LOS ANGELES - Seattle School District No. 1 is seeking voter approval today for $695 million of general obligation bonds to finance its most ambitious capital improvement program ever.
The measure, which calls for one of the nation's largest school bond authorizations, would allow for financing of construction projects through the year 2000.
The debt proposed grew out of a facilities master plan that the districts board of directors adopted in July. That plan spells out the district's requirements for modernizing, preserving, or replacing all of its school facilities for the next 18 years. The capital improvement program, known as CIP Il. covers the initial building phase.
If voters approve the plan. the district expects to sell a bond issue of about $235 million in October, said Timothy McCourt, a capital budget analyst for the school system.
Proceeds from the first sale would finance about three years of construction Mr. McCourt said.
Lehman Brothers and Seattle-Northwest Securities Corp. would serve as co-senior managers on the negotiated transaction, with Lehman as bookrunner. Smith Barney Harris Upham & Co. is financial adviser.
The GO bonds must receive 60% voter approval. and turnout for the election must equal at least 40% of the turnout for the last general election. District officials expect to achieve the turnout number because today the state's primary day.
John Rose, a vice president of Seattle Northwest, said prospects for passage of today's bond measure, known as Proposition 1. appear favorable.
The district has an "almost unblemished record" of obtaining election support, Mr. Rose noted, and the new proposal is getting "a lot of positive publicity focusing on the need."
Aging facilities are "the primary driver right now" for making the improvements, Mr. McCourt said.
More than one-third of Seattle's schools already are 60 years or older, according to the superintendent's final recommendations for the plan, and most of the district's schools and classrooms will have outlived their useful lives within the next 20 years.
"Without change, our students will be housed in aging facilities with educational deficiencies. seismic problems, deteriorating physical conditions, and limited capacity to meet the projected demands of the future." the superintendent's report says.
Mr. McCourt noted that the district also must begin preparing for a moderate but steady increase in enrollment over the next 20 years. The district projects it will have 57,000 students by the year 2010, up from about 44,000 now.
The district estimates that capital construction will cost $795 million through the year 2000. The 15-year year bond measure would raise $695 million of that total, while other funding, such as interest earnings and state matching moneys, is expected to provide the balance.
If the state does not provide anticipated levels of support, the district said it may have to scale back its projects or ask for an additional financing measure.
Today's bond measure dwarfs the district's last bond authorization, which totaled $64 million in 1984, Mr. McCourt noted. That plan, known as CIP I, financed modernization or replacement of 14 elementary schools and one high school.
Mr. McCourt said that the district is now "debt-free." Its previous bonds were rated double-A.
Passage of the bond issue would cost property owners 50 cents per $1,000 of assessed valuation, or about $76 a year on a home valued at $153,000.
The proposed capital improvement program includes upgrades for 25 elementary schools, two middle schools, five high schools, and six alternative-special schools. Other facility improvements are planned as well, such as dedicated child-care space in all elementary schools and auditorium and stadium upgrades.
In an editorial Friday, the Seattle Post-intelligencer endorsed Proposition 1, citing the need for a quality educational system that includes modernized facilities.
The newspaper also argued that passage makes good business sense, considering that interest rates are at extremely attractive levels.
"That will mean taxpayers will get the most bang for their bucks as more money can be spent on the construction work and less on interest," the paper said.
Most of the negative publicity surrounding the proposition is coming from certain neighborhoods, where some fear capital improvements could entail condemnation proceedings that lead to razing homes.