Agenda - 02-03-1992 - Laserfiche WebLink

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The timing of the referendum is perhaps the more dlfflcutt and more important issue at this time. I am aware that the poll indicated that a majority of voters would rather that we have a November referendum, rather than a May referendum. In my view it would be a serious error to delay the bond until May. First, in practicality, the 6 months delay could hold us up almost a year in occupancy. We need the space before its scheduled completion, so any delay could cause significant problems, Secondly, one reason that I supported this compromise that delayed the elementary school that we need Is just to get this construction process started. If classrooms are built anywhere In the system, at any grade level, it helps us have flexibility in dealing with overcrowding at other grade levels. Thus, if we have extra space for a year or two at the middle school level, it could help us with overcrowding at the elementary level. Please do not delay the bond, as it could then have twice the effect on future overcrowding at the elementary school level. A third reason not to delay construction relates to the two major economic points in favor of construction now. First, interest rates are at the lowest level that they have been in the past 13 years, as shown by the attached graph and table for U.S. Treasury rates. In the past year alone, rates have declined by 2% to 3%. 1 believe that Ralph Warren had some estimates that for a $25 million 20 -year bond, every saving of 0.5°% resulted in about $1.5 million of total interest savings. With the amount at $50 million and the rates lowered by 2% to 3% from past years, the interest savings could be of the order of magnitude of an elementary school. A fourth reason for a May referendum is that building costs now are very low in relation to those in the past several years, due to the soft economy. As today's Wall points out, the economy may now be strengthening. The Implication is that those low costs may not last too long. The cost for delaying 6 months could be quite large as construction costs are quite large. Financial futures markets show that investors already expect interest rates to increase by about 0.5% between September and December of 1992, as the election pressures for low rates abate. Thus, for all of these reasons, I think that going with a May bond is very prudent. If voters were fully cognizant of these points, I think they would support the May referendum. We Board members and concerned citizens will make those points to the voters. Please let us go for May. Whatever you do, you can be assured that I and many others appreciate your efforts on behalf of our schools. We will support the bond referendum. Thank you very much. Now I'M off to teach class. I'll see you tonight[