PORT ANGELES — The estimated cost of replacing Port Angeles High School over the 25-year life of a proposed bond has dropped by more than $30 million thanks to lower-than-expected interest rates, Port Angeles School District officials told about 30 audience members at a Clallam County League of Women Voters forum.
Early estimates on the interest the district would pay over 25 years on a $98.25 million bond to replace the 62-year-old high school — if voters approve it Feb. 10 — was initially expected to cost $84 million.
However, interest rates have not increased as forecast, and so the estimated cost of interest over 25 years is now $53 million, Kelly Pearson, district director of finance and operations, said at the forum last Thursday.
The reduction in interest rates are also a result of an improvement in the school district’s credit rating, Pearson said.
DA Davidson, a Seattle investment and capital market firm serving as a consultant to the district, initially assumed that the interest rate would be 4.8 percent.
A report received early last week from the firm showed that the rate is currently 3.3 percent.
“It’s based on the prime rate,” said Steve Methner, co-chairman of Port Angeles Citizens for Education.
However, it is not possible to know exactly what the interest rate would be until the district actually borrows the money, he said.
A reduced interest rate would not affect the initial annual property tax rate, Methner said, but added that it could allow the tax rate to be reduced in future years since the district would be able to pay down the principal on the loan faster.
For such bonds, the interest is paid until it matures, when the principal is paid off.
Ballots will be mailed Wednesday for the Feb. 10 election.
The bond, including the cost of the interest, would cost property owners an estimated $2.06 per $1,000 of assessed valuation, based on 2014 property values.
Two existing bonds costing a total of 46 cents per $1,000 of assessments — one for the construction of Dry Creek Elementary School and another for the remodeling of Jefferson Elementary School — will expire at the end of this year, meaning taxpayers would see a difference of $1.60 per $1,000 on their 2016 tax bills, rather than the full $2.06, district officials said.
It would cost the owner of a $200,000 home $320 per year more than the current tax rate, or a total of $412 per year.
A 60 percent majority is required for voter passage of a school bond.
In addition, there must be a 40 percent voter turnout based on the number of votes cast in the school district in the November general election.
Approximately 60 percent of the $98.25 million is expected to pay for building construction, with 40 percent going to permits, soil testing and other requirements for planning and equipment.
The school district is asking voters to replace most of the high school buildings and refurbish the auditorium.
Only the 51,379-square-foot gymnasium complex would be left relatively untouched.
Voters also will be asked to approve a two-year renewal of the existing maintenance and operations levy for the school district.
The maintenance and operations levy funds building maintenance and continued operations of the school, including the music and athletics programs.
The present levy will expire in December.
The estimated tax rate would be $3.26 per $1,000 of assessed value.
The levy would collect $8.6 million in 2016 and $8.8 million in 2017.
The levy rate in 2013 — the rate at which taxes were collected in 2014 — was $3.23 per $1,000 assessed valuation.
Shelley Taylor, a Port Angeles School District resident, took part in the forum panel as the opposition voice.
The approximate $500 per $1,000 that the taxpayer would spend on the bond and the district’s maintenance and operation levy combined could make the difference for those who live on a fixed income, and could make the difference as to whether a grandparent may be able to afford to visit a grandchild, or if a parent can take their child to Disneyland, Taylor said.
She said she agreed that the school buildings need serious work, but disagreed that replacing the school for $98.25 million is the answer.
Taylor noted that if the bond passes, by the time the bond is paid off, the school will be halfway through its expected 40-60-year lifespan.
The district should instead spend its funds more efficiently, she said, and suggested a less expensive modular, prefabricated building process to replace those buildings that must be replaced.
Taylor also said that the district spends only 15 percent to 20 percent of its maintenance and operations levy for actual maintenance.
The district should spend more on maintenance to increase the lifespan of buildings and eliminate wasteful spending, she said.
State education funding should pay for these things and state timber funds should be restored, she said, and it should not be put on the back of local taxpayers.
Several audience members asked questions of the district and of Taylor.
Tom Butler, who identified himself as a parent of a student in the district, asked why the district was putting such value on the school buildings, when teachers’ connections to students and small class sizes make a much larger impact on learning.
Sydney Roberts, a Port Angeles High School junior who represented the school’s students at the forum, said that the condition of the school is interfering with education.
“We have no access to technology, to computers,” Roberts said, referring to the school infrastructure’s inability to support the electrical systems or computer systems required by modern educational tools.
Because of the difficulty of studying science subjects with the antiquated school systems available, she and many other students are transferring to the Running Start program at Peninsula College, where they take classes at the newly modernized college instead of the high school, she said.
Roberts said the high school chemistry class has had difficulty using water for laboratory experiments because the water is contaminated with mineral deposits from the piping system, and the biology classes cannot perform laboratory experiments at all because there are no laboratories available.
Recently a science teacher at the high school wanted to allow his class to take part in a video conference conversation with a NASA scientist to learn more about astronomy, but could not because the school’s system would not support the bandwidth, she said.
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Reporter Arwyn Rice can be reached at 360-452-2345, ext. 5070, or at arice@peninsuladailynews.com.
