District-split plan is not a clear winner
East, west teams weigh division of assets, debts
The proposal, reached by negotiators representing both sides of the district, was presented to east and west transition teams Thursday. The teams are expected to individually discuss whether to accept the proposal over the next two weeks, at least.
But in Thursday's team talks, past slights, future fears and bad blood kept seeping in — the very thing the negotiators attempted to set aside.
A sample: Is it fair to approve a deal that would sock it to taxpayers of the growing west side who never had a say in dividing the district when it is looking at $800 million, maybe more, in building needs? Is it fair that the east side for years has seen its tax dollars, which are more than half the revenues, go to west-side buildings while theirs crumble, to again be shorted money needed for building refurbishment and earthquake safety?
"I don't think we want to rush to judgment," said Steve Newton, east-side transition team chairman. "I'm not certain it's the right thing to do."
In the proposal: Buildings and everything in them would belong to the district where they're located. Both sides would work together to transition services like payroll and student programs, and share records and information. Portables, buses and other big equipment would be split based on how they've historically been used. Retirement and other money committed to employees would follow the employee to one side or the other.
The $196 million in bonds recently sold would be divided 57 percent for the east and 43 percent for the west. It's complicated. But basically, the bonds would still pay for what they've been designated for — all are going to buildings on the west side — and both sides will still repay the debt as they had planned, which essentially is having the east side pick up 57 percent of the debt (by nature of its tax base). The west side, however, would have to give the east side $112 million, which is their share of that money. The west could use cash from the nearly $50 million unrestricted fund balance, make payments with interest or come up with some other type of IOU, so that neither district's viability is threatened.
The idea, said east negotiator Mike Shelton, is to distribute the money in the same way as the debt load.
All this would be divided effective July 1, about a year before the official split date, letting the new boards of education, to be elected in June, know what they're working with so they can hire employees and make a seamless transition.
East and west transition teams had a tough time with different parts of the proposal.
For the west, it was the bond part.
"At the end of the day, the split comes down to ... the west pays the east $112 million ... despite our share of the population," which is greater than the east side and is rapidly growing, said West Jordan City Councilwoman Melissa Johnson. "It doesn't seem fair and equitable at the end of the day."
Some estimated taxes would have to go up around 20 to 30 percent under the proposal. Others cautioned that nothing was official.
West-side negotiator Ricky Horst cautioned against looking at that bond section separate from the whole proposal, noting that even after paying back the east side, "there's still a ($100) to $200 million differential ... in our favor." He also urged the team to move forward despite past hard feelings.
Meanwhile, some east transition team members wondered if the bond proposal treated them fairly. Chairman Steve Newton noted only part of the bond costs were considered, thus leaving the east side with 35 percent or so of the proceeds, but 57 percent of the debt.
East team member LaMont Smith also wondered why building values weren't negotiated — the big contention over dividing schools based on geography — considering east buildings are much older than the west buildings.
"We considered their dollar values," east negotiator Mike Shelton said, "and we found it to be a very contentious point, and one which could be argued over a number of ways over a long period of time ... and go on and on forever." Hence, the proposed compromise.
But Newton questions whether the proposal would work best for the east side, and if the new district would be better off trying to persuade lawyers in arbitration to give them a better shake.
"I think there are some myths out there driving what's fair and equitable, driving some of the anger that's out there, that we really can't do anything about," such as building needs and rich vs. poor. "We couldn't educate the entire public, but we could educate three arbitrators."
West-siders wondered if arbitration wouldn't be better, too.
But both were cautioned that arbitration is a gamble.
The east team ultimately voted to get more information on how much bond money has been committed so far, the value of available real property, the proposal's effect on net assets, and ballpark costs for both sides to separately operate.
Discussions on both sides will continue.
E-mail: jtcook@desnews.com
Recent comments
I live on the west side, didn't get to vote and have paid taxes...
J | March 31, 2008 at 1:09 p.m.
This is more like the Civil War than the Revolutionary War. You...
Anonymous | March 29, 2008 at 6:59 p.m.
We should all be able to vote on everything that affects our taxes...
I Should Get To Vote | March 29, 2008 at 12:14 p.m.
