supposedly wonderful in theory, won't fall flat in the application? My past experience with the adoption of new standards and 'programs' (over the last decade) has been a trail of grand promises and disappointing results that are always blamed on local districts and teachers. There has never been, or that anyone will admit, a set of bad standards. It's always blamed on poor implementation. With all due respect, if a set of standards can't be implemented successfully in at least 51% of the schools, then they should not be adopted, no matter what the claims and promises. (Please see item #3.)
8.) Is there enough emphasis on fact and foundational knowledge? There is a trend to focus on 'critical thinking' and to not get bogged down into rote memorization. While I can appreciate and respect that position, it is impossible to have critical thinking about any issue without the foundational, factual knowledge of the subject. Especially for children in the early grades who have limited abstraction and limited reasoning skills, are we allowing and encouraging those fact-based pieces of information that will form the foundation for greater understanding later on?
9.) Will these standards strengthen the parent-child relationship or hinder it? For example, implementing standards that parents don't understand or that place them in a negative light vis-a-vis their child, no matter how great they are supposed to be, creates a rift between parent and child. This is an unacceptable consequence for an education system that is supposed to be secondary and supportive to the primary role of the parent in educating his or her children. The more involved parents are, the better the academic success of the child. That is the number one factor in student success... the parent, not the standards. We need to keep that in mind.
Thank you for your time and effort, and my very great thanks if you made it all the way through this email.
Sincerely,
Wendy Hart
Mother
Alpine District Board Member (NOT speaking on behalf of my board) for ASD2
Business Owner
Highland, UT
Labels:
NGSS,
State Board of Education,
State Standards,
State Tests
Monday, January 22, 2018
Common Core IS NOT Dead, Board Goals, State Issues
A lot is going on in education. Most importantly, tomorrow, Tuesday, Jan. 23, our Board will have a retreat to set goals for the district for 2018. Please email me or reply on facebook with what goals you would like us to set. (I can bring up to 2 goals, but I would like to see all your thoughts.)
I'm going to give you a brief summary of what's going on Locally, Statewide and Nationally in education.
Local:
I, personally, have grave concerns with more tech in schools, especially with the emphasis on character traits and values, as evidenced by the 6 C's and the national ESSA (replacement for No Child Left Behind) requirements. More on ESSA below. Here is an interesting read on Critical Thinking that I agree with. https://www.memoriapress.com/articles/the-critical-thinking-skills-hoax/
2. The Board set up a Local Building Authority last meeting to facilitate paying for the rebuild of Scera Park Elementary in Orem without raising taxes or going through a bond. You can read more about it on my blog: https://wendy4asd.blogspot.com/2018/01/local-building-authority.html
3. This is an election year. 4 Alpine Board Seats will be up for election this year, as well as 1 State Board seat in our area. I would like to encourage everyone to take a moment and think seriously about running for office. The 4 ASD Seats are: Saratoga Springs/Eagle Mountain (currently held by Paula Hill who will not be running again), American Fork (currently held by John Burton), West Orem (currently held by JoDee Sundberg), and Highland/Alpine/Cedar Hills (currently my seat). As always, I welcome any and all to throw their hats into the ring. Civil public debate is the BEST way to get the best ideas working for our kids. The State Board seat is currently held by Joel Wright and covers most of ASD, except Orem and a small part out West. Government of the people, by the people and for the people requires not just a few people involved, but all of us. And the Founders expected that people would rotate their service in public office. The deadline to file is mid-March.
State:
I'm going to give you a brief summary of what's going on Locally, Statewide and Nationally in education.
Local:
- Board Retreat, setting Board Goals. Review of 21st Century Learning/STEAM schools. It is the school district's plan to convert all of our schools into 21st Century/STEAM schools. Right now, Cedar Ridge, Ridgeline and Highland (if I recall) in my area are all 21st Century Learning. This means more project-based learning, less memorization, more technology and a focus on the 6 C's: Collaboration, Communication, Critical Thinking, Creativity, Citizenship, Character.
