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Plano ISD makes list of Top 10 highest-debt school districts
Plano ISD ranked ninth on a list of the Top 10 highest-debt school districts released last week by the office of Texas Comptroller Susan Combs.
The rankings are a part of "Your Money and Education Debt," a study of the growth of public and higher education debt over the past 10 years.
According to the study, Plano ISD carries $976.6 million in total outstanding debt.
But Steve Fortenberry, associate superintendent for business and facilities services for Plano ISD, said ranking by overall debt does not provide a complete picture of the district's debt situation since the size of the district -- it is the 14th largest in the state -- impacts the amount of debt it accumulates.
Fortenberry pointed to the district's per-capita debt -- $3,014 -- as a more accurate measure of how much the district owes. If this metric was used to rank districts instead of total outstanding debt, Plano would rank 266th out of more than 1,000 Texas school districts, he said.
Most of the district's debt comes from general obligation bonds, which are used to pay for new construction, building maintenance and technology. Portions of these bonds are paid off every year with the debt service portion of the property tax rate, which has been at 33 cents per $100 of valuation for the past two years.
Of the debt the district had at the end of 2011, 34 percent will be paid off in the next five years, and 61 percent will be paid off within the next 10 years, Fortenberry said.
"When we sell new bonds, they're no more than 25 years in length," he said. "A lot of districts are going to 30 and 35 and 40 years, so generally ours have been sold much more conservatively so it pays off more quickly."
Nancy Humphrey, Place 3 on the Plano ISD board of trustees, said since bonds are approved by election, it is up to the will of the voters as to whether or not they want to approve new debt.
"We continue to be a growing district but not at the rate of growth we've seen at the past," she said. "We have an assertive maintenance and renovation program where we keep our facilities updated, and a lot of money that we spend in bonds is geared toward technology."
Humphrey said the board has two primary considerations when planning a debt election: whether or not the growth supports the needs, and whether there are assets that have "aged out." Plano has replaced two buildings, Memorial and Menden Hall elementary schools, over the past year.
"There is a certain pride that students have when students walk into a facility that isn't aging and decrepit and the learning that takes place tends to improved," she said. "The environment itself provides for better learning."
The district has saved $41.8 million over the past nine years refunding bonds and he district also maintains a AAA from Moody's, Fortenberry said.
"Most of our new bond needs, or future bond needs, will be more for renovations and replacements and not for opening new campuses," he said. "There may be a few, but not like there has been [in the past]."
The study also points out that the statewide growth of outstanding public school debt has outpaced both population and inflation by more than 125 percent between 2001 and 2010.
According to data provided by Plano ISD, Plano's debt increased by 37 percent between 2003 and 2012. When taken on a per-student basis and adjusted for inflation, Fortenberry pointed out, the district's debt at the end of 2003 is $18,030 -- a few dollars more than this year's per-student debt level of $18,011.
Dallas ISD tops the study's list of high-debt districts, owing more than any other district in the state with $2.6 billion in outstanding bonds.
The only other Collin County district on the list was Frisco ISD, who took the No. 5 spot with $1.2 billion in outstanding debt. Enrollment in FISD increased by 412 percent between 2001 and 2011.
Combs' office has released two similar studies this year, one exploring taxation by local governments and the other examining city and county debt.
The office has been promoting the studies as an informational campaign to provide residents with a closer look at how their local tax dollars being spent.
Each study also recommended changes to current taxation and debt practices to increase transparency. The education study proposes districts be required to disclose the amount of outstanding debt, existing debt service, amount of new debt, debt per capita and the length of proposed debt obligations on ballots and public websites prior to and during bond elections.
Public school debt: The statewide picture
-Total public school debt in Texas: $63.6 billion.
-Portion of statewide local debt: One-third.
-Rate of increase, 2001 to 2011: 155 percent. The comptroller notes this has outpaced enrollment growth and inflation by more than 125 percent each.
Source: Texas Comptroller's Office