The Board of Trustees unanimously approved to call for a $140 million bond referendum based upon the recommendations of the 21-member Community Focused Committee, which spent five months studying current and future district needs and prioritizing their findings as follows:
The proposed bond package includes projects that address the Community Focused Committee’s prioritized findings. Proposed renovations and upgrades include districtwide improvements in the following areas:
A bond is similar to a home mortgage. It is a contract to repay borrowed money with interest over time. Bonds are sold by a school district to competing lenders to raise funds to pay for the costs of construction, renovations, and equipment. Most school districts in Texas utilize bonds to finance renovations, new facilities, and the purchase of technology and buses. State and Federal funding does not cover these costs.
SAFETY & ADA UPGRADES
TESTING CENTER
FINE ARTS REMODEL
ATHLETIC UPGRADES
NEW ELEMENTARY
CULLENDER & TATOM UPGRADES
The law provides that a school district must hold an election and get permission from voters to sell bonds and to levy taxes to pay for them. Bonds are sold to provide funding for capital improvements that last for a number of years. Such investments are too large to be included in annual operating budgets. Just as an individual agrees to repay a new home loan, voters authorize the District to sell and repay bonds for making major capital improvements. School boards can only levy I&S taxes in the amount necessary to repay the bonds. If the amount needed to pay the bonds is less, the district taxes less.
Bond money may be used for new schools and facilities, expansion and renovations of existing facilities, furniture, technology, equipment, buses, and the purchase of land for new school sites. Bond funds are restricted to these uses.
Bond money can only be used for capital improvements and related costs. They may not be used for employee salaries, utilities, and other day to day operating expenses.
Funding for Texas’s public schools comes from three main sources: local property taxes, state funds, and federal funds. The majority of funding for Monahans-Wickett-Pyote ISD comes from local property taxes.
A school district’s property tax rate is comprised of a Maintenance and Operations (M&O) tax rate and an Interest & Sinking (I&S) tax rate. As its name suggests, the M&O tax rate provides funds for the daily operational costs of a school district. The I&S tax rate provides funds for payments on the voter approved debt that finances a district’s facilities. The current total tax rate for Monahans-Wickett-Pyote ISD is $1.12.
The district’s current M&O tax rate is $0.97 and cannot, in the future, exceed $1.04 without a tax ratification election. The revenue generated from this tax rate pays for salaries, utilities, furniture, supplies, food, gasoline, etc. For the average citizen, this is similar to house repairs, car fuel, groceries, cleaning supplies, utilities, etc. However, a school district is a people-intensive business and the largest portion of these funds are budgeted for personnel costs.
The district’s current I&S tax rate is $0.14 and is often called the debt service tax rate. Funds generated from this tax rate go toward paying off the debt generated by the issuance of school bonds. For the average citizen, this is similar to a new home purchase, home renovations, land purchase, new kitchen appliances, etc. School bonds are issued as funds are needed for approved school projects and are generally not issued all at once. Most school bonds are issued or paid for over 25 years. However, the repayment period for short term assets, such as technology items, are paid off much more quickly.
The recapture rate for Monahans-Wickett-Pyote ISD during the years of 2005-2018 averaged 14.27% of the total maintenance and operation budget indicating that for every $100 of taxable value the district was required to send $14.27 back to the state. During these years, MWPISD paid $30,336,598 in Chapter 41 recapture payments. The largest percentage of Chapter 41 recapture occurred during the 2015-16 school year when the district collected $27,532,207 of taxable value but returned $7,565,407 back to the state of Texas – a 27.48% recapture payment.
With the increase in the current oil/gas economy, it is projected that Monahans-Wickett-Pyote ISD will make the following recapture payments to the state for the next three years:
2019-2020: $3,297,438 16.01% of the collected taxable revenue
2020-2021: $4,206,975 19.30% of the collected taxable revenue
2021-2022: $5,162,393 22.95% of the collected taxable revenue
These projections indicate that for every $100 of ad valorem tax revenue collected the district will have to return $19.39 back to the state as part of the Chapter 41 recapture funding plan. Although the district will collect $60 million in taxes over these three years; due to Chapter 41, the “Robin Hood” plan, the state of Texas will recapture $12.7 million from the district.
