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Mercer Matters Podcast: Episode 1 – Vote No with Mike Cero for the 2025 Mercer Island School Bond
149 Plays1 month ago
Welcome to the first of a three-part series diving into the $165 million Mercer Island School Bond Measure, set to hit ballots in April 2025. In this episode, we sit down with Mike Cero from the Vote No campaign for a candid conversation about why he is voting no for the upcoming bond measure. Our mission? To cut through the noise and bring you unbiased insights from key stakeholders on both sides of this pivotal issue.
This series is all about equipping the Mercer Island community with the facts they need to make an informed decision. No spin, no agenda—just straight talk.
Don’t miss our upcoming episodes featuring Dr. Fred Rundle and Jennifer McLellan from the Vote Yes campaign, offering their perspectives to round out the discussion. Subscribe now and join us as we unpack what this bond means for our schools, our kids, and our future.
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Transcript
Introduction to Mercer Matters Podcast
00:00:00
Speaker
All right. Hi, welcome to the Mercer Matters podcast. In this episode, we'll be discussing the April 2025 Mercer Round School District bond measure with Mike Ciro, who's chairing the No Committee in Opposition to the Bond. um I'm Ben Sharp. I'm your host. I'm
Personal Connection to the Topic
00:00:15
Speaker
a Mercer Round resident.
00:00:16
Speaker
I've got three kids in the Mercer Round School District. And as of this recording, i'm I'm undecided about how I'm going to vote in the in the bond measure. and And frankly, I think a bit undereducated about the measure in general. um So I'm looking forward to learning from from both sides ah of the discussion, um both with Mike and then later with Dr. Rundle.
00:00:37
Speaker
um So Mike, thanks very much for chairing the Know Committee.
Guest Introduction and Community Involvement
00:00:41
Speaker
I know it's it's a volunteer role and you're just doing this on your own time as a service community. So First, I want to say thanks for for taking the time and and all the effort and your contributions to the debate. um Would you mind just introducing yourself and kind of giving us your background briefly so those listening could kind of understand a little bit more about you as you as you talk through this? Okay. Mike Ciro. I was very active with the schools ah back in the day with my kids who are now adults, 20, 25, 27, 29, and
00:01:09
Speaker
five twenty seven twenty nine um I went through Sunnybeam and our dearest friends are what we call Sunnybeam friends, similar to... Right on, yeah.
00:01:20
Speaker
I know how that goes. Right, right. All our kids started at Lake Ridge and then I unexpectedly got deployed. And my wife, who's a full-time orthopedic surgeon at the time, raising three kids, we're kind of at her wits end handling things, but just know how things are going with the single parent in practice.
00:01:43
Speaker
And that's when we were introduced to private schools. And then we went to two, went to Forest Ridge and one went to Lakeside and got back from Iraq and got, continued to stay active with the community served two terms on the city council.
00:02:08
Speaker
And, um, And then after that, continued to stay close with the community. And i when the Prop 1 city bond came out in 2018, I was kind asked by folks to
Opposition to the Bond Measure
00:02:30
Speaker
organize something. And one thing led to another. And we started I started this PAC, Mercer Islanders for Sustainable Spending, which I'll refer to as MISTs.
00:02:40
Speaker
In 2018, we soundly defeated ah Prop 1. And guess what? To everyone's surprise, the city has not deteriorated into something we don't enjoy.
00:02:52
Speaker
so we've been kind of working behind the scenes. Got a great group a team that's really come together for this exercise. murder and And in general, what MIS does is...
00:03:06
Speaker
We focus on reviewing and analyze the city and and to a lesser extent, the district's finances and projects. And then we'll provide policy recommendations to the local electeds.
00:03:18
Speaker
And occasionally we'll reach out to Islanders to help give their opinion to critical decisions with the council or the district. Again, not so much with the district. This is an exception.
00:03:29
Speaker
Basically, I want to thank the team that I've got together. They've really been doing great work. They all have. either ah kids in the district or grandkids in the district.
00:03:43
Speaker
And they provide a valuable service of thoughtful research perspective that hopefully the community will ah be stronger with. That's kind of what the democracy is listening respectfully to both sides.