I, personally, have grave concerns with more tech in schools, especially with the emphasis on character traits and values, as evidenced by the 6 C's and the national ESSA (replacement for No Child Left Behind) requirements. More on ESSA below. Here is an interesting read on Critical Thinking that I agree with. https://www.memoriapress.com/articles/the-critical-thinking-skills-hoax/
2. The Board set up a Local Building Authority last meeting to facilitate paying for the rebuild of Scera Park Elementary in Orem without raising taxes or going through a bond. You can read more about it on my blog: https://wendy4asd.blogspot.com/2018/01/local-building-authority.html
3. This is an election year. 4 Alpine Board Seats will be up for election this year, as well as 1 State Board seat in our area. I would like to encourage everyone to take a moment and think seriously about running for office. The 4 ASD Seats are: Saratoga Springs/Eagle Mountain (currently held by Paula Hill who will not be running again), American Fork (currently held by John Burton), West Orem (currently held by JoDee Sundberg), and Highland/Alpine/Cedar Hills (currently my seat). As always, I welcome any and all to throw their hats into the ring. Civil public debate is the BEST way to get the best ideas working for our kids. The State Board seat is currently held by Joel Wright and covers most of ASD, except Orem and a small part out West. Government of the people, by the people and for the people requires not just a few people involved, but all of us. And the Founders expected that people would rotate their service in public office. The deadline to file is mid-March.
- The State is close to releasing the new science standards for grades 5, 9-12. Since the Grade 6-8 standards are a rewording of the Next Generation Science Standards (NGSS), it is my personal belief that the Board will adopt, without hesitation, the NGSS for these grades as well. I have many concerns about these standards, but the biggest one is that Utah currently scores higher on ACT science than any state that also tests 100% of its juniors, not just those who self-select as wanting to go to college. (That means our scores will be lower, on average, than those states that let kids decide whether to take the ACT or not.) We also score higher than the national average on the science portion of the ACT. So, I'm unsure why we would adopt standards that show other states doing more poorly. Not to mention that the math is almost non-existent, as are body systems, chemistry and physics. Also, Utah's current science standards (except Grades 6-8) received a B grade. NGSS received a C from Fordham Foundation. You can read more by searching NGSS on my blog: https://wendy4asd.blogspot.com/search?q=ngss Here's the video from when we adopted Grades 6-8: https://wendy4asd.blogspot.com/2015/11/utahs-new-science-standards-national.html The arguments are the same. Please share with your friends and neighbors and ask them to contact the state board: board@schools.utah.gov to express their concern or their support. If you are supportive, I would love to know why and where the NGSS has worked and by what measures it has worked.
- The State's ESSA plan was rejected, in large part, due to our opting out of SAGE. Rather than finding out why parents don't want their kids to take SAGE, the Board is looking at renaming SAGE. They have hired a new testing vendor, Questar, to continue with the SAGE testing, but the terms of the proposal indicate we need to continue to use the same questions as SAGE. So, new vendor, same questions, new name.
- Associated with that, the State Board is deciding how they want to handle the ESSA rejection by the Feds. Please remember, when ESSA was being passed, everyone said that it returned Local Control of education to the states. Those of us who opposed it said that it wouldn't. What does everyone think now? The options are 1) Ask the US Dept of Ed for a waiver for the opt out provisions, 2) Tell the Feds we don't want their Title 1 money and ask the Legislature to make up the difference in funding (my preference) or 3) Change state law to REQUIRE parents to submit their kids to SAGE testing against their will (Land of the Free?) I have good reason to believe that if the State Board were to play their cards right, the Feds would be hard-pressed to hold back funding for the lowest socio-economic strata of kids in the lowest funded state in the nation. But they'll try.
- The Legislature is in session. 1300 bills opened about education, if I remember correctly. Please pay attention and email your legislators. I'm sure there will be a desire to limit opting out of SAGE testing and other measures designed to limit parents in their primary role of raising their kids.
