Why does Rockwood use bond issues to fund construction?

I've heard this question asked a bunch of times, and I did some investigating to find out the answer.

First of all, yes, Rockwood does come back to the public once every couple of years to ask it for permission to sell bonds that it will use for capital improvements to Rockwood. According to law, the money raised from the bond issue has to be used to fund capital improvements to the district and its properties, and cannot be used for soft things like salaries and bonuses.

Each time the district comes back and asks for a bond issue, it tries to make clear that the funds used to repay those bonds are not going to come from a tax increase. The bonds are paid back through the 75 cent debt service levy that is already being paid by Rockwood residents. As long as what we borrow fits inside of the funds available in this levy, there is no tax increase associated with repaying these bonds. (I'm certain some of you out there will tell me how naive this is. I'd love to hear, so comment away!)

There has been a lot of conversation over reducing this 75 cent levy and moving it into the general operating budget, which is funded by a different portion of the Rockwood taxing levy. This would give the district a larger operating budget each year, allowing it to reliably fund maintenance items like technology upkeep, roof maintenance, and so on.

One problem with this is that it would have to be done with a tax increase for the operating levy and a corresponding promise by Rockwood to reduce the debt service levy. It is unlikely that this tax increase, free though it would be, would be passed by voters.

The real trouble with this, which brings us around to the answer to our original question, is that moving the money from a dedicated bond fund into the general operating fund would put that money in grave danger. ("Grave danger?", he asked? "Is there any other kind of danger?", he replied -- name that movie!)

While I respect the office of BOE director, they are politicians. And just like regular people (wait, did I just call them irregular people???), they come to the table sometimes with their own agenda. It could be a pet project for some key donor organization, or it could be something that directly benefits their own children. The point is that once money is all put into the same pot, the temptation is there for board members to use it for whatever they want. So if money were moved from the debt service levy into the general operating fund, even if its sole purpose is for funding technology and maintenance, it would slowly leak out into other projects. And that would leave us right where we are now, a few years down the road, without money in the budget to repair and replace key parts of our Rockwood infrastructure.

It is in everybody's best interests to have maintenance and technology paid for out of the bonds, because this protects those funds from sticky fingers of eager politicians.

-- bab