Monforton School just became eligible for federal financing that could cut local taxpayers' costs nearly in half for a $3.5 million school bond issue that's on ballots being mailed out Friday.
Lynne Scalia, Monforton School superintendent and principal, said Wednesday that when Lewistown voters rejected a school bond on Tuesday, Monforton was the next Montana school district in line for the financing program, funded by the federal stimulus law.
"I felt very disappointed for Lewistown, knowing how hard they worked," Scalia said. "But I was excited for Monforton because we have the potential to save taxpayers quite a bit of money."
The school at Four Corners has 228 students this year, up nearly 30 from last year.
Over the life of the bonds, the Qualified School Construction bond financing would save more than $2.5 million, she said. "We wanted to get the word out that the savings is pretty amazing."
Ballots are already printed and ready to mail out on Friday. Oct. 12 is the deadline for voters to return their ballots.
The wording on the ballot describes the original proposal -- selling $3.5 million of 20-year bonds with an interest rate of about 4.5 percent.
Over 20 years, that would cost a total of about $5.4 million.
Scalia said postcards will be sent out to voters to explain the new financing proposal. Under the federal program, the bond debt would be paid off in 15 years, and local taxpayers would pay nearly zero interest, she said. That alone would save about $1.9 million.
On top of that, the federal program would allow the district to invest local taxpayers' payments in a "sinking fund," which would accumulate interest over 15 years. D.A. Davidson & Co. has estimated that would generate about $700,000, which would bring local taxpayers' cost down further. At the end of 15 years, the district would pay back the bond principal in one lump sum.
Instead of costing taxpayers a total of $5.4 million to pay off the debt, it would cost $2.8 million, "a rather shocking difference," Scalia said.
She said she wasn't aware of any group calling for a "no" vote. The Bozeman Area Chamber of Commerce has endorsed the bond issue.
However, Scalia said her big concern is that many Four Corners taxpayers, already feeling the recession, recently learned they're going to be hit with hefty water and sewer fees of about $675 a year.
The cost of the school bond to taxpayers would decrease over time, Scalia said. That's based on the assumption that the school district's tax base would continue to grow by 9 percent a year, as it did last year. Paying off earlier school debt would also reduce taxpayers' bills.
For the owner of a typical home in the North Star subdivision that would sell on the real estate market for $250,000, the state's taxable market value is $112,000, Scalia said.
For that typical homeowner, the bond would add nearly $75 to the property tax bill the first year. Payments would cost about $51 by the fifth year, $31 by the 10th year, and $16 by the 15th and final year, she said.
The money is badly needed to expand the 40-year-old part of Monforton School, and get children out of the 1888 building, she said.
The renovation plan calls for adding seven or eight classrooms and updating the electrical, heating and ventilation systems. Handicapped access would be improved, a science lab would be added for middle school students, and one room would be a computer lab.
"We want to get kids out of the 1888 school. It's unsafe and unhealthy," Scalia said. "Our heating system is totally worn out. It's made up of residential heating units that don't meet standards."
The entire cost of the renovations would be about $4.5 million. The school would reduce the cost to taxpayers by using a half-million dollars in impact fees from developers and another half-million dollars in grant money.
Monforton voters have never rejected a bond issue, Scalia said. However, the annual school levy to raise money for running the school failed the last two years, last year by 14 votes.
Gail Schontzler can be reached at firstname.lastname@example.org or 582-2633.