Future Schools Board- Lease Revenue Bond 2021-23

The Wasatch School District (WSD) has been forcing this second high school on the taxpayers since 2018, even though we had just built a $80+ MIL Taj Mahal in 2009 that was supposed to last us 30+ years…. The 2019 $150 Mil high school bond failed mainly because the school board promised to add on classrooms to the existing high school first, as needed. Instead of that, the Wasatch School Board decided to build a second high school. After the bond failed, they started a Future Schools Project Advisory Board to create the perception that a group of Wasatch community leaders would help guide the school district to a more fiscally responsible compromise moving forward. That did not happen. In fact, the school board came out of that process with the EXACT same high school plan, even though a subgroup of committee members developed a plan to add onto the existing school (as promised) and would have saved the taxpayers at least $80-$100 MIL and it would have been completed 2 years earlier than a new high school.  Instead of giving the public a choice of projects, the School Board approved a $150 MIL Lease Revenue Bond in just 2 months to fund the whole project and circumvented the voter approval “problem”. Scroll back in time, and see GRAMA requests we conducted, and how this all started in October 2021 until lately where they passed the Lease Revenue Bond in August 2022, publicly sold it to the citizens as a good thing, and raised our taxes in August 2023, to increase their capital (slush) fund. But the bid to construct (see GRAMA request below) came in closer to $170 MIL, so how is the school board going to make up the difference?  Also, another benefit to the lease revenue bond is that the building specs have changed from what they told the public in 2022, and the citizens have no say.   Our WSD Budgets page is also a good reference during this time…. 

In 2023, the State Legislature heard about our furious taxpayers not having a say in the $150 Mil of debt that the Wasatch School Board voted to approve with the LRB, after the 2019 G.O. Bond failed. The Revenue and Taxation Interim Committee was very frustrated with the obvious voter bypass.  LEASE REVENUE BOND Legislative Committee Meeting from October 11, 2023 (click on #2 Lease revenue bonds, to prompt discussion) where the Wasatch School District was mentioned a few times (7:30, 20:20, 39:00 into recording) by legislators about their abuse of this process, when we voted down the 2019 new high school bond then our 5 member school board passed the lease revenue bond 3 years later for the same project. Randy Larsen was our bond attorney for this new North Fields high school, and testifies here. Keep in mind that general obligation (GO) bonds (that the voters get to decide, is guaranteed by the STATE. Lease revenue bonds are NOT. Also, a GO bond retires after it’s paid off, but lease revenue bonds do NOT, unless it is purposefully removed by the entity who originated it.

It must be noted here, that other school districts have had much more fiscally responsible options, or have been told by their citizens to cut costs (as the recent picture shows to the left) Costs have actually DECREASED since our alternative master plan proposal (scroll below to April 2022, in large video presentation) was done over 18 months ago, too. We discussed a rebuild of a “magnate or 9th grade building” next to our existing high school that would have been similar to this new school- See article-The NEW St. George, state of the art career tech high school.

May 3, 2023 and July 11, 2023 GRAMA requests of lease revenue bonds, all bond amortization schedules and high school construction bids.  WTPA -GRAMA request bid process 5-3-23      Lease Agreement-WSD Building Authority    150 M Bond Amort schedule-WSD Building Auth 9-20-22      150 M Bond purchase Agreement-WSD Building Authority 9-13-22  

 WTPA GRAMA- WSD bond schedules 7-11-23        ALL bond amortization schedules

NEW High School Construction Bid info-      Rule 33-7-802 Publicizing Awards      New High School Floor Plan 2023               Westland Bid- New HS 2022   Bud Mahas Bid- New HS 2022     Hughes Bid- New HS 2022    RFQ – Pre-Qualification of Contractors – New High School – Results Summary     RFQ Scoring Committee Results New High School      AIA Document A101 (Westland)- awarded contract 

Response from school district business administrator (GRAMA officer)

