The issue is not what the money is being spent on, but how the board decided to pay for the project.
The Waterloo Community School District’s Board of Education wants to modify its buildings to better facilitate student learning. We expect school board members to make such decisions, but a problem arises with how board members agreed to pay for the new building.
Within local governments, including school districts, revenue bonds and general obligation bonds are common financing tools. A revenue bond simply means a bond that will be repaid by the income, or revenue, from a specific project or source. A general obligation bond, on the other hand, is not tied to any funding or repayment source and is issued solely on the government’s promise to repay the funds from all available resources.
In Waterloo’s case, the school board voted 5-2 in favor of issuing revenue bonds for $165,000,000 to merge its two high schools into one. The revenue used for repayment would come from the district’s 1% sales tax, as part of its Secure an Advanced Vision for Education (SAVE) fund. Last fiscal year, the Waterloo School District received $14 million from this source. Because the project would be funded by a revenue bond, voters do not normally have the ability to vote on the project.
According to news stories, many people spoke against the plan at a public meeting. Unfortunately, the only opportunity taxpayers now have to weigh in on the project requires them to present a petition to the school board with signatures from more than 30% of active voters (2,342 citizens) to force a public vote on the decision. Immediately following the board’s decision, the petition drive started and it has collected 1,000 signatures in just a few days.
One Waterloo resident who started the petition said, “My first concern is $165 million is a lot of money, and for me, that’s a lot of weight and responsibility on the four yes votes it took for the Waterloo School Board to approve that expense of SAVE funds. I feel that’s too much weight in responsibility on the school board. I think it should come to a public vote.“
A valid petition would require the board to put the issue before voters or withdraw it. If residents are not successful in collecting the needed signatures, the district can move forward issuing revenue bonds for the project. Many signing the petition aren’t necessarily upset at the board’s decision to merge the schools, it’s about the high price tag being approved without voter consent.
This is evident from a Waterloo resident when asked about the project, “I have no opinion on whether or not it is a good idea to build the high school as planned in the location it is planned. What I think is essential to happen is that there be a vote on this that we must have as a community before we indent ourselves for $165 million that the community supports that.”
The situation in Waterloo is a common one across Iowa, and it spans all levels of local government. The issue is not what the money is being spent on, but how the board decided to pay for the project.
All revenue bonds should be subject to votes like general obligation bonds. Having the same requirements for revenue bonds and general obligation bonds would also mean holding the elections in November, with direct notifications sent to registered voters alerting them about the votes. This change would ensure voters have a say in their districts’ spending and hopefully alleviate some of the distrust communities have of their locally elected officials when decisions like Waterloo’s are made.
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