The local QuikTrip is about to sell a lot more morning coffee.
A new school project is exciting for many reasons – improved educational capabilities, larger student capacity, community pride and improved student morale – but the economic impact can’t be understated. From the sheer number of construction workers coming to town to the healthy retail boost, the injection to the local economy starts well before the new school year begins.
Of course, that impact will continue to be felt for years to come. High quality schools and education help provide students with the tools they need to be successful in life. With more focus on real-world learning and corporate community partnerships, schools can have a lasting impact on communities and the business ecosystems within as students prepare to enter the workforce.
As we work with local public school districts as they embark on a bond campaign, conducting an economic study can provide significant insights. It’s important to understand the community dynamics around the school, how the community works, and what generates revenue (which, of course, generates revenue for the district). For one suburban Kansas City district, for example, a $41 million bond issue made quite the impact:
- 171 jobs created
- $14.6 million in workers’ salaries
- $4 million in taxable spending in the community during construction
- $160,000 in estimated sales tax collected
Impact DataSource, an independent firm specializing in economic research and analysis, estimated Kansas City metro-area bond issues generated an average of 133% of their value in economic impact in 2020. When the stakes are this high, it’s important to add the right players to your team as you work to demonstrate the community value of your upcoming bond issue.
What a bond is for (and what it’s not)
The first step, of course, is a little education—specifically, what the bond money can (and can’t) be used for. As voter-approved funds, these bond dollars are to be used for a district’s capital improvements. This can include a new facility, a renovation to an existing school, purchasing land for development 10 years from now, etc. This money is typically paid off over the years through property taxes. Some bond issues include a tax hike, while others are worked into an existing tax.
The coronavirus pandemic and remote learning brought forth an additional need for technology equipment and connectivity, bringing some of the largest bond issues in history in places like Dallas and Los Angeles this past November. Thinking towards the future, many districts have opted for shorter repayment terms on debt to match the life cycle of the equipment purchased to allow for other potential needs on future bonds. And while bond issues cannot be used for certain things such as salaries, it does oftentimes free up other budget dollars to be used for various purposes.
Bond with the bonding council
As your district plans for an upcoming project, one key step is engaging with a bonding council, a private company that helps the district sell their bonds as well as calculate how much money they can bond tax-free based on your property assessments, amount of debt, etc. This company evaluates all these aspects of your financial picture and then helps you negotiate.
This is when working with an architect who has experience with bonding companies becomes so valuable. You want an architectural partner who has the full financial picture at the start of any project to better evaluate what kinds of projects are possible and when the money will become available. This allows you to better plan out projects over years to use those bond dollars more efficiently.
Your architectural partner should be meeting with you and the bonding company early and regularly to get a good understanding of budget priorities and establish a long-range plan. This allows you to begin planning the best timing for each phase of a project while you maintain solid financial health.
As you evaluate the partners to help you with an upcoming bond issue, make sure you find those with solid relationships with bond councils that serve your area—partners who specialize in education and understand the nuances that come with public monies.
Bring the state-specific expertise
Another important consideration as you assemble your team is the partner’s experience working on bond issues in your state. Public school bond and tax laws are somewhat similar but can still have minor yet important differences that must be understood and carefully followed, including rules around transparency, election results, bond issue restrictions and even the election process in general.
As you move forward with a bond issue, ensure you’re working with an architectural partner who has deep expertise with public school bond campaigns in your state.
An approved bond issue brings so many benefits to your community – from economic to social to academic – so make sure you’re starting off on the right foot with the most qualified partners.
John Brown is a partner at Hollis + Miller Architects, an integrated architecture firm designing the future of learning environments. Share your thoughts on Facebook, LinkedIn or on Twitter @HollisandMiller.