Ignacio School District's assessed valuation for 2017 is down almost 40 percent because of oil and gas, Superintendent Rocco Fuschetto advised the school board Monday night. So the mill levy to repay school construction bonds needs to increase.
The 2015 mill levy (paid in 2016) totaled 12.436 for both general operations and bond repayment, he said. Bond repayment accounted for 7.9 mills out of that.
The district doesn't control its general fund mill levy. "The state says how much we have to raise, and they back-fill what we are short," Fuschetto said.
The district controls the bond levy. The bond repayment each year is around $3.2 million, he told the Times. To bring that amount in 2017 with the much lower assessed valuation, the bond mill levy needs to be 10.988 mills, Fuschetto said. That's actually a bit lower than the 11-plus mills projected after preliminary assessed valuations were released in late August. The district got its final assessed valuation from the county assessor last Friday, and it had increased a bit, he said.
The preliminary assessed valuation prompted the district to refinance $8.9 million worth of bonds in October that could be refinanced after five years, achieving a 13-year savings of around $849,000, Fuschetto said. More bonds could be refinanced in 2017, depending on interest rates.
The bond repayment budget includes a rainy day fund that currently has around $2 million in it, Fuschetto said. He proposed using $500,000 of that to reduce the bond mill levy to 9.5 for taxes due 2017, plus 6.035 mills for general operations. That means a total mill levy of 15.535. It means about $50 more on a $200,000 house.
If the district's assessed valuation doesn't go up for 2018, Fuschetto said he might recommend taking another $300,000 from the rainy day fund.
But he indicated some hope that assessed valuation might go up if natural gas prices were to go up. "That's just being optimistic," he told the Times.
He said the bond mill levy brings in somewhat more each year than the bond repayment. That extra has gone into the rainy day fund and can only be used for the bonds.
The latest decrease in assessed valuation follows several years of decreases.
"When I came here seven years ago, we were $800 million. We're down to $292 million," Fuschetto said. "Down the road, I can see that we may have to ask voters to increase the mill levy for operations," he said but indicated that might be after some of the bonds are paid off.
"We'll see what the state does for funding," he said. "If they keep cutting and operations (costs) keep going up, we have to do something."
He's been talking with the district's bond advisor and the Colorado Department of Education about the big drop in valuation. He wants to clarify with them how much money can be kept in the rainy day fund, also what the savings would be to pay off bonds early.
Early pay-off would come from the rainy day fund, he told the Times.
The board voted 4-1 to certify the 2016 mill levy (payable in 2017) at 15.535. Doug Little voted no.
