August 3, 2022 1051 PM
MARFA — The Marfa Independent School Board of Trustees held a community bond meeting Monday, where members of the community received critical information about the district’s existing bond payments and how a new bond to fund large-scale infrastructure projects would affect local taxpayers.
Around 15 citizens showed up, some new and some returning, to ask tough questions about the feasibility of passing a $50 to $60 million school bond during a time of national economic strain due to inflation, statewide hikes in property taxes, and local concerns over declining enrollment and affordable housing. School board members said they were unified in supporting the bond — specifically the construction of a brand new kindergarten-through-12th grade campus.
School Board President Teresa Nuñez said the bond project was about bringing the community together by creating a public school for all of Marfa, a venue that could be designed with public green spaces and host community events. She said the old adage of “new versus old Marfa” needed to be overcome and a new school would benefit the entire population.
“We do need to get rid of that term, the old and the new. We do. Because we are Marfa. We’re not old, we’re not new: we are Marfa. That’s where we come together. We build it. And that’s how we promote us,” said Nuñez.
Board Member Yolanda Jurado added that the kids attending public school in Marfa deserved upgraded facilities.
“We absolutely believe that we need a bond. It’s time for us to move forward. Our children deserve that. Our community deserves that,” she said.
In order to get the bond on the ballot for the upcoming November General Election, the district is required to call the election by a deadline of August 22 and has been hosting public meetings throughout the summer in order to spread awareness about the district’s deteriorating facilities. In an interview with The Big Bend Sentinel following Monday’s meeting, Superintendent Oscar Aguero said attendance at the meetings could have been greater, but he was thankful for those who showed up to ask difficult questions on Monday night, and the district believes they got a good sense of community feedback.
Voters will decide on whether to greenlight a bond dollar amount — but how the money will be used, whether for renovations or new construction, will be determined later during the design process if the bond passes.
The main option being discussed is the construction of a new K-12 school that would cost around $44 million dollars, including demolitions. Additional renovations across other areas of the campus the district could work toward achieving over time, similar to a master plan process, would up the cost to as much as $57 million. (The numbers provided are in today’s dollars and do not account for inflation.)
At Monday night’s meeting, it was revealed that the district could request voters authorize $50 to $60 million in bonds, though the $50 million option would allow the district to issue the bonds over a two-year period and stay within their interest and sinking (I&S) tax limit per Texas state law, while the $60 million would exceed the rate limit, meaning bonds would have to be issued over a longer period of time.
An exact dollar amount for the bond has yet to be determined but will be very soon, as the district will need to finalize a number in order to get the proposal on the ballot this fall. The district has, however, recently provided preliminary numbers to give homeowners an idea of how much their property taxes would increase as a result of the bond passing.
Duane Westerman of SAMCO Capital, the district’s bond advisor with whom they have been working since the early 2000s, explained that a $200,000 home, for example, would see an annual increase in $560, or monthly increase of $46.67, in their property tax bill. For a $100,000 home, rates would increase to $210 annually and $17.50 a month. The home values are based on full values, not taking into account the $40,000 homestead exemption, but the tax impact calculations do take the exemption into account. While, like the bond amount, payment terms for the bond are to be determined, the district’s financial advisors projected with 5.2% interest rate, a $50 to $60 million dollar bond could be paid off over 30 years. The bond will be insured through The Texas Permanent School Fund.
Homeowners may apply for homestead exemptions for their primary residences only. In an interview with The Big Bend Sentinel, Cynthia Ramirez, chief appraiser for the Presidio County Appraisal District, said the average cost of a home in Marfa is currently $280,680.
Homeowners 65 and older qualify to have their school district property taxes frozen, meaning they will not increase as long as no significant improvements or projects that add on square footage are made on their land. However, it only applies to primary residences which must also be homesteaded. Ramirez said the majority of homeowners who qualify for the freeze in Marfa are already receiving the benefit, but citizens wishing to apply may visit the appraisal office.