00:03:55
Speaker
Yeah, I completely agree. And I i appreciate you know you and your team's efforts.
Community Values and Necessity of the Bond
00:04:00
Speaker
you know You put out a lot of of great information. I know it takes a lot of time. And and again, you're not getting paid to do this. So ah thank you very much.
00:04:08
Speaker
I want to start off kind of by framing this discussion a bit. you know My feeling is that most parents in general, but certainly parents of Mercer Island, value education. I think ah Most, if not all, would put the education system at the top of their list in terms of why they moved here. If you talk to people who've moved here recently, you know what what was a priority for them?
00:04:31
Speaker
um And I think it's, you know, it's it's fair to say that, you know, most people value education. It's important. um and And want our kids to do as well as they can to be educated, um you know, to the greatest extent possible.
00:04:45
Speaker
And I assume it's fair that that you would fall in that camp as well, Mike, right? That, you know, you want to see the best public schools immerse around possible. of course. Yeah. All right. so So with with that sort of perspective, um you know there's there's certainly a multitude of ways to accomplish a great education for kids.
00:05:06
Speaker
And
Clarity on Bond Measure Specifics
00:05:07
Speaker
ah you know the district is asking for $165 million dollars ah for a variety of projects in in a bond measure that's come out for vote in April.
00:05:18
Speaker
And, you know, I had a friend who thoughtfully pointed out to me, says, you know, when someone's asking for $165 million, dollars you know, the burden of proof ah is on the district to demonstrate the need and the value of putting these tax dollars to work. And I said, well, yeah, that's a that's I agree.
00:05:32
Speaker
um And so, know, I think we're talking with you today, Mike, to kind of understand from your perspective, why you think this bond measure ah is not the best fit for our students and and for their education.
00:05:43
Speaker
um there's you know I think some some bond measures have no opposing committee, just kind of like a no-brainer, and they they get passed, and there's not a lot of opposition.
00:05:54
Speaker
I think this bond measure particular, if you look on social media next door or Facebook, and and even just the yard signs. I was driving down Island Crestway the other day, and I saw right next to each other one sign saying it's a 40% tax increase and the other claiming only a 7% tax increase, and we'll talk about that here in a little bit.
00:06:13
Speaker
um So there's clearly you know competing claims. And you know as somebody who's trying to make a thoughtful decision, it's kind of hard to figure out you know really where the facts are. And so that's kind of my goal in talking to you today is kind of understand from your your perspective um you know what this really is, what it's going to cost us, and and and and why you know why you think people should vote no.
00:06:35
Speaker
So maybe
Historical Perspective on School Bonds
00:06:36
Speaker
my first question, that that was kind of a bit long, just kind of set the stage. But my first question, Mike, you've been around a long time. You know you mentioned your involvement in Prop 1 other initiatives.
00:06:46
Speaker
Would you mind just stitching together briefly kind of a history of the ah the school bonds on Mercer Island um that kind of got us here over the last 10 or 20 years and then you know kind of helped set up ah the district's ask for this $165 million dollars bond you know i'm I'm looking forward.
00:07:02
Speaker
Sometimes I do look back on this campaign, but it's not unheard of for the district or for the city, the islanders, to vote down school bonds.
00:07:13
Speaker
Yeah, and I and i think you know that's you know my understanding is that there's been a ah sort of checkered past with bonds with some of them, you know the smaller bonds have been approved and and some of the larger ones have been rejected. And and so I was hoping to kind of...
00:07:29
Speaker
your smaller, more accountable bonds. You know, one of the issues that we have with this $165 million dollars bond is that it's it's quite large, even though the district, Fred, will say that it's inflation adjusted, it's the same size as the last one. Well, it's not inflation adjusted to the Seattle Bremerton CPI, which is the only one that I'm familiar with.
00:07:53
Speaker
I think it comes in maybe $120 million. instead of 165 relative to the last bond that passed. ah passed And that's an issue that ah he'll bring up to you, I'm sure.
00:08:06
Speaker
Yeah, no problem. So maybe the the next question that i have, you know for this bond measure, can you kind of give us an overview of of the projects that you believe are important?
