Iowa City School District Voters Pass Revenue Purpose Statement

Even amid the sound and fury of the diversity policy debate, by then waning down to its few remaining speakers, the Iowa City School Board paused to note another important event: the Revenue Purpose Statement (RPS) had won a narrow victory.

With a 6,079 voter turnout that eclipsed most school board elections but was still tiny compared to larger votes, the voters in the Iowa City School District voted 3,403 for and 2,671 against recertifying the district's RPS until 2029. The vote passed in every precinct in the district, losing narrowly in Coralville where there had been an organized resistance to the vote, and losing badly in Hills, which only had 87 total voters. (see voting results)

What recertifying the RPS means is that the district's use of local options sales tax dollars is certain to continue until 2029, the year the state has extended its local options sales tax (called SAVE). Before this, the district's use of the previously approved sales tax money in 2007 (called SILO) would have expired after 2017.

For spending and planning purposes, what this means for the district is that it can borrow against a percentage of those future dollars using a financial mechanism called Tax Anticipation Revenue Bonds (nicknamed TARBs). This will allow the district to borrow money to likely start progress on two if not three elementary schools in the next year, to open three years hence.

Supporters for renewing the RPS pointed out the pressing need for multiple infrastructure update projects and new buildings throughout the district, and the fact that TARBs do not increase property taxes. Opponents noted the district's past disappointments when it comes to the previous SILO vote in 2007, redistricting snafus, and general lack of accountability over the last decade.

Craig Hansel, the district's executive director of board services, told the board when he presented the TARB option to them that the district could borrow up to $100 million at the current time as a percentage of its total future sales tax revenue. At the time, however, he said that it would be unlikely that the district would need to borrow nearly that much, at least at one time, given the SILO money already raised and the other financial options it also has available.

Iowa City Superintendent Steve Murley said after the vote that he is excited to get going on the projects, and it is now incumbent on the administration to start bringing forth plans to the board.

"You'll start to see some of these plans within the next year," Murley said.

Murley said as another wrinkle of the TARB avenue, all funding must be planned and expended within two years of it being borrowed or it loses its tax exempt status. For this reason, the district will likely only borrow for a specific project or projects when it has its ducks lined up in a row, its land for the buildings picked out, its plans ready to go.

School board president Marla Swesey said after the vote that she was pleased that the RPS passed on the same evening as the diversity policy, which hung on to pass in its third reading after another round of heavy criticism with a disturbingly familiar 4-3 vote.

"The RPS passing will allow us to work on a lot of the goals we set with the diversity policy," she said, after being asked about the significance of the diversity policy and RPS passing at the same time.

Coming up soon of note: the consultants of BLDD Architects will have completed their study of the district's facilities, which should provide some direction for both the spending of this TARB money and the capacity available for meeting the diversity policy's goals.