  1.  agreement contract between the Wasatch School District and the Building Authority – refer to document labeled “1 Master Lease Agreement”,
  2. lease revenue bond (lrb) contract with Building Authority – refer to document labeled “2 Bond Purchase Contract”,
  3. amortization schedule of LRB – refer to document labeled “3 amortization schedule”,
  4. Is there a pre-payment penalty on the LRB? What are the terms of payoff? – refer to document labeled “2 Bond Purchase Contract”,
  5. all bids submitted during new high school RFP – refer to documents labeled “4 Bud Mahas”, “5 Hughes General Contractors”, and “6 Westland Construction”,
  6. list of names of the bid process selection committee – refer to document labeled “7 RFQ Scoring Committee Results” and “8 RFQ Pre-qualification of Contractors”,
  7. bid evaluation documents completed by each selection committee member to score bids – this item is denied based on “9 R33-7-802” which is included in the link,
  8. reference checks of each bidder and their current building commitments besides the new high school – this item is denied based on “9 R33-7-802” which is included in the link,
  9. sq. ft. of new high school on bid day, and in final bid negotiation with all bidders – refer to document labeled “91 AIA Document A101 (Westland)”,
  10. contract with the bid winner, Westland – refer to document labeled “91 AIA Document A101 (Westland)”,
  11. copy of final building plans with details like room dimensions – refer to document labeled “92 New High School Floor Plan”,
  12. interest rate/money you actually “saved” the taxpayer with Lease Revenue Bond vs General Obligation Bond – this item is denied because no record exists that is responsive to the request.

Keith Johansen, Business Administrator, Wasatch County School District

**** The Citizens tried to file a referendum petition on this Lease Revenue vote, but it was mishandled by our Wasatch County Attorney, who happens to be the brother of the school superintendent. Petition Denied- Lease Rev Bond Petition denial- Wasatch Co Attn 8-9-22      Building Authority agenda notice- 6-9-22   LRB agenda notice- same day 6-14-22     It must be noted that this was immediately after school was let out for the summer and everyone was out of town, on vacation. The last the public heard from the school board was they were going to look over the newly released master plan and keep the Future Schools Project advisory board going to help determine the next steps. That didn’t happen. (scroll down to the bottom to see meeting of July 14, 2022)

The state code was vague in 2022, and it was not clear HOW to do the petition:        

17D-2-502. Required process for issuance of local building authority bonds —
Certification of petition signatures — Removal of signature.
(1) A local building authority may not issue bonds unless the creating local entity’s
governing body approves the issuance and terms of the bonds.
(2) (a) Before issuing bonds, the authority board of a local building authority shall give
public notice of the authority board’s intent to issue bonds.
(b) (i) A local building authority may not issue bonds without the approval of the
creating local entity’s voters if, within 30 days after the notice under Subsection (2)(a) is given,
a written petition requesting an election is filed with the local building authority, signed by at
least 20% of the active voters, as defined in Section 20A-1-102, within the creating local entity.
(ii) Each election under Subsection (2)(b)(i) shall be held as provided in Title 11,
Chapter 14, Local Government Bonding Act, in the same manner as an election for general
obligation bonds issued by the creating local entity.

     The County was not sure how to handle the petition, and tried to contact the Lt Governor’s office for some guidance, but didn’t hear back for a long time. Meanwhile the clock’s ticking….

Joey Granger <JGranger@wasatch.utah.gov>
Tracy Taylor;​ ​
Tue 7/19/2022 1:35 PM

I just wanted to check in with you two and let you know I’m still waiting on a little guidance from my contact at the state.  I think the application portion will be easy.  You can simply type it up with all of the applicable items referenced in the code and turn that in with a copy of the resolution. https://le.utah.gov/xcode/Title20A/Chapter7/20A-7-S602

I’ll be in touch!

Joey D. Granger,   Clerk/Auditor,   Wasatch County

_______________

7/22/22

Tracy,

I have forwarded the referendum petition of the WCSD lease revenue bonds to our attorney’s office for their guidance.  As the Budget Officer, I will be starting on the Fiscal Impact Statement today.

Best,

Joey D. Granger,   Clerk/Auditor,   Wasatch County

and many more emails were exchanged…..

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August 18, 2022- Lease Revenue Bond public hearing video     (Public comments start at 22:20, good comment at 45:20 but there are MANY more in the next 3 hours)  Fact Sheet on Lease Revenue Bonds

