Total Cost of Sioux Falls School District Bond a Legitimate Question [OPINION]
The debate over a $190 million bond vote to build some new schools in Sioux Falls is heating up. It's a big number that has raised eyebrows in the city, to be sure.
It's also needed.
Recently, the debate has turned to just how much the final price tag will be, meaning what's the total cost of the bond, with interest. Which led to a story in the Argus Leader last week with the headline: Could the $190 million bond cost more than proposed?
First off, it’s a terrible headline. Of course, it does. Every bond has interest. It’s a loan against tax receipts. So it’s misleading at best.
But to the meat of the issue. What is the total cost? It’s a legitimate question and one that I asked for Superintendent Brian Maher when he was on The Patrick Lalley Show recently.
Maher said at the time, that hadn’t been determined yet because they don’t the interest rate at that point. Which is true, but we can also make some assumptions and know generally where it’s going to land. Twenty-five years at 4 percent is approximately $110 million in interest.
But here’s where it goes bad – just say it. Nobody – NOBODY – is surprised that’s there’s interest on a loan. What upsets me is that it’s a dance in order to not talk about a bigger number when it’s already a big number. I understand that in some respects, but dancing doesn't help.
Making it worse are the condescending statements in the story, not from Superintendent Maher – who doesn’t make those kinds of statements – but from former-school-board-member-turned-school-district-employee Doug Morrison and Thomas Grimmond from Dougherty and Company, the firm that handles pretty much everybody’s bond sales around here.
From the Argus Leader story:
"(Residents) are trying to use a futuristic number, or what we call future dollars, to try and explain current dollars," Grimmond said. "Current dollars is $190 million. Future dollars might be another $110 million, but it could be less than that."
Grimmond called the $300 million number a "scare-tactic" by naysayers, and compared the process to how home buyers talk about buying a new home with their friends and family.
"Nobody goes out there and says, 'I bought a $200,000 house, but in interest it's going to cost me $400,000 over 40 years,'" Grimmond said. "...They don't look at that final number. Should they? Maybe.
"But if you ask the naysayers, 'How much are you paying on your house with principal and interest included in it?' I know they don't know that number. It would be like crickets going off, but they want to hold the school district to that same standard."
That’s completely condescending. It sets up an us versus them dynamic that just does not exist on this bond.
I’ve heard people ask for the full amount. I’ve heard people question the overall number. But I’ve not heard one person yet say these are not necessary and valuable building needs for the school district.
Also, Mr. Grimmond, you are not a school district employee. You are not an elected official. You’re an advisor on money matters. Your judgment on what’s a scare tactic, and what is not, is irrelevant.
The people should always ask questions about how our money is spent. It’s our money, not Dougherty and Company's. It’s not Doug Morrison’s. It’s not Brian Maher’s. It’s ours.
I support this bond. I support building new schools. But don’t talk to me like I’m stupid. I know how interest works. I’ve bought homes. In fact, I did know the final number. We all do.
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