The bond program takes the pressure off of the District's Maintenance and Operations (M&O) budget, which is used to pay for day-to-day expenses, such as teacher salaries, as well as campus utilities.
On the M&O side, it is projected for every $1 collected from taxpayers over the next three years, Monahans-Wickett-Pyote ISD will keep approximately $0.80, because MWPISD is categorized by the state as a "property wealthy" district. The loss of $0.20 for every $1 collected means less revenue for maintaining and operating the school district.
However, on the bond side, for every $1 received, Monahans-Wickett-Pyote ISD keeps 100 percent of the collected ad valorem taxes. Bond money cannot be used for teacher salaries; however, bond money can be used to pay for certain capital expenses that might otherwise be funded from M&O money, so that more M&O funds are available for salaries.
In simpler terms, for every $1 of taxable value collected to pay for the bond, 100% remains in the district and is not eligible for recapture by the state government.
The total amount of the proposed bond package is $140 million. The proposal will benefit every student, campus and department served in the Monahans-Wickett-Pyote ISD and will address the prioritized list of needs established by the Community Focused Committee.
In 2015, the District engaged Parkhill Smith & Cooper to perform an extensive assessment of all of the district’s facilities. This assessment included 5-year and 6 to 20-year cost projections to address safety and security, educational adequacy, growth and capital renewal.
In September 2018, the Community Focused Committee, a 21-member group of concerned citizens, was formed to address the needs of the district and study the possibility of calling for a bond to address these needs. This committee was presented the 2015 Facilities Assessment and discovered that in order to simply upgrade district facilities to current educational standards the cost would be $79.2 million. However, this amount would not address future needs/concerns. The committee was focused on providing district facilities which would meet the needs of today’s learners, as well as those being served over the next 40-50 years.
After five months of concentrated work, the Community Focused Committee presented a final proposal to the Monahans-Wickett-Pyote ISD Board of Trustees which best met the group’s desire to address future generations of students and their prioritized list of the following needs:
Based upon this proposal, the MWPISD Board of Trustees unanimously called for a bond election during their regular meeting of January 21, 2019.
The bonds may be sold anywhere from 45-60 days after the bond election. Generally, once a bond issue passes, the architects begin the design work and the bid process. Construction itself will begin several months after the election.
The school district is responsible for sharing with voter’s information about the proposed bond package so the community can make an informed decision at the polls.
Citizens of the Monahans-Wickett-Pyote ISD approved a $30 million bond in 2006, 13 years ago, to address the district’s academic facilities. The current I&S rate needed to meet the required 2006 bond payments is $0.14. This bond will be paid off in 2026.
Due to the district’s strong fiscal management, several construction and renovation projects in Monahans-Wickett-Pyote ISD have been paid for out of Fund Balance or by private donations, including:
Property taxes for citizens 65 years or older who have filed the “Over 65 Homestead Exemption” will not increase because of the bond proposal. Under the “Over 65 Homestead Exemption” taxes are frozen at the dollar amount of the year the individual turned 65 and regardless of future tax rate increases, the tax levy for the 65-year-old can never escalate beyond the ceiling dollar amount. If decreases in property value, tax rate declines, or change in exemptions cause the tax levy to fall below the ceiling amount, the over 65 taxpayers will pay the lower tax bill.
If voters approve the bond election, the estimated tax impact of this bond is anticipated to be $0.36 for a total tax rate of $1.47 – M&O tax rate of $0.97 + I&S tax rate of $0.50. For the average MWPISD home valued at approximately $100,000, this represents an increase of $22.00 per month. The monthly investment for each project is $6.95 for elementary schools, $12.54 for the high school, $1.11 for junior high, $0.98 for career & technology and $ $0.42 for technology and modern learning.