SD2 hopeful voters will approve federal bonds

2010-08-17T18:18:00Z 2010-08-18T23:38:20Z SD2 hopeful voters will approve federal bondsROB ROGERS Of The Gazette Staff The Billings Gazette
August 17, 2010 6:18 pm  • 

Ballots arrive in the mail on Thursday, and Billings School District 2 officials are hoping for a miracle.

Available to the district if voters approve is $12 million in two federal, interest-free bonds. Ballots must be returned to the Yellowstone County elections office by Sept. 7.

And the pressure is on — more than half the cost of the bonds will be paid for by federal stimulus dollars and state funds. If voters don’t approve the bonds, the money will become available to another school district in Montana.

“If we don’t take advantage of this, another community will,” Trustee Kathy Aragon said.

The bond money is designated specifically for maintenance and construction projects, and the district has plenty. SD2 faces $123 million in deferred maintenance. District officials are eager to secure the money because the $12 million in bonds would only cost SD2 $5.5 million.

“This is a deal that we cannot pass up,” Trustee Joel Guthals said.

Trustee Connie Wardell sees the bonds simply as money for the community.

“The $12 million means a lot of jobs,” she said. “We’ll be generating jobs in our community.”

Rich Whitney, facilities director for the district, said his office will follow the state statute for bidding on construction projects, a process open to any contractor.

Historically, he said, bids have almost always been awarded to local or state contractors. The one exception, he said, was construction of Daylis Field, which went to a national company because there was no one in Montana at the time that could handle the project.

Even in that case, he said, the company ended up hiring almost all local subcontractors.

Bruce MacIntyre, director of government affairs for the Billings Chamber of Commerce and its liaison to the school district, said local companies right now are ready for work.

“There isn’t much in the pipeline,” he said. “They’re eager. They’re hungry.”

The projects proposed by the district — projects SD2 will be locked into by law if the bonds pass — include replacing the 70-year-old boiler at Senior High, replacing the roofs at 10 schools and replacing windows at seven schools. Also included is fire alarm system updates at four of the district oldest schools.

The projects were chosen specifically to help the district avoid “future catastrophic damage,” maximize utility savings and improve the learning environment for students at all its buildings across the city.

The updates to roofs, windows and boilers would save the district $94,435 a year in energy costs.

Skyview High, which sustained $1.3 million in damage to its roof in the June 20 tornado, was initially placed on the list. However, insurance may cover much of the cost of replacing the roof. If that happens, the board will remove the Skyview roof from its list and replace it with auditorium upgrades at its three high schools and roof repair for the locker rooms at Daylis Stadium.

Officials see the energy savings and the bonds’ price tag as one of the main selling points.

Under the program, the federal government would pay the interest on the bond and the district would pay back the principal.

Helping reduce the district’s debt load is a sinking fund that would accompany the bond. A sinking fund works by collecting the monthly payments the district would make on the loans over the 16 years and putting them into an account earning interest.

When the debt comes due, the district pays back the lump sum of what it owes from the sinking fund and then uses the interest it has earned to further pay down the loan. Because the district will have paid no interest on the bond money it borrowed, the interest collected from the sinking fund would reduce the money the district pays out of pocket to repay the loan.

In addition, there is a possibility of state assistance to help the district pay back the bond.

With the sinking fund and the state help, trustees are hopeful that, of the total $12 million borrowed, the district — and ultimately taxpayers — will have to pay back only about $5.5 million.

Based on that $5.5 million, a property owner with a $200,000 home would pay $8.66 a year in taxes for 16 years.

Trustees and school supporters have been cautious in the way they’ve approached pursuing the bond. Over the past decade, Billings voters have not been overwhelmingly supportive of district-pursued bonds and mill levies. Most recently, voters in May approved two of three mill levies worth $1.9 million, one of which, a technology levy for the high schools, passed by a scant 10 votes after a petition forced a recount.

Officials at the district have worried that pursuing a bond so quickly after winning the two mill levies could erode hard-earned voter trust.

“The good news,” MacIntyre said, “is the mood is exceptionally positive.”

Local businesses, real estate agents and service clubs have come out in support of the bonds because the money goes to facility upkeep.

“The business community understands taking care of your brick and mortar,” MacIntyre said. “They get it. And they get that were getting a lot bang for our buck.”

Still, time is short.

Supporters have roughly three weeks to bring voters on board, and MacIntyre said almost all of that campaigning will be done online.

“This is going to be primarily an e-mail campaign,” he said.

Organizers are calling the push “Renovate to Educate” and will focus on reaching out through online social media and e-mail. Board Chairwoman Barbara Bryan and Superintendent Keith Beeman have been meeting with groups around town to answer questions and build up support.

MacIntyre is cautiously optimistic that voters will support the bonds.

“Usually I get a lot of ‘I don’t like this because …,’” he said. “This time, I’m not hearing any of that.”


Contact Rob Rogers at or 657-1231.

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