The Tale of Two Narratives– (click on pictures to enlarge)
This slide was presented at the 8-18-22 public hearing to show that our taxes wouldn’t go up due to this new lease revenue bond scheme. But they did not show the couple of previous years to 2023 where it would have shown that our taxes had already increased dramatically. (See our GRAMA request above 7-11-23 where you see  ALL bond amortization schedules to compare info). Here are the previous amortization schedules that we had to GRAMA request.
Also, here are 2 examples of the Wasatch School District’s public justification for the decision:
Due to unprecedented, rapidly rising interest rates, and in an effort to save millions in taxpayer money, the Wasatch County School District Board of Education voted on Thursday, July 14, 2022, to issue lease revenue bonds via its local building authority. These bonds, in combination with a general obligation bond, will be used to partially finance a new high school in the most fiscally responsible way to address the explosive growth in the county.
With the passing of the lease revenue bond resolution, the District will notice and hold a public hearing in conjunction with the regularly-scheduled August 18th Board meeting prior to bonds being issued.
Last month, the District’s surveyors, Y2 Analytics, polled more than 500 voters to measure their preference for funding the new high school, with data weighted to reflect the demographics of likely voters within Wasatch County School District, specifically in regard to age, gender, political party registration, and probability of voting in the November general election. For 78% of respondents, utilizing a combination of existing capital funds and lease revenue bonds was the preferred method.
In June, the Board voted to refund its 2014 general obligation bonds to shorten the life of the bonds for the current Wasatch High School so they can be paid off more quickly, saving $830,000 in the process. The final payment on the current high school bonds will be made in 2024. The lease revenue bond payments will begin in 2025 with a similar yearly payment. If a resident receives a higher Wasatch County tax bill, it would most likely be due to an increase in assessed value or market value on their property from the county, as part of the tax correction the county is undergoing. The property tax rate for Wasatch County School District is dropping by 20% from the current .008246 rate to .006635 in 2023.
The current estimate to build a second high school is $160M, including a contingency for possible increases in costs. The Board’s decision to fund most of the high school with lease revenue bonds was made at the recommendation of the District’s bond advisor and bond counsel, as issuing bonds immediately instead of waiting until February 2023 following a general bond election, will provide a savings of – conservatively – half an interest point, or $11.4M on $150M, based on escalating interest rates. A June 2022 survey of residents also identified lease revenue bonds as the preferred method for funding new construction.
As a result of hiring a third-party consultant to assist with a yearlong community-involved facilities master planning process, the Board has been presented with the recommendations below, with the number one priority surfaced as building a new high school as soon as possible:
It is currently the Board’s intention, depending on interest rates, to place a general obligation bond on the November 2022 ballot for the remainder of the cost of the second high school.
School districts can only fund new construction in one of two ways: By creating a local building authority to issue lease revenue bonds, which the Board did during its June 14th meeting, or by placing a resolution on November’s ballot to issue general obligation bonds. If a general obligation bond resolution passes, the bonds would be issued the following February. If lease revenue bonds are issued, the Board can take advantage of current interest rates and lock in that rate immediately.
“We are keenly aware of the burden taxpayers carry regarding school district funding, so we have been working tirelessly with our attorney and bond counsel to meet the needs of the growing student body without assessing additional taxes on our constituents,” said Board President Tom Hansen. “In funding the new high school by issuing lease revenue bonds, as provided for by state statute, we estimate a savings to our taxpayers of $10 – $45M, depending on how high interest rates go. We are confident this is the most fiscally responsible way to fund a second high school for our Valley.”
The Board is committed to continuing the committee process as plans move forward to build the new high school, with a Building Committee comprised of community members to be convened shortly.
The School Board will use existing funds out of the District’s budget to pay for a new high school. We will not ask the community for more money through a tax increase. We are paying off the current high school early to be able to do this. Also, because so many new homes have been built since the last bond failed in 2019, the District’s capital fund balance along with existing streams of debt-service revenue will generate enough money to pay the principle & interest on a new bond. Another important factor is that interest rates have been rising and will continue to go up until inflation stabilizes. For every 1% increase in interest rates, it will cost an additional $23M over the term of the loan to build the school. There is a sense of urgency to save as much money as possible while we still can by locking in the lowest available rate. This method of financing a new high school is what the community has asked for and is a win-win for education and tax payers. It’s a solution for all the community members who have said in the past, “we support schools, kids and education, but financially can’t take one more tax increase”. This is a plan everyone can and should support!

