The School District’s Finance Director Bill Hanson kindly explained to the School Board last December just how the Red Plan’s finances worked. He used a simple graphic.
Would that I could post it here. Sadly my new computer requires skills I have not yet fully mastered so that I can not post it here.
Purporting to show “annual” fund transfers between operating funds and the debt Service Reserve Funds to pay off the Red Plan it manages to confuse me pretty thoroughly.
The Red Plan will take twenty years to pay off. The major contributor to paying off the bonds is the $122 million in operating savings. Operating savings is largely simple reductions of the staff, principally teachers. Divided by 20 years the School Board will be spending $6 million less on staff each year. Little of this annual “savings” to pay for our new schools reflects savings because of a diminished need for teachers. It is rather like not eating for a month and describing the reduction in food expenses as being part of a diet and concluding that the reduced costs for food are a form of savings. In a way this is true but then again its not.