Debt Service Today

Here are some interesting facts when it comes to the school district debt load. The cost of the county wide building program is $377.8 million. Total debt of the district now stands at $342.8 million.

In 2007, the first bond payment was only $15.9 million. Even though the district has not been borrowing more money, the annual bond payment has been rising every year. Last year it was up to $24 million and this year it is $24.7 million. Next year it will rise to $26.7 million and stabilize at that level for the following 18 years.

This year the bond tax rate was 52.5 or the same as last year. The payment went up $700,000. Thank God total assessed value of property rose proportionally, so there was no tax increase.

Next year the taxpayers of Pickens County might not be so lucky, because the bond payment rises about $2 million. Given the value of a mill is about $430,000, and growing very little, likely there will be a tax increase next year to cover the rising payment.

That tax increase (like all of the others) were baked in the cake by the 2006 school board that borrowed all of this money in 2007 and they had the bond lawyers/ analysts structure the deal so the payments rose over time.

Anyone who wants to borrow more money (beit on the board, in the administration or the social do-gooders out there), thinking the district hasn’t borrowed money in a while, needs to look closer. While total school debt isn’t going up, the annual payments keep rising through 2014.

There are so many things the board of 2006 (mainly the six who voted for the Greenville Plan) either did or failed to do that the boards of 2008, 2010, 2012 and 2014 had to deal with or clean up. Dealing with rising bond payments even though we haven’t been borrowing money is another example of what those six trustees left in their wake.

Normally you structure a loan where the payment stays flat like your home mortgage or car payment. The board of 2006 structured this loan so the payment rose the first eight years and then flattened out. Thus, saddling future boards with rising debt payments and making it harder for them to finance the district’s on going capital needs.

This is why I cringe when former trustees like Kevin Kay get public and start to say the board should add another seat and it should be put in Easley. The Easley/ Clemson faction of the board (Easley — Shirley Jones, Jim Brice, Kevin Kay; Clemson — Herb Cooper, BJ Skelton, June Hay), gave us the Greenville Plan — an excessive building program with its staggering financing plan. With those six it was all about the here and now in my opinion. I don’t believe they thought about the extra $2.5 million a year it was going to cost to run all these buildings, nor did they think about the rising bond payments they scheduled and how that would tie the hands of future boards when it came to managing the school district.