GPS $100M Bond

If voters in November approve the bond requested by Gilbert Public Schools, the district will spend most of the money on needed building repairs and upgrades, officials said. (GPS)

Competitive pay and critical facility maintenance are some of the proposed expenditures for a 15% budget override and a $100-million bond going to Gilbert Public Schools voters this November in an all-mail election.

The Governing Board last week voted 5-0 for placing a continuance of an existing override and 4-1 for a general obligation bond on the Nov. 7 ballot. Neither will raise the property tax rate of residential and commercial properties, according to the district.

  “I think it’s really important that the children in our schools know that we have a pride in their education and that we are willing to invest in the staff with the override and the buildings with the bonds,” Board member Jill Humpherys said May 16.

Continuing the override would allow the district to go over the state spending limit on its maintenance and operation budget, which pays for day-to-day operations. 

The district’s three priorities for the override in November is to maintain competitive pay for teachers and staff, continue to hire mental-health counselors, social workers and campus security personnel and maintain a $2 million allocation to class-size reduction.

The override would give the district an estimated $35 million for the 2024 school year, according to Assistant Superintendent of Business Services Bonnie Betz. She said the $2 million equaled about 22 new hires to help reduce class sizes. 

Under the override in place now, the district receives the full 15% until 2025-26 when it   drops by one-third, followed by another one-third for 2026-27 and then expires. If the override fails, the district would have to cut spending by 15% after 2025, officials said.

GPS’s proposed bond spend to Fiscal Year 2027 includes using $63 million to do critical upgrades and replacement in its buildings; $12 million for safety and security; $12 million for technology infrastructure; $9 million for career and technical education, extra-curricular spaces and $4 million for school buses and vans. 

According to the district, over $53 million is required over the next two years to address critical facility needs such as roof replacements, restroom renovations and boiler replacements at its campuses.

  Betz reminded the board of consultant AMERESCO’s report that 75% of GPS’s portfolio of buildings totaling 4.8 million square feet was built between the 1990s and 2000 and are on average 32 years old and showing their age.

 She also reminded the board that the district has a backlog of projects totaling about $178 million after taking into account $20 million has already been approved this fiscal year for summer projects.

“The $100 million will address the large portion of that backlog,” Betz said, adding that the district has been spending $20 million to $25 million annually on its buildings.  

Board member Chad Thompson, however, noted that the buildings’ decline will eventually outpace the district’s ability to maintain them to 2052. 

 According to AMERESCO, the district needs to be spending $48 million annually to keep its facilities in good shape for the next 30 years.

Betz said the current spending will maintain the buildings in “good” condition through the next five years and anything could happen after that such as the district getting additional state funding or unexpected grant dollars.

“We want to be sure our buildings are in good repair,” Humpherys said, adding that the bond “right now will keep us where we need to go.”

“We need to be just careful that we manage that well,” Humpherys said. “And when the needs become more we’ll have to be able to address that but there are other opportunities besides going out for bonds.”

Thompson questioned the timing of going to voters now if the district is able to adequately maintain its portfolio until 2029.

“Is the benefit worth the ask of our taxpayers for $100 million when it seems like we could wait until 2029 and we’d be at almost the same place as we are now?” asked Thompson, the sole dissenter in putting the bond to the voters.

 “Could we give the taxpayers a break until 2029 and then ask for some money to do some of these things?” he also asked.

Betz responded that the fear is “the need would be so great by the time you hit 2029 that now you’re going to have to sell a large amount of bonds all at once.”

“That’s going to definitely adversely impact the taxpayers because it’s going to hit their tax rate because you have to amortize that out over the time frame,” she said.

She said that despite the current annual spend, there is still a gap of $20 million a year, pushing the district’s buildings toward a critical stage.

Thompson said his concern was bonds will become a “perpetual ask” of the voters.

“I know it’s not like the buildings are getting any newer and so I realize things need to be done,” he said. “Asking for $100 million is really just the tip of the iceberg. 

“As we continue to age our taxpayers are going to be asked again and again for money and more and more and more money and that’s concerning.”

Superintendent Dr. Shane McCord noted that Thompson made a great point of having to go back to taxpayers.

“It is about the funding formula and what is given to schools,” McCord said. “Obviously they don’t have this information like we have at our fingertips when it comes to the Legislature. 

“But these are the types of things we need to go to them with when we say, " Listen, this funding formula isn’t appropriate. If you don’t want us to go to the taxpayers here is what we need moving forward.’ But at the end of the day if that doesn’t change, they leave us no choice.”

Thompson asked if the budget balance carry forward could be used to offset the bond or a portion of it in order “to not put as big of a burden on our taxpayers.”

Betz said the district currently has $12 million in budget carry forward monies and that there was flexibility in how it was spent. Because it’s one-time money once it’s spent it’s gone, she added.

Board member Sheila Uggetti said $18 million of the $20 million the district is spending annually for building maintenance comes from a bond voters approved in 2019 and will be spent entirely by summer. 

With the vote, GPS is joining as many as 25 other district s in Arizona seeking bond elections in what one East Valley school finance director called a “record year” for such requests. 

Kyrene Chief Financial Officer toild is board earlier this month that the total amount opf those districts’ asks will be between $2.5 billion and $3 billion. He was asking his board on Tuesday to okay a $161 million bond elect ion as well as an $8.5 million override for a district fund covering smaller capital expenditures.

Mesa Public Schools two weeks ago approved a bond election this November for $500 million.

If GPS voters reject the bond in November, the district would have to make do with $2 million in annual state funding for its buildings, she said, asking Operations Director Albert Dutchover how he would prioritize that.

 “Very carefully,” Dutchover responded.

 Uggetti questioned, “how is it even possible.”

Thompson said it was doable if the need one year were to go over $2 million.

  “Yeah, it would be a struggle but I mean theoretically it's possible that we could re-prioritize things so that we'd have the money,” he said.  

  Board member Ronda Page said compared with surrounding school districts, GPS was asking “very little” and that the district has been fiscally conservative in how it’s spent the taxpayers’ money.

We are a public school but we also have to run like a corporation,” Page said. “Many corporations or companies have a lot of expenditures, especially with building and maintenance.

“And it is imperative that we get this $100 million. We got to keep our buildings maintained. We have to make sure that our kids are safe on our campuses and this will greatly benefit Gilbert Public Schools.”

 Thompson remained unswayed.

He was concerned with the thinking that it was OK to stay at the current tax rate because taxpayers have been at this rate since the previous overrides were passed.  

“That argument – just for a lot of people –I don’t think it would hold a lot of weight especially in our current economy because we are in a different place right now,” he said. “Lot of people are tightening their belts.”

Betz said if voters approved the bond, it gives authority for GPS to sell bonds. But if the economy is not right, the bond expires after 10 years and goes away.

 “I don’t think we take this lightly to come before our taxpayers,” Board President Lori Wood said. 

“I see it as a heavy and a real responsibility to balance asking our taxpayers for this with the responsibility that we also have to provide outstanding education and maintaining functioning and safest facilities, which we have already invested in as a community and taxpayers.”