00:08:16
Speaker
yeah know There's a multitude of different projects that this bond yeah will get done. Which of those are sort of important must-haves or nice-to-haves in
Impact on Academic Performance and Cost-Effectiveness
00:08:24
Speaker
your view? let me see if I can answer that.
00:08:27
Speaker
I will use what the Yes campaign is saying. Bonds are for buildings. Levies are for learning. So let those parents out there who have children in the school district, this is not going to affect, impact their learning going through the system.
00:08:48
Speaker
And so I'd like to disconnect this bond from academic performance. As matter of fact, whenever you go down the list of projects in the website,
00:09:01
Speaker
um there is very little, if anything, about but improving academic performance. You know, a lot of it has to do with buzzwords or collaboration, creativity,
00:09:16
Speaker
reducing community, reducing stress, inclusion, conservation. But there's nothing there that drills down to academic improving academic performance.
00:09:31
Speaker
And actually, we kind of know that. Anecdotally, you know i mean you have a you have a child at saint monica saint monica is not an architectural ah masterpiece there but they you i think you're probably very pleased with everybody who i've talked with saint monica seem to be very pleased with what they're getting there um taking it one step further we have four elementaries out there And the newest one, the Northwood, which was, i don't think it's out ah question of question to say gold plated.
00:10:11
Speaker
It does not perform any better than the other ah elementary schools. So it's not. and In terms of academic performance.
00:10:22
Speaker
According to academics to the OSPI, which the ELA, math, science, both at foundational and and college level preparation. Matter of fact, um, you I'll just leave it at that. Um, I think, um, I'm looking at my numbers right now.
00:10:40
Speaker
Yeah, they are actually Northwood is, on average. If you average those three, ah Northwood has the worst average than the other, three Island Park, Lake Ridge and West Mercer, even though it's the newest, um,
00:10:56
Speaker
elementary there that we have on the island. So I just want to disconnect this bond to what the quality of learning that you that kids are receiving at the different schools.
00:11:09
Speaker
Yeah. And I think it's – yeah, that' that's an interesting point, you know, is is I think a lot of us look at, okay, well, you know, obviously, you know, we want to have nice facilities for our kids and things. But is, yeah you know, is that truly fundamentally important to providing a good education?
00:11:28
Speaker
And I think to your point earlier, we, you know, this was years ago, but we went and looked at Eastside Christian over in Bellevue and they touted, you know, very, very solid academics. They're one of the better schools in the state, um, you know, in terms of their ratings.
00:11:42
Speaker
And I was like, man, this campus is old and dated and not very nice, you know? So, uh, and as a parent, you walk in, you're like, man, this place doesn't look very good, but the academics were great. Um,
00:11:53
Speaker
And so yeah i think the point you're making is reasonable that, you know do you really need a state-of-the-art facility to provide, you know, great academics? Now, just to elaborate a little bit more on that. so you know, Miss, my expertise, if you will, whatever it might be, is toward the city. so Because I served two years on the on the count, ah two terms on the council. So I know the ins and outs.
00:12:19
Speaker
Although I did quite a bit of volunteering to include different committees. on the district during the day. kind of lost my train of thought where I was going with that. So go ahead.
00:12:30
Speaker
Sorry. No, no problem. But if you pick it back up, just, just let me know. um So ah again, are are there any, are there any of the proposed projects that you look at that are must haves and would you structure that as like smaller, smaller bonds to address maybe the fire life safety or the HVAC equipment or things like that? Or,
00:12:51
Speaker
you kind of look at all of it as nice to haves. You know, i it kind of leans north more toward the nice to haves. yeah I'm always critical when we justify replacing buildings because of design life. You know, design life is is a false premise for replacing buildings, but it's something that we rely on often and just say, oh well, okay, it's a design life. We're going to change it. It's not necessarily true.
00:13:17
Speaker
But I just go down the list of, of the the projects and there I don't see any that are directed toward academic ah performance. you know Connect the core, you know it's kind of interesting, they they at the IMS they they have a hallway of sorts to connect the core from one to the next to get the kids out of the elements.