August 13, 2022- WTPA will always support the public’s RIGHT to vote on issues affecting our quality of life. This new postcard mailed by the Wasatch School District to Wasatch residents has some misinformation, or half truths. This lease revenue bond is a SLUSH FUND, and does not have earmarks on HOW the money will be spent. The term of this lease revenue bond is 30 YEARS, and the total amount will be more than $283 Million for one high school and a riskier investment than the usual general bond Fact Sheet- Lease Revenue Bonds, and the citizens do NOT get to vote!  We had members ON the Future Schools Project Committee as independent citizens, and witnessed the biased process of this FSP committee.(scroll down this page and read the details) 

CALL TO ACTION!  You NEED to attend this August 18, 2022 public hearing, and make sure you get in the room. It’s usually filled with school district support staff, and the other citizens have been left out in the hallway with nowhere to sit, or hear the discussion. That’s intentional…. please come IN the room. Don’t leave.

Click on postcard picture below to enlarge and see the RED question marks below with corrections:

?- The Future Schools Project Committee did NOT help create the final master plan by GSBS Architects. In fact, the FSP committee did not have ANY discussion nor input on the final high school plan presented to the school board as the preference of this group. As soon as GSBS Architects completed it, it was presented to the School Board. We asked the school district if we could at least SEE a copy before it was presented.

?- As stated above, the FSP committee did NOT get to make any recommendations, those were completely done by GSBS Architects who was hired (and paid for) by the school district.

?-  The June 2022 SURVEY was of 500 residents! Hardly a cross section of the community. 57% of voters rejected the 2019 high school bond, there was no indication by Y2 Analytics that 57% of these folks were included in the survey. Also, Y2 Analytics was the same company who did a survey before the 2019 bond election and told the school district the bond would pass easily. They were very wrong. Watch the video of study session where the survey was discussed and (42 mins into recording) lease revenue bonds and their new Building Authority were discussed, you be the judge.

To hear the TRUTH about this process, this video is A MUST SEE of Kevin Payne, a Midway City Councilman who was a Future Schools Project Committee member (who gave his report to the public officials at the below July Interlocal Meeting) He shared that the process was NOT as fair and unbiased as he had hoped. He was the Midway City Councilman who represented that City, and one of 5 people who did the Alternative Master Plan (below) and tried to work WITH the school district to give the public fiscally responsible options. Neither the school board, superintendent, or Randy Larsen (bond counsel), responded or answer any concerns on the Future Schools PROCESS. 

July 27, 2022 Wasatch School District attended the Interlocal Meeting of Local Public Officials to discuss financing the New High School in the North Fields that the voters denied in 2019. 

Here is the other video from this meeting, of the school district presenting their plan to build the $160 mil high school without the voters having a say and citizen comments, (but they don’t mention the other option that was presented to them in April, which they ignored)…. 

***April 2022–  See this sub-group’s Alternative Master Plan saving the public $80 MIL that was PRESENTED to the School District in April 2022, but was ignored. How does it differ from the School District’s proposal to build the second high school in the North Fields? 

1.YOUR taxes will be lower, 2. YOUR rights as voters and property owners will be protected.  3. It actually fixes the high school overcrowding issue the fastest. 4. Provide students with the most options for academic classes.


Click on this link- FULL ALTERNATIVE MASTER PLAN  for more detail. This would save the public $80 million NOW and will be executed MUCH faster than another high school.   It would save taxpayers $80 million JUST on the high school currently supported by the school board, yet would be even more academically rigorous for students than our current curriculum. You decide if you’d rather spend $160 Million on one high school, or the alternative proposal, which spreads $130 Million across the whole school district and affects all students equally.

The Alternative HIGH SCHOOL plan, from this presentation, showed up in the final GSBS Master Plan (scroll down below to see) but the one page of the final GSBS Master Plan shows how they weighted the options unfairly to make the School District’s $160 MIL North Fields high school come out on top -See the evaluation here: GSBS Evaluation pg- Master Plan 4-6-2022

*****Watch the actual meeting where the Alternative Plan was originally presented to the Wasatch School District on April 12, 2022.  The school board agreed back in April for this group to present the proposal to the public before the bond election in November, then last minute decided to pass the lease revenue bonds with little notice in July. Instead of letting the public know there was more than one option (theirs) that came out of the Future Schools Process, the school board instead sideswiped the public’s input and decided FOR the public what and how to pay for their high school in the North Fields, again.

July 14, 2022- The School Board just passed a “Lease Revenue Bond” (LRB) of $150 Million to build the same high school in the North Fields that the majority of voters rejected in 2019. Here’s the document they approved- Lease Revenue Bond Resolution  What the taxpayer needs to understand is that this resolution was passed by only 5 people in our community (the school board) to circumvent the public voting in November like the 2019 general bond.  Also, the term of this bond is 30 YEARS, in which the total amount will be more than $283 Million – for ONE high school!

