At the March 16 Kingwood Super Neighborhood Council meeting, Marques Holmes, board member of Humble ISD, presented a slide presentation about the proposed $775 million bond authorization to be voted on for approval by district taxpayers May 7. The presentation included answers to a Houston city councilman’s question during the February SNC meeting about why the district was stating the referendum involved no tax increase and how the money will be spent, whether for capital investment, to reduce operating expense liabilities, or both. Holmes began by reviewing the record of the last big bond issue in 2018 of $575 million.
“At the time of the 2018 bond referendum, we projected the bonds would be sold at an average interest rate of 4%. The average rate for the $575 million of bonds sold was 2.69%. Consequently, our bond repayments are $177 million less than what was projected when the referendum was passed. In addition, in November 2020, the district was able to refinance $23 million of outstanding debt obligation by $5.3 million,” Holmes said. While this was done on the financial side, the district also met or exceeded all the originally planned capital expense projects included in the bond as originally planned at the time of its approval. Holmes pointed out two other factors that are impacting the HISD tax rate which have resulted in it actually being reduced from the levels in 2018.
First, Humble ISD is a fast-growing district which is driving the need for the bond funds. As new homes are constructed, new businesses open, and existing property values rise, Humble ISD’s tax valuation base grows, allowing the district to collect more tax revenue without increasing the tax rate. Property value growth has allowed the school board to lower the tax rate three times since the 2018 bond referendum.
Second, Humble ISD retires debt annually. Humble ISD does not plan to sell bonds until property value growth and
payments toward existing debt allow the district to do so without raising the debt service tax rate. Holms pointed out the HISD tax rate valuations since 2018 have been: $1.52 in 2018, $1.42 in 2019, $1.38 in 2020 and $1.34 in 2021. The I & S (interest and servicing) portion of those tax rates have remained at 35 cents since 2008. The district is anticipating a 6 % property value growth and projects its maintenance and operating portion of the overall tax rate can be lowered by 2 cents in 2022, based on current projected values and no change in the state formula for school funding. The district plans to keep the I & S tax rate at 35 cents which means, with the 2018 bond money now spent, the current bond proposal can be financed without an increase in the tax rate. In terms of the total district tax rate, it may be reduced.
Homes outlined the district’s requirements and the planned projects and expenditures that the district has determined it needs to meet requirements, including upgrades and replacements to much of its older infrastructure. The projects include:
Four schools: a new middle school on West Lake Houston Parkway due to student enrollment growth, replacement of existing Foster Elementary and Ross Sterling Middle Schools and the construction of an all new
permanent building for the district’s Mosaic special ed program and offices for special education support staff on
its existing property.
Major expansions at four campuses including Humble High School, Summer Creek High School, Summerwood Elementary School and practice gyms for five middle schools.
A wide range of district wide improvements including capital improvements to replace roofs, chillers and other items to maintain taxpayer assets including Career Tech labs, funding for middle school STEM (Science,
Technology, Engineering and Math) labs; middle school culinary labs; high school Health Science
Technology labs; high school Veterinary Medicine labs and a Child Nutrition addition.
Renovation of technology including devices for staff and students; classroom instructional technology; upgrades to network infrastructure; cybersecurity; security camera and radio systems.
A complete description and cost breakdown of the reasons and scope of the proposed bond is available on the HISD website at humbleisd.net/Domain/15038
In other SNC business:
Sallie Alcorn, city councilwoman for At Large District 5 joined the meeting to say hello and to highlight good news for Houston and its residents. “Quickly, I’ll mention two good things that are going on in Houston which are really in your Councilman Dave Martin’s bailiwick. Back in 2017, we did considerable pension reform. We had an $8 billion unfunded liability. The reforms that we put in place cut it in half to about $4 billion. But, because of the robust stock market and everything else going on, that unfunded liability is down to $1.4 billion. The other good thing on the finance front is we just did a budget reform that will cut our OPEB (Other Post Employment Benefit) liabilities which are over $2.04 billion in half,” Alcorn said. Much of it was the result of reduced post-retirement medical coverage of employees being hired now down to levels similar to most private sector employees of major area businesses and companies.