Regarding the renovation of the high school, I think the case has been made that renovation is sorely needed.  I do not believe the case has been made that this community can afford $75Million to renovate the school right now or that the proposed renovation needs to cost $75Million.  I'm not saying that I have any intimate knowledge of what it could or should cost to bring the school up to snuff; only that I have not seen any study or financial analysis that fully addresses those issues. 

With the economy on the skids, we need to be asking if we've considered less expensive ways to provide the kids with what parents and educators want them to have?  Maybe this was covered in presentations which I admit I did not attend, but I don't see the information on the web site I was directed to review http://vashonforschools.org/.

One thing I'd like to know is how plan sponsors calculated the impact of this project on real estate taxes.  I've been told there are about 4,200 households on the island.  If you assume an interest rate of about 4%, to pay off $75M in 20 years requires about $5.5M per year... divide that by 4,200 and you get an average annual added cost of about $1,300 for each household on Vashon. That assumes you intend to retire the bonds in 20 years.  If you don't pay off the bonds in 20 years but only pay the annual interest cost, residents will have to come back to the voters in 20 years to reissue another $75M of bonds in order to retire this issue and who knows what the interest rate will be then. And then when the high school needs to be renovated again or replaced, Vashon residents would be in the unhappy position of trying to fund a new school while still paying for the old one.  

While my 'back of the envelope' calculation assumes an average annual added tax of $1,300 per household, a recent brochure published by the Vashon School District says, for example, that the added tax for a family owning a home with an assessed value of $800,000 would pay an additional tax of only $264 a year... but the brochure doesn't show how they arrived at that number.  Knowing that the average Vashon property is not assessed anywhere near $800,000, I'm curious to understand how my estimate can be so far off.  

If residents believe they can and want to do this, that's fine, but I think it would be helpful if the financial implications of the project and the assumptions being made in the financial section of the literature were available for review.

On the other hand, I think voters ought to be aware that if they do not approve a bond issue now, the window of opportunity might very well close in the not too distant future.  First of all, rating agencies might not look upon Vashon next year or the years that follow in as favorable a light as they might today.  It's possible that the Obama economic plan now ready for his signature might not work as planned.  If it doesn't we might face severely rising interest rates that could soon preclude any possibility of funding this project and who knows for how long.  

So in my view, the project, if it is going to work, needs to be properly designed and managed and the timing has to be right too.  Take on too much debt and the community could fall on severely hard times... wait too long and the window of opportunity for obtaining financing can quickly close.

As it stands right now, I would be hard pressed to vote for the measure even though I understand and agree with the need and respect and admire those who put in some long hours to come up with a plan.  

To the plan sponsors, and speaking only for myself, let me say that I surely would be willing to vote for this measure if you can demonstrate that we can and should afford the amount of money you want to borrow.   

Respectfully submitted,

Mark A. Goldman

Addendum:  After some research I was able to find out why my simple calculations above did not jibe with the school board literature.  Click here for an update.