00:13:44
Speaker
But then at the same time, they have two large scale landscaping projects to get them in the elements for outside classes. So you kind of can't have the same. So for for everyone who wants to, they do not like that outdoor campus, if you will, there's probably the same amount of folks that think it's pretty good to get the kids outside walking from one area to the next.
00:14:12
Speaker
That's fair. do you Do you know, and if you don't have the data in front of you, no problem, but do you know what portion of the $165 million is going to be used to to do the modernization of of um IMS? $99 million is for IMS.
00:14:31
Speaker
So over half of the bond is... is the work and Yeah, and I will tell you that within that design, i would but venture to say that, again, it's it's very general, the cost breakdowns, but the city and the district, they have a record of going for premium designs, premium designs.
00:14:56
Speaker
Case in point, and I was in the midst of this, was the fire station. That's a premium design that costs a top dollar. And Northwood, it's my understanding, anecdotally, mind you, that, again, not too many expenses were spared for this.
00:15:14
Speaker
So a smaller bond would would give the public a a better idea of just what is being proposed. Although in the, they're talking but about a biophilic design, which has, if you look at my newsletter that I've been sending out,
00:15:31
Speaker
It has links to biophilic design, if you don't know what that is. Mike, what is that? What is that mean? A lot of glass, lot of wood, high ceilings, landscaping inside.
00:15:44
Speaker
it just spells, smells. Sounds expensive. Very expensive. Pretty. But very, very good. Sure. And, you know, that's one of the considerations that I've been thinking about that I want to ask Dr. Rundle when we talk.
00:15:57
Speaker
um And again, that episode will be available at the same time this is released. You know, the the question that I was going to ask him um is just with respect to the...
00:16:09
Speaker
The construction costs and, you know, ah basically every project that I'm aware of has, ah you know, over last four or five years has ran massively over budget from multifamily to government projects.
00:16:20
Speaker
um And, you know, that's a that's a concern I have. ah with with but these projects is, you know are they going to be delivered? What's the
Cost Implications and Marketing of the Bond
00:16:29
Speaker
chances of them being delivered you know within budget?
00:16:32
Speaker
Or does the the value of the the work that we get for $165 million, you know does that end up getting eroded because of you know further inflation or or cost overruns or or various things? Do you have ah you have a sense for the district's past performance in terms of delivering construction within the stated budgets? I don't.
00:16:49
Speaker
I think it's a good assumption. i do know that the fire station exceeded its budget. They had some some issues with that. you know Maybe you know one way it's being marketed is $165 million dollars bond, ah but actually it's million dollars bond.
00:17:08
Speaker
but i do all my analysis I look at it from the perspective of of the taxpayer. In the life of the bond, it's going to be $231 million, which actually makes sense that it should actually be marketed as $231 million dollars bond.
00:17:25
Speaker
because And that includes interest, right? I mean, you got to pay the banker just like you got to pay the mortgage on your house. yeah And furthermore, the consultant reports, their charts that I use to get my numbers, look at the amount that the bond increases.
00:17:45
Speaker
Well, it doesn't just, I think it increases 1,242 to the the median household, that includes both interest and principal. So to be consistent, it actually should be 231 million. let's Let's stay on the cost here for a second. So you quoted a cost of you know about $1,200 per household.
00:18:07
Speaker
And have been trying to figure out, there's a lot of debate. And I mentioned the signs earlier, 7% 40% quite disparity. ah seven percent and forty percent is is quite a disparity i What I did was i actually loaded every resource I could find into ah into Google Notebook LM, and I asked Google's ai ah to calculate this for me. And ah and and their increase was about from $1.44 currently to $1.89 per 1,000 assessed in 2026, which is about 31% if I do the quick math on that.
00:18:42
Speaker
Could you take us through the math on the tax increase um and kind of how that works?
Tax Rate Calculations and Comparisons
00:18:47
Speaker
Yeah. and And I want, this is the same game plan that we use for the city's Prop 1. And I would love for the electives to understand what our game book is so that they use that in developing their apps.
00:19:05
Speaker
Does that make sense? So what they do is they look at the rate, the rate that you pay for on a median assessed house. so it's about So it's about 2.2, 2.3 million is the median assessed value of a house these days on Mercer Island.
00:19:22
Speaker
And then they back into the rate. And then again, just an hour ago, Fred briefed, what our local school rate is compared to other 12, 13, 14 other communities around and was quite proud in saying we have the lowest rate.
00:19:40
Speaker
Well, yes, but the amount you pay takes into consideration rate and the value of your home. So we have valuations that are much higher than the surrounding communities.
00:19:54
Speaker
So it just goes to follow that rate times value, you're going to have a smaller rate to produce the same amount of money.
00:20:05
Speaker
As a percentage, because home values are generally larger than they might be elsewhere. Exactly. So from the taxpayer perspective, ah when was the last time you and your your wife talked about the rate going to the grocery store or ah paying for this school activity or that school activity. It just doesn't.
00:20:26
Speaker
As a percentage of our income or you know whatever. yeah Not very often. Registers is the actual money that you pay. And how does Mercer Allen compare it to other district in terms of the the actual money that we pay?
00:20:41
Speaker
Depends. It's the nominal value. ahll put it that way. Okay. We're still working those numbers. Um, to be very exact, but it's it's significantly higher.
00:20:53
Speaker
When I looked at, what were the numbers I looked at? Sammamish, Issaquah, Bellevue, Bainbridge, in general were $1,000 higher than for local school taxes than those districts.
00:21:08
Speaker
Sammamish were about about the same as Sammamish. So there you go. So I still want to get down. So the 40% is taken straight from the documents of their consultants.
00:21:22
Speaker
And that's the Piper Sandler PDF document. oh yeah okay So 2025 with no debt. And this is the the median assessed value home, which is around 2.2.
00:21:35
Speaker
two point two Okay, you can write this down. 2025, no debt. Meaning if this did not, well, no debt, the no debt chart, your property tax will be 3,191.
00:21:49
Speaker
And 2026, with this bond, your property tax would be 4,473. That's difference 1,282, which is change of 40%, increase of 40%. Again, those numbers, 2025, 3,191. 2026, with the 4,473. What is that, Ben?
00:22:00
Speaker
ah two hundred and eighty two which is a change of forty percent increase of forty percent again those numbers twenty twenty five three thousand one nine one twenty twenty six what' the bond four thousand four hundred and seventy three what has that mean I'm doing the math here real quick.
00:22:20
Speaker
So that's a difference of about $2,000, $2,082. Is that about right? Okay. Sorry. i must wrote So you have and then without the the debt, it's ah what was the number again?
00:22:34
Speaker
oh three thousand one hundred ninety one okay i got it Yeah, so if i just do 4473 divided by 3191, I get 1.401. Okay. so and is thating so now if So let me go more into it, and I'm going to answer your question.
Understanding Tax Increase Figures
00:22:50
Speaker
I can guarantee you if this bond passes, your local school tax will increase for the median home we're talking about 40%. ah forty percent $1,282. I can guarantee you that.
00:23:04
Speaker
What they, because that's what they do, and and and remember, is as they compare that increase, $1,282, with the total property tax package, which which I just adamantly disagree. It really gets underneath my skin, frankly.
00:23:21
Speaker
Meaning because there's other moving pieces within the property tax package, right? um Your whole property tax consists of taxing entities State school, there's a slice for state school, sound transit, King County, yep Port of Seattle, City of Mercer Island, fire, libraries, and other miscellaneous stuff.
00:23:41
Speaker
so And if you get really bored, you can take out your tax statement and it shows all that stuff, but no one ever pays attention to it. Yeah, so they who specify that your taxes are only going to increase 7%.
00:23:54
Speaker
they cannot that will I guarantee you that will not be true. I can guarantee you the 40% to the slice of the local school will be 40. I can also guarantee you that that 7% relative the to the whole pie will not be true.
00:24:12
Speaker
Because no one is going to do the research and find out how much King County is going to increase their taxes. Port of Seattle, that will just be $1,282.
00:24:23
Speaker
On top of mind you, the increases of, again, to go down the list, the county, Port Seattle, City of Mercer Island, fire libraries, etc. Is that clear? Yeah.
00:24:35
Speaker
I think so. So let me reframe this based on, cause I just kind of had a bit of an aha moment. So what