Wasatch County is one of the highest taxed counties in Utah- 2020 Annual TAX Statistical Study  ***See specifically these pages 2020 Statistical Study- pg 37-39   (And this was before some of our property taxes doubled in the last 2 years)

Here’s a brief, initial summary of the issue (Click on picture to enlarge)

Here’s the video of school board meeting where the school board voted on this LRB, (towards the beginning of meeting) and how quickly they decided our fate. 

Also, read  about the process (below) that got us here, how some people in the community volunteered their precious time to come up with a master plan for the School District, and how that process went off the rails…. Then see a fiscally responsible option that the school board dismissed, and would not consider. 

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May 2022- Wasatch School District created the community advisory board called the “Future Schools Project” in October 2021. It was to get the necessary community involvement and input that did not happen in the  2019 $150 MIL Bond attempt. 

GSBS Architects was hired to guide the process, and well as compile the information and present the final master plan to the school board. Also,  Lindsey Ferrari, partner at Wilkinson Ferrari & Co. , handled the public relations and surveys.  The completed surveys were very telling on how most citizens feel about the school district’s handling of previous bonds, and what’s most important to them now.

Here’s one slide:

(click picture to enlarge)

Here’s the FINAL Master Plan to review. 

***COMPARE GSBS’ Master Plan with this separate proposal of an ALTERNATIVE MASTER PLAN then scroll down and read more about WHY the group did it.

This final Master Plan was presented on May 18, 2022 to the Wasatch School Board at their study session (go to 12:00 min into recording) and there was a quick summary report at the Regular Meeting with citizen comments afterwards. (starts at 8:15 min into recording, Only a few citizens had major concerns about the process and the thought of a school bond. Those citizens commented starting at 56:00).  

Here’s the main focus of this Master Plan, set by the Wasatch School Board to GSBS:

“In response to enrollment pressures, WCSD and the Wasatch County community initiated a facilities planning process that was community-vision driven. WCSD identified three primary goals for the process:
• Be innovative and forward-thinking as we plan for growth.
• Ensure that students reach their personal goals and become productive, contributing members of society.
• Create solutions that are efficient and financially responsible.”

The process of this master plan was a concern of some of the citizen participants from the start. There were meetings scheduled for the advisory, steering, and educator committees in November, December, and January.  After a few meetings had passed with only GSBS speaking to the advisory board for the duration of the meetings, and not much advisory board input and discussion, some citizens began to feel like it was a waste of time.  They then started to ask GSBS for more detailed information, like doing site visits to ALL the current buildings owned by the school district ( we saw 4 out of 9). Also, only after the citizens asked for another meeting to discuss all options (with other state school districts giving us their input on whether these options worked for parents, students and teachers) did we get to learn something from outside our own school district. We also asked for actual costs for construction, so there was a discussion on expanding the current high school wings and cafeteria with one contractor, Bud Mahas. We had some open houses at a few schools and some community gatherings, but the attendance was weak and not much public input was gathered.

Towards the end of the process, when GSBS was starting to sound like our work was done, it was clear to some of us that no innovative ideas were percolating from this group. We were tasked with bringing forth ideas and recommendations ultimately to the school board, and none were even allowed to be discussed. Anytime someone wanted to talk about timely research on certain policies of school size or construction, or concrete ideas about fiscally responsible ways to handle current and future growth, the conversations were stopped. That was a major concern for a few of us, so we  decided to take it upon ourselves to meet outside the formal process and do our own alternative master plan to present to the school district and advisory board. The superintendent in the march 3rd meeting did say that if anyone had another proposal to bring it to the group though, so that’s what we did. 

Here is more data presented to the Future Schools Advisory Board during the 6 month process: 

FSP- Student Growth Projections 12-22-2021   FSP- Wasatch Co Census demographics-2021     FSP- WSD grade configurations 2021       FSP-Education best practices 2022

Wasatch School District expiration of future bond payments – WSD- bond schedule 2022   The best way to keep taxes down while trying to build more schools is WAITING and timing the new bonds to happen when old bonds are completed and paid off.

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This website is for educational purposes only, unless it is specifically stated that WTPA has a stance on a specific issue. To the best of our knowledge this is correct information, but we welcome corrections if errors are found.

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