Fort Worth ISD debt load key to election

Posted Friday, Oct. 04, 2013  comments  Print Reprints
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norman A political action committee has been formed to raise questions about the Fort Worth school district’s $490 million, three-part bond package in the Nov. 5 elections, and its members are raising some good questions.

Some of the answers are readily available on the school district’s website. Other helpful information can be gained from other sources.

Members of the It’s OK to Say No to the School Bond PAC mailed registration papers to the district a week ago.

“It (the bond package) just seems like an exorbitant expense,” the group’s spokeswoman, Georgia Stapleton, told Star-Telegram reporters Diane Smith and Jessamy Brown.

It’s true that $490 million is a lot of money. Whether it’s exorbitant depends on the district’s genuine needs and how well it can afford to pay off the debt.

That’s what makes the group’s questions important, including how much debt the district is already carrying and whether it can afford more.

For information on that, turn to the district’s Comprehensive Annual Financial Report. As of June 2012, the latest report available, the district’s net outstanding debt was $678.8 million, down from $720 million a year earlier.

The outstanding amount was 26 percent of the debt the district is allowed to carry under state law, based on its assessed property values.

Members of the PAC — and all of the district’s voters and taxpayers — might be tempted to ask what’s the right amount of debt for Fort Worth ISD.

There’s no right answer. But a recent report to the district from the Richardson-based BOSC Inc. consulting firm provides helpful perspective. Its numbers are as of June 30 of this year.

BOSC measures the FWISD outstanding debt at $8,054 per student, compared to $36,514 per student at Frisco ISD, the highest in the region. Denton ISD is at $26,735; Keller $20,424; Dallas $15,470; Hurst-Euless-Bedford $13,850; and Arlington $7,119, the report says.

BOSC also looked at outstanding debt as a percentage of taxable property value. Fort Worth ISD is 17th on a list of 20 local districts, leveraging 2.42 percent of its property value.

Grand Prairie is highest at 10 percent; Mansfield 8.85 percent; Denton 6.53 percent; H-E-B 3.45 percent; Dallas 3.2 percent; and Arlington 2.32 percent.

Meanwhile, Fort Worth’s 28.2-cent tax rate for debt service compares to 50 cents in Allen, Keller, Mansfield and McKinney. Grand Prairie and Irving are at 42.5 cents; Birdville 39.5 cents; H-E-B 36.75 cents; and Arlington 26.1 cents. (Fort Worth’s rate would go up 3 cents if all bond proposals are approved.)

For its ratio of interest payments to outstanding principal on bonds, a pretty technical number but a good one to know, Fort Worth is 19th lowest out of 20 North Texas districts. Only Arlington is lower.

If the members of the new PAC want to be really helpful, they could explore a number that might be even more relevant to taxpayers. That would be what’s called “direct and overlapping debt.”

Every taxpayer’s home, and every piece of commercial property, sits in not just one but several taxing districts. In Fort Worth ISD, for example, they could be in any one of nine different cities and also pay taxes to Tarrant County, the Tarrant County Hospital District and the Tarrant County College District.

What’s important to each taxpayer is the total taxes they pay. The Comprehensive Annual Financial Report on the FWISD website has a helpful table on page 122.

It says direct and overlapping debt in the district amounts to 4.27 percent of taxable assessed property values.

Checking a few other Tarrant County school district websites shows Keller ISD at 5.5 percent, Arlington at 4.74 percent and H-E-B at 3.91 percent.

Putting it all together, it looks like Fort Worth ISD, compared to other districts, is in good shape on its debt.

Early voting for the Nov. 5 election starts Oct. 21. There’s plenty of time to get answers to questions.

Mike Norman is editorial director of the Star-Telegram. 817-390-7830 Twitter: @mnorman9

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