Five Mil Tax Fund Bond

In a 727-to-68 vote, Auburn residents voted in favor of utilizing more than $46 million from the Five Mil Tax Fund Bond to fund renovations for J.F. Drake Middle School and Cary Woods Elementary School.

Auburn City Schools' J.F. Drake Middle School and Cary Woods Elementary will receive more than $46 million from the ongoing Special Five Mill Tax Fund Bond to pay for the costs of demolishing and redeveloping the facilities.

Auburn city manager James Buston emphasized the election, held last week, was strictly to decide how the city would utilize the funds, and taxes will not increase.

The Drake and Cary Woods renovations will include improvements to security, expansions to accomodate the increasing number of students and saving a substanial amount of money by demolishing and rebuilding the schools as opposed to comprehensive renovations, a ccording to Auburn City Schools public relations director Daniel Chesser.

“We’re happy that the citizens of Auburn have once again overwhelmingly supported the projects and purpose of our school system,” Auburn Mayor Ron Anders said. “We look forward to seeing two of our historic campuses of J.F. Drake Middle School and Cary Woods Elementary School receive renovations.

“They are two grand locations of education that have seen better days from a facility standpoint,” Anders said. “Teachers and families of Auburn deserve to have a better quality facility for their kids to attend Auburn City Schools. This vote confirms the funding will be there to proceed with those two projects. We look forward to many happy days of kids being taught at Cary Woods and J.F. Drake.”

'The next step'

T he Auburn City Council held a special meeting Tuesday to discuss and approve canvassing results of the Special Five Mill Tax Fund Bond election to fund Auburn City Schools’ projects.

“Now, the next step is us going out to the bond market,” Buston said. “The first part of that is to have the rating agencies rate our credit worthiness, so Moody’s and Standard & Poor will be rating us in August. Assuming we will not be downgraded and receive our high rating, we will go to the market and start selling the bonds.”

Auburn residents voted in favor of allocating more than $46 million from the tax bond funds to redevelop Drake and Cary Woods, with a 727-to-68 vote.

Percentages rates, ages and interest rates of the bonds have to be compiled for the city to receive an average maturity rate before utilizing the bonds this August, Buston explained.

“It’s pretty complicated,” Buston said. “We have attorneys and financial advisors that guide us along the way, and our finance department is well-versed in this, guiding us along the way. It’s a step-by-step process.”

Bond fund background

The city of Auburn created the Special Five Mill Bond Tax in the 1940s to fund Auburn Parks and Recreation projects with property taxes, Auburn finance and treasurer Penny Smith explained.

“After there was an election to add a property tax for Auburn City Schools which failed, the previous city council in 2015 decided they would allocate the city’s long-standing Five Mill Tax to give to the schools, so they can do infrastructure projects to repair and build new schools,” Buston said.

Smith said the 2015 Auburn City Council used the tax to construct the new high school, and more than $78 million in bonds were borrowed to fund the development.

“Voters have to approve whatever project is going to be paid for by the tax,” Buston said. “The tax is collected, accumulates and every-so-often a series of projects have to be brought to the electorate to say what projects we are going to do, sell bonds and use the Five Mill Tax in the debt service to pay these bonds. We did that with the high school.”

Buston said election participation commonly resulted in a 90-to-10 percent vote in previous Five Mill Tax elections, and this election yielded a small amount of participation.

“Fewer than 2 percent of the qualified voters came to vote, but that’s not uncommon,” Buston said. “It’s a tax that’s already being collected. It’s not a new tax. If there was a problem with the projects, then you would see a lot of people come out. But when there’s no problem, you usually don’t see many people come out to vote.”

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