The Oak Harbor School District is asking voters to approve a $45 million bond levy in March to fund renovation of the high school. While bond supporters say there is no doubt the aging high school needs help, property owners want to know how much they will end up paying for a yes vote.

According to the school district’s business director, Pamela Ross, the bonds would be financed at the initial levy rate of .911 cents per $1,000 of assessed valuation. That amount will go up as the existing bond levy is paid off, but the difference between the total bond levy rate prior to 2003 and after would remain around 90 cents: for example $1.32 in 2003 versus $2.224 in 2004.

The high school bond levy tax would be added to the current levies for existing bonds, and a maintenance and operation levy which went into effect in 2002. The total amount property owners would pay for school taxes, starting in 2004, would be $3 per thousand. Or $3.006 to be precise.

Ross explained that just like car or house payments may be made on a schedule, the bonds are also paid off on a schedule. Rates are adjusted to meet this schedule, but the amount taxpayers will see on their property tax statement for school taxes will remain at around the $3 per $1,000 figure.

As the existing bonds are paid off and the old levy rate goes down, the new levy rate used to pay off the high school bond will go up, peaking at $2.21 in 2019, the last year of the bond. However, the total levy rate will stay relatively constant because the other levies have dropped off.

For example, in 2004 the levy rate on the existing bonds would be $1.313, the rate on the high school bond would be .911 cents, and the M&O levy rate would be .782 cents.

When the existing bonds are paid off in 2013, the taxes collected will shift to paying off the high school bond, resulting in a levy rate of $2.217, plus the .782 cents M&O levy rate. The total levy rate will remain fairly constant until the 16-year high school bonds are paid off in 2019.

But how much will the average homeowner pay annually for this bond alone?

Ross said while the assessed valuation growth of all property in Island County is projected at 4 percent, the valuation of individual homes may vary. This would affect the taxes each home pays, making it difficult to project exactly what property owners could expect to pay over the life of the bond. Rather, Ross said homeowners should gauge what they will pay based on the total levy rate.

As an estimate, the owner of home worth $150,000 in 2004 would pay $450.90 in total school taxes, if the bond levy passes. Without the high school bond tax the payment would be $314.25. How much that payment is in the future depends mainly on whether the home goes up or down in assessed value.

The tax-exempt, general obligation bonds would be sold through the bond underwriter Jack Eaton, managing director with Banc of America Securities. He has worked with the district since 1996.

In a letter to the school board Eaton called this “a wise time to invest in Oak Harbor High School,” with interest rates at historically low levels.

He said lower interest costs can reduce the amount of time needed to repay the bonds.

Eaton expects to offer the bonds in the high 4 percent range in June, if the levy passes.

In uncertain economic times, Eaton said school bonds are selling well.

“The municipal market continues to be interested in buying school bonds,” he said. “They are a good investment.”

Eaton noted that income from school bonds is tax-exempt, making them more profitable than bank-issued certificate of deposits, which are taxable.

You can reach News-Times reporter Marcie Miller at mmiller@whidbeynewstimes.com or call 675-6611