Feds:
- ESSA requires a measurement for non-cognitive measures. Just watch how everything will be focused on things like GRIT and perseverance, as well as technology. The "nice" thing about technology is that you can have second-by-second information about your kid sent to a computer program to determine if your kid has the right attitudes, values and beliefs. The desire to have knowledge is over. "The most controversial issues of the twenty-first century will pertain to the ends and means of modifying human behavior and who shall determine them. The first educational question will not be 'what knowledge is of the most worth?' but 'what kinds of human beings do we wish to produce?' The possibilities virtually defy our imagination." (John I. Goodlad)
- Secretary DeVos declares the "Common Core is dead!" It's not. Not by a long shot, and that is in large part due to ESSA. You can read more about that here: https://truthinamericaneducation.com/common-core-state-standards/betsy-devos-aei-american-enterprise-institute/ Please share this information with friends and neighbors. Most BAD Educational ideas never die. They just get renamed, rebranded and shilled to the public again as the "latest and greatest" education silver bullet.
Local Building Authority
On January 9, 2018, our Alpine School Board decided to create a Local Building Authority (LBA). The main reason behind this is to rebuild Scera Park Elementary in Orem in order to consolidate that population of students with Hillcrest. Hillcrest will be closed but the property will be retained for future use. Since the original consolidation plan included many more schools and the possible sale of the Hillcrest property, the savings from those closures and the sale of the property would have allowed the Board to pay cash to rebuild Scera Park. As such, the savings from closing Hillcrest will be close to $800,000 each year, but insufficient to rebuild an school at the cost of $18M. So, the LBA was created to accomplish this goal.
An LBA is allowed under state law and allows the Board to finance things over time without using property tax increases as collateral for the debt. School districts in this state are not allowed to use a regular debt scenario like you and I do for a mortgage or a construction loan. We have to either pay everything off within a year (short-term loan) or use a tax-related funding process. We could also do something called a revenue loan which would work if we were building a rec center and we could use the fees (the revenue) from that rec center as the payment.
You can read all the information, including the By-Laws and the Articles of Incorporation here. (See Local Building Authority Mtg Documents.pdf) The LBA is subject to the same open meeting laws as the ASD Board, and all LBA meetings will be held at the same location and place as the ASD Board meetings, when an LBA meeting is required.
The essence is this. The ASD Board of Education (ASD Board) members automatically become the Board of Trustees of the Alpine Local Building Authority (LBA). So as members are elected and so forth, the make-up of the LBA changes accordingly. I had concerns about the ability of the LBA to remove board members and that language was removed from our documents. The action of the Board on the 9th simply created a non-profit corporation, the LBA. At the Jan. 23 meeting of the LBA, the proposal will be to seek a loan for the purpose of rebuilding Scera Park. The LBA gets the "mortgage" for Scera Park and the school is the collateral for the loan. The ASD Board then signs a lease with the LBA for Scera Park, paying the amount required to cover the cost of the Scera Park loan. Then the LBA gets the amount agreed to in the lease from the ASD Board and pays the lender for the Scera Park loan. The LBA, as a non-profit, makes no money in the transaction. The lease is also written so that upon payment of the loan in full, Scera Park will automatically transfer ownership from the LBA to the ASD Board. This allows the amount saved from consolidating Hillcrest of nearly $800,000 to be used, annually, to pay off, over time, the Scera Park rebuild.
My opinion of the Pros. The advantages I see are: 1) The Hillcrest consolidation savings are used to pay-off Scera Park. 2) There is no tax increase required for this transaction and the savings in one area of the budget can be used to pay for buildings. Currently, this could only be done if we chose to pay cash completely for the building. We could use our rainy-day fund to pay for Scera Park upfront, and then take 18 years to pay it back. That decreases our rainy-day fund by about 20% with no guarantee that it would be repaid. The decrease would also negatively impact our credit rating for future bond rates. 3) It allows for building construction to begin more quickly without going through a bond election and so forth. In theory, if we had the funds in the budget from savings in other areas, some of the West's growth could be accommodated by accelerating buildings without waiting for the bond cycle in 2020.
My opinion of the Cons. 1) The LBA only requires 24 hour notice for actions that regular board meetings are given. The LBA can go into debt for any number of buildings, additions, appurtenances either inside or outside the district boundaries with a simple majority vote by the LBA board (aka the ASD Board). 2) The Board could use the LBA to finance things that do not take precedence on a bond by the public. In short, it could skew our building priorities to reflect more internal priorities instead of those demanded by the people. Some of the things that might be financed by the LBA board which the public hasn't wanted to see in a bond would be: Clear Creek renovation, District Office renovation, etc. As long as there is a revenue stream that will cover the annual debt payments to the LBA, the Board can finance things as it sees fit. This is the essence of Local Control, but it also requires diligence from the people in making sure those who are elected to the Board have an understanding of what they should and shouldn't do in this arena.
By way of information, the following entities have set up LBAs.
Duchesne School District
Granite School District
Jordan School District
Morgan School District
Ogden School District
Piute School District
Sevier School District
South Sanpete School District
South Summit School District
Tooele School District
Uintah School District
Grand County
An LBA is allowed under state law and allows the Board to finance things over time without using property tax increases as collateral for the debt. School districts in this state are not allowed to use a regular debt scenario like you and I do for a mortgage or a construction loan. We have to either pay everything off within a year (short-term loan) or use a tax-related funding process. We could also do something called a revenue loan which would work if we were building a rec center and we could use the fees (the revenue) from that rec center as the payment.
You can read all the information, including the By-Laws and the Articles of Incorporation here. (See Local Building Authority Mtg Documents.pdf) The LBA is subject to the same open meeting laws as the ASD Board, and all LBA meetings will be held at the same location and place as the ASD Board meetings, when an LBA meeting is required.
The essence is this. The ASD Board of Education (ASD Board) members automatically become the Board of Trustees of the Alpine Local Building Authority (LBA). So as members are elected and so forth, the make-up of the LBA changes accordingly. I had concerns about the ability of the LBA to remove board members and that language was removed from our documents. The action of the Board on the 9th simply created a non-profit corporation, the LBA. At the Jan. 23 meeting of the LBA, the proposal will be to seek a loan for the purpose of rebuilding Scera Park. The LBA gets the "mortgage" for Scera Park and the school is the collateral for the loan. The ASD Board then signs a lease with the LBA for Scera Park, paying the amount required to cover the cost of the Scera Park loan. Then the LBA gets the amount agreed to in the lease from the ASD Board and pays the lender for the Scera Park loan. The LBA, as a non-profit, makes no money in the transaction. The lease is also written so that upon payment of the loan in full, Scera Park will automatically transfer ownership from the LBA to the ASD Board. This allows the amount saved from consolidating Hillcrest of nearly $800,000 to be used, annually, to pay off, over time, the Scera Park rebuild.
My opinion of the Pros. The advantages I see are: 1) The Hillcrest consolidation savings are used to pay-off Scera Park. 2) There is no tax increase required for this transaction and the savings in one area of the budget can be used to pay for buildings. Currently, this could only be done if we chose to pay cash completely for the building. We could use our rainy-day fund to pay for Scera Park upfront, and then take 18 years to pay it back. That decreases our rainy-day fund by about 20% with no guarantee that it would be repaid. The decrease would also negatively impact our credit rating for future bond rates. 3) It allows for building construction to begin more quickly without going through a bond election and so forth. In theory, if we had the funds in the budget from savings in other areas, some of the West's growth could be accommodated by accelerating buildings without waiting for the bond cycle in 2020.
My opinion of the Cons. 1) The LBA only requires 24 hour notice for actions that regular board meetings are given. The LBA can go into debt for any number of buildings, additions, appurtenances either inside or outside the district boundaries with a simple majority vote by the LBA board (aka the ASD Board). 2) The Board could use the LBA to finance things that do not take precedence on a bond by the public. In short, it could skew our building priorities to reflect more internal priorities instead of those demanded by the people. Some of the things that might be financed by the LBA board which the public hasn't wanted to see in a bond would be: Clear Creek renovation, District Office renovation, etc. As long as there is a revenue stream that will cover the annual debt payments to the LBA, the Board can finance things as it sees fit. This is the essence of Local Control, but it also requires diligence from the people in making sure those who are elected to the Board have an understanding of what they should and shouldn't do in this arena.
By way of information, the following entities have set up LBAs.
Duchesne School District
Granite School District
Jordan School District
Morgan School District
Ogden School District
Piute School District
Sevier School District
South Sanpete School District
South Summit School District
Tooele School District
Uintah School District
Grand County
Labels:
Board Meetings,
Bond,
Budget,
Local Building Authority
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