No Increase to Property Tax Rate

 

 

The Rattlesnake Wind Farm project will be adding a significant amount of taxable value to Brady ISD. Because of this, the proposed bond referendum will be completely paid for by the additional revenue provided by the Rattlesnake Wind Farm project. To further guarantee no increase in tax rate to the community, the board has also passed a resolution vowing to limit spending on the bond projects so that tax rates will not be raised.

NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF BRADY INDEPENDENT SCHOOL DISTRICT AS FOLLOWS:
The Board hereby states that it will not authorize the issuance and sale of general obligation bonds from the Election, if the issuance of such bonds will result in an increase of the interest and sinking fund tax rate for the District.
The Board hopes that new trustees and any future governing Board will consider the content of this resolution before authorizing the issuance and sale of voted authorization from the Election.

A no-vote on the bond referendum would result in the following changes to property taxes for homeowners:

 

Brady ISD Credit Rating: Brady ISD holds a high (A2) Moody rating and will qualify for a low interest rate. Further, Brady ISD has a FIRST (School Financial Integrity Rating System of Texas) Rating of “Superior.” Based on fifteen indicators Brady ISD scored a “yes” or a perfect “10” in each indicator. The district scored a perfect score of 100 thus awarding the district a “superior” rating.


The Wind Farm & Brady ISD Facilities Funding

The Rattlesnake project is the windmill farm which will be adding a significant amount of taxable value to Brady ISD. When these types of projects choose a location, the local school district and development company typically reach what is called a 313 agreement. This agreement is a compromise between the school district and the development company in which the development company is relieved of some tax burden with a limitation on Maintenance & Operations taxes for the local school district, but is subject to the full I&S tax rate, which are the taxes school districts use to fund facility projects through bonds.

What this means for Brady ISD and its community is that the only opportunity to benefit from new value of the Rattlesnake windmill farm is through facility bonds payments. Because of the 313 agreement, these funds cannot be used for increased payroll, to buy materials, or for any other operations expenses. These funds can only be used on bond payments.

Another option that is not available to Brady ISD is using these funds to pay off current bond debt early. Because of its bond agreements, Brady ISD is not able to increase its payments like you might with a mortgage to pay the loan off sooner.

Rattlesnake is estimated to peak at $182,000,000 in taxable value, adding 40% on top of current taxable value, and will decrease roughly 5% a year every year from then on. This means that each year the district will receive roughly 5% less from Rattlesnake to help with bond payments.

This gives Brady ISD citizens two options:

The first is to do nothing, which will result in a tax decrease on I&S taxes of approximately $56 on a $75,000 home each year.

The second is to pass a bond to use the Rattlesnake tax revenue to fund facility improvements. Within this option there are several possibilities.

Because of the 5% drop in tax revenue from Rattlesnake every year, if the Brady ISD community wants to benefit from the Rattlesnake tax revenue by addressing facility needs, it is most advantageous for Brady ISD to issue bonds as quickly as possible.

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Calendar

Bond Town Hall
April 19, 2018, 6pm
Brady High School Cafeteria
Bond Town Hall
April 23, 2018, 6pm
Jacoby's Cafe, Melvin
Early Voting
April 23 - May 1, 2018
Election Day
Saturday, May 5, 2018
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