The Wasatch County school board voted unanimously to issue lease revenue bonds worth $150 million. The district won’t need voter approval for those, but will hold a public hearing to hear resident input. That’s scheduled for the school board meeting on August 18.
Lease revenue bonds are an increasingly common way for governments to pay for construction projects without asking voters to pay new taxes. They can be repaid with the district’s various existing revenue sources, namely property taxes.
The district estimates a new high school will cost around $160 million, including a 5% contingency fee. It plans to ask the public to vote in November on covering the remaining $10 million with general obligation bonds, which do require voter approval.
Superintendent Paul Sweat says the planned timeline is to secure funding this year and begin construction next spring. Under the best-case scenario, he says the school would be open in fall 2025, but designs are still under review.
Board member Cory Holmes says the Federal Reserve is expected to raise loan interest rates in the months to come to combat inflation.
“The difference is, if we do a lease revenue bond, and this is really what motivated us, we can lock that rate in in August,” Holmes says. “But if we wait and run a general obligation bond, and pass that in November, we can't lock that interest rate until late January or February. We anticipated that would be quite a bit more than what the lease revenue bond is now.”
The district’s payments on the debt for the current Wasatch High School end in 2024, and Sweat says the lease revenue bond payments will begin in 2025. He says people overall shouldn’t experience significant increases from one year to another when that happens.
After conducting a master facilities plan study over the past year, a consultant firm GSBS Architects recommended building a new high school as soon as possible, a new elementary school in the next five years, and a new middle school within the next 20 years.
Wasatch County isn’t the only local school district financing construction through this method.
The Park City School District authorized $42 million in lease revenue bonds earlier this year. That money was added to $79 million of general obligation bond money voters approved last November and is being used for district-wide facilities expansions and upgrades.