The Texas Education Agency sets limits for the school district’s tax rates, which consist of maintenance and operations (M&O) and interest and sinking (I&S) rates. The district’s I&S tax rate, which is currently 15 cents per $100 of property valuation, provides funds for payments on debt that finance the district’s facilities. The TEA prevents MISD from raising the I&S tax rate above 50 cents per $100 of property valuation. In order to borrow the maximum amount, the district will likely max out the tax rate, raising it from 15 cents to a total of 50 cents, which allows them to borrow around $50 million dollars.
The $50 million the district would owe would be in addition to the two pre-existing bonds they are still in the process of paying off. One bond, which passed in 2003, added a new junior high school wing and science classrooms to the existing high school. Plans to eventually demolish the addition, which is experiencing leaks and floor buckling, have been discussed. A 2007 bond was used to build two gyms, the Shorthorn Gym and Hibbits Gym for the elementary school. The district’s total outstanding debt for those two projects totals just under $6 million — $4,685,000 in principal and $1,309,753 in interest. If the district continues to pay off the loans at its current rate — using I&S fund balance money to raise the payment amount from 15 to 16 cents — it is set to pay off the existing bonds by 2036.
Skyrocketing property values were a topic of conversation at Monday night’s meeting — in Marfa, those values have seen an average increase of 361% since 2014, according to the PCAD. Aguero said the board was aware of the unfortunate situation, but it was ultimately out of their hands. He did note that if values continued to rise it could, in theory, allow them to lower the I&S tax rate per household in the future.
Under Texas law, school districts which are considered to be property-wealthy — which includes MISD — are required to send “excess” property tax revenue to the state for redistribution amongst all school districts. Referred to as “Robin Hood,” the law draws funds from the district’s M&O pot. Aguero said this year MISD was expecting to pay back $1.5 million to the state because of this law. Because I&S money is kept by the district, it is beneficial to try and spend I&S money on things that would typically come out of M&O funds, like a new bus, and roll them into a bond proposal. MISD’s bond to fund a new K-12 school, for example, would include the purchase of all new technological equipment, which would normally have to be purchased with M&O funds.
Marfa parent Vince Fuentez asked what an average cost per year would be for keeping the district’s current facilities running as is. Aguero estimated a $279,000 yearly budget, not including all bills, and said just this summer their projects to improve the look and feel of the schools amounted to $89,000 — this included fixing up rental housing, the high school office and reception area, replacing ceiling tiles, updating gym lights, making safety improvements and more. A new campus would alleviate the hefty maintenance costs the district is currently paying to upkeep facilities, said Aguero.
Max Kabat, Marfa resident and publisher of The Big Bend Sentinel, asked whether the district was aware of a small town similar to Marfa with a tourism-based economy that passed a bond for a new school that MISD could use as a case study. Aguero said he was not aware of any. Unlike smaller rural school districts in Texas that may have highly profitable energy industries, he continued, Marfa’s lack of industry and jobs presented unique challenges.
“I think we’re kind of the anomaly. We don’t have the gas, we don’t have the oil, we don’t have the wind that makes up that money. For us, we are honestly asking our community to fund this,” said Aguero. “We’ve been building and repairing as much as we can, and we’re hoping that the community understands that at some time it’s a need.”
Questions as to the history of the district’s enrollment were also broached by Marfa resident Sterry Butcher. Aguero said enrollment had been declining since the ‘80s and ‘90s, steadily falling from 700 students to its current population of 269. He said the potential new school was appropriately sized, holding a maximum of 300 students, and they were hoping the new facility would help keep and attract more students in the future.
If the bond passes, the junior high and high school campus will be used to house all students during construction of the new school which would take around three years to complete, including the design phase. The cafeteria air conditioning, which is on a swamp cooler system, will need to be repaired or replaced in the interim, said Aguero, since that facility will continue to be used.
A bond committee, which would spend 10 months designing new facilities and soliciting teacher and community input, will be established should the bond pass. Aguero said the community is still welcome to visit the district’s facilities to see the situation for themselves, and with a number of events taking place at the school for the start of the year, administrators would be available to show people around if they are interested.
“I’m open to anyone who wants to come and talk to say, ‘How does this work? How’s it going to affect me?’” said Aguero.