Letter: Bond debt should be based on wealth of communities

Posted 10/19/23

I recommend that the Bristol Warren Regional School District raise the local funds for the school construction program by having Bristol and Warren share it in proportion to their taxable property wealth as they would if the school district were issuing the bond.

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Letter: Bond debt should be based on wealth of communities

Posted

To the editor:

I have read that the Bristol Warren Regional School District needs to replace its high school and repair several of its other schools. While the state would pay up to 83% of the $200 million price, our towns would have to come up with the rest.

Since the school district cannot issue any financial bonds, Bristol & Warren would have to issue them. The cost to the towns would be $2,115,641 per year for 30 years. The school district is proposing that the towns share the cost by each town's percentage of the total student enrollment. In that scenario, Bristol's cost would be $1,315,506 and Warren's cost would $800,135 per year. However, Bristol's taxable property wealth per pupil is higher than Warren's. If the towns share the program's cost in proportion to their taxable property wealth, Bristol's share would be $1,449,989 and Warren's share would be $615,652 per year.

I recommend that the Bristol Warren Regional School District raise the local funds for the school construction program by having Bristol and Warren share it in proportion to their taxable property wealth as they would if the school district were issuing the bond.

The Warren Times-Gazette & the Bristol Phoenix each published a chart from the school district which shows the Projected Tax Impact for the its town. However, the chart in the Warren paper shows only the effect on Warren and the chart in the Bristol paper shows only the effect on Bristol. Both charts assume that the towns are sharing the bond costs in proportion to their student enrollment. Both papers say that Bristol's share of the $200 million bond cost would be 62.18% and Warren's share would be 37.82%. I reviewed taxable property wealth of the two towns in the RI Division of Municipal Finance table, "2021 Adjusted Equalized Weighted Assessed Valuation of RI municipalities". It shows that the full value based upon 2020 market value for Bristol is $4,047,190,712 and for Warren is $1,661,393,242. Bristol's share is 70.90% and Warren share is 29.10% of their combined taxable property wealth, which is $5,708,583,954.

The debt service for $200 million in bonds offered by PFM Financial Advisors LLC is a 30-year term and totals $63,469,241. When this number is divided by 30 years it is $2,115,641 per year. If the bond shares are based on enrollment, Bristol gains and Warren loses $184,483. If the bond shares are based on taxable property wealth, Warren gains and Bristol loses $184,483 per year.

Joanne DeVoe
King Street
Joanne DeVoe was employed as a Staff Specialist in the Finance Department of the Baltimore City Public Schools

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