The board of education has said the current, 47-year-old North Summit High School isn’t safe.
“One earthquake like was in Magna, and we've been told we're in trouble,” board president Vern Williams said Nov. 13. “And I hate to say it, but we're sitting on a pretty decent fault.”
So board members put a $114 million bond on the 2024 ballot. 56% of voters rejected it.
Click here for election results.
Now, the board feels like it’s between a rock and a hard place, and members expressed regret at their Nov. 13 meeting they may not have communicated that to the public.
“I've told a lot of people that's called me or visited with me: it's either put it on [the ballot] next year or do it now on a lease revenue [bond],” board member Susan Richins said. “‘Oh, well, we didn't know that that would be your options.’ Well, that's our options, because the building is not holding up.”
The bond voters rejected would have been added directly to North Summit residents’ property tax bills. The other option is a lease revenue bond, or LRB.
That’s where the school board creates a separate entity, called a “local building authority” to issue the bonds. The school district pays the building authority back for the bonds with money from property taxes anyway — effectively, LRBs are the district going in debt to itself.
And LRBs don’t require voter approval. It's the same tool the Wasatch County School District used to fund its new high school in 2022 after its bond failed in 2019.
The North Summit board had district business administrator Marci Sargent make a presentation on the different options after its own failed election.
The upshot is the longer the board waits to issue a bond, the more expensive it gets, because of both inflation and uncertain interest rates.
“It’s a possibility that they will come down in the future, but right now, they're holding steady around that 3.8 and 4%,” Sargent said, which she added is not in the district’s favor.
Interest rates on LRBs are generally higher than normal property tax bonds, called “general obligation” bonds. The latter is backed by the “full faith and credit” of the government, but LRBs aren’t.
The board hasn’t decided which route it will take, but it’s convinced the current high school must eventually be replaced.
It decided to deliberate for a couple more months to avoid the appearance of, as Superintendent Jerre Holmes called it, a “knee-jerk” reaction to the election.
“I know that it would be damaging, probably, to all of us, but in the long run, we would be saving everyone money,” he said.
Board members voted to form the local building authority Nov. 13. That’s not the same as deciding to issue lease revenue bonds, but it is the preliminary step that allows them to issue bonds immediately at their next meeting in January.
