I WAS TOLD THAT THIS BOND IS REALLY GOING TO BE $83 MILLION AND NOT $55 MILLION. IS THE DISTRICT MISLEADING US? IS IT REALLY GOING TO COST ME MORE A MONTH?
The State of Montana requires the district to communicate the amount being borrowed (Principal) in dollars on the ballot and the district has done that. It is $55,190,000 for the two bond issues. Please see the table shown in the FAQ: “ What Are The 2 Bond Measures That Will Be On The Ballot?” for the details.
What does the payment look like for taxpayers? Similar to a house payment, the payment is composed of both principal and interest and is estimated to be $25.42 per month for a $100,000 home as presented in the materials prepared for voters. Therefore, the most important thing to note is the tax impacts of $25.42 on a $100,000 home for both bond issues is the total estimated monthly amount including the principal and interest. Like a house payment, it feels like a lot at the beginning and seems less burdensome towards the end because inflation makes the value of a dollar fall over time and history has taught us that a dollar in your pocket today is more valuable than a dollar 20 years from now. Of further note, when we have new construction added to the tax rolls (say a new home, or a new business, or even a new pipeline), then our tax base grows. Each person’s annual share of the debt service levy changes based on tax base changes over the term of the bonds.
When estimating interest costs, we used a conservative estimate of $28,670,500 in interest for both bonds based on trends in the bond market. This interest estimate is based on a true interest cost rate of 2.86%, which factors in time value of money and the fact that because of inflation, future dollars are worth less than today’s dollars during the 20-year term of the Bonds. See the table below for the ten-year history of interest rates. Rates are currently at historic lows making it an excellent time to borrow money for our 20-year bond.
QUESTIONS? PLEASE CONTACT:
Stephen Schreibeis at 406-377-5339 or firstname.lastname@example.org