SAISD: No tax rate boost for bond
Voters will decide on $1.3 billion package, city’s largest ever
Inside Rhodes Middle School, in the ZIP code with San Antonio’s highest poverty rate, many classroom “whiteboards” are old green chalkboards disguised with white stickers or paint.
Science and social studies classrooms have lockers in them for no discernible reason, literal wastes of space. The 34-year-old air conditioning system hums loudly throughout the campus. A boys’ restroom door swings open to reveal urinals clearly visible from the hallway.
About 570 students attended this West Side school last year before the pandemic shut it down. Now the public health situation is improving, and 25 percent of students are allowed back, but Principal Rick Flores can’t accommodate them all, spaced 6 feet apart, in the small classrooms.
“The social distancing is a challenge right now, if you want to honor the rules,” Flores said.
If voters approve the largest municipal or school bond issue in local history Nov. 3 — two propositions totaling $1.3 billion — the San Antonio Independent School District will completely overhaul Rhodes, to the tune of $47.4 million.
Although SAISD’s tax base is vulnerable to the pandemic’s devastation of the hotel industry and its effects on the value of other downtown commercial real estate, the school district remains confident a continued rise in overall values will allow it to finance the bond without increasing property tax rates. Early voting begins Tuesday. The lion’s share of the bond is in
Proposition A, which would renovate 36 schools for $1.21 billion.
The list includes Rhodes, which was built in 1953, and 20 other schools with main buildings that have not changed much since they opened at least a half-century ago. Most of the 21 highest-priority schools, including Rhodes, have heating, ventilation, air conditioning, plumbing, electrical and mechanical systems that date back at least 30 years.
Most would get upgraded classrooms, cafeterias and kitchens, restrooms and special-needs accessibility features.
Classrooms would be enlarged and flexible spaces would be created with adjustable walls and mobile furniture, allowing for social distancing as well as more collaborative learning when COVID-19 no longer is a threat. They would have more natural light, and outdoor learning areas also would be installed.
The other 15 schools were partly renovated under the 2016 or 2010 bonds and would be finished off with new fine arts and athletic facilities. All schools on this year’s bond list would get new interior and exterior security cameras, and some would get secured entrance vestibules that can be unlocked from the main office.
An additional 30 campuses with air conditioning chillers at least 15 years old would get new ones.
Proposition B would fund $90 million in technology upgrades, equipping every classroom with high-speed internet, audio systems, laptops or tablets and interactive smart boards.
A community task force that recommended the projects and a political action committee, Citizens for Quality SAISD Schools, are promoting the bond issue as a way to bring the aging facilities in the inner-city school district in line with more the more affluent districts on its northern borders.
“This is the first opportunity our district has had to put our buildings on par with our suburban peers,” Superintendent Pedro Martinez said.
But this year’s bond would fund only half of the $2.5 billion in longterm capital improvements the district has determined it needs. Martinez is planning for another election on a similarly sized bond within the next decade — which the district also estimates would not increase the tax rate.
That’s despite a pandemic-induced recession and a $450 million SAISD bond four years ago that increased the property tax rate by about 12 cents per $100 in assessed value.
Even amid the economic downturn, residential property values have continued to increase, bringing more tax revenue to SAISD. Some past bond debt will be paid off entirely in the next decade and interest rates on new debt are historically low, Martinez said.
Commercial real estate could take a massive hit this year, but SAISD would be assuming 30-year repayment terms for its new bonds.
Martinez said the 2016 tax increase has put SAISD in a position to take advantage of exponential growth in property values since then. The total assessed values of all the properties in the district flattened after the 2008 recession, historical data from the Bexar County tax assessor shows, and Martinez came to SAISD in 2015 frequently and publicly complaining the bulk of development was occurring in the suburban school districts to the north.
Then, in 2015 and 2016, assessed values in SAISD went up by double-digit percentages, bolstered by Frost Tower — the first new skyscraper in decades — mixed-use redevelopment and new housing.
Values have increased by about 8 percent every year since. Adjusted for exemptions, the total taxable value in SAISD nears $21 billion, an increase of almost 47 percent over the past five years. The greatest share is single-family residences, with commercial property close behind.
SAISD’s promise to finance this year’s bonds without increasing the tax rate is based on more conservative annual growth estimates of between 1 and 5 percent over the life of the bonds. Based solely on increasing home values, SAISD estimates the owner of a $100,000 home would pay about $200 more at the highest point of the debt repayment schedule, not figuring in exemptions.
There always are uncertainties, and the pandemic has exacerbated them.
“When you see these forecasts and trend lines, they’re just extrapolating the past, often the recent past, and that’s all they can do,” said Tom Tunstall, senior research director for the University of Texas at San Antonio’s Institute of Economic Development. “Who would’ve predicted COVID-19 or the fact that we would have the economy plummet to levels not seen since the Great Depression? This is worse than 2008, and for completely different reasons.”
The timing and distribution of a vaccine, and the presidential election’s impact on financial and real estate markets, will have big roles to play. It’s unclear how many companies will keep their employees home permanently, reducing the need for downtown office space, or how many properties will be thrown into foreclosure as evictions start again.
The Bexar Appraisal District’s chief appraiser, Michael Amezquita, still is calculating the pandemic’s effects on downtown real estate, but he estimates hotels in particular lost 50 to 60 percent of their revenue stream this year, and it could take them three to five years to bounce back.
“We’re still running through the numbers to try to ascertain what the impact of COVID is,” he said. “A lot of things haven’t been answered yet, that we can’t even look for the answer until late January, late February.”
Experts generally agreed San Antonio is in a strong position compared to denser cities with more developed centers. Steve Nivin, chairman of the economics department at St. Mary’s University, said there still is enough space downtown to pivot toward more residential or more commercial growth based the pandemic’s long-term effects.
“It’s not a bubble-type phenomenon where it’s a big boom and it’s going to pop and go away,” Nivin said.
Just west of downtown, Flores, the Rhodes Middle School principal, walked through a cafeteria with a kitchen so small that refrigerators had been moved to the dining area. He continued through a gym, locker rooms and auditorium reminiscent of the movie “Grease.” The bleachers barely pull out, and the air conditioning in the boys’ locker room couldn’t keep the temperature from uncomfortably warm.
The auditorium’s small wooden chairs are splintering, and the original blinds from the 1950s still hang behind red curtains.
“Depending on the results on Nov. 3rd, we could have a nice auction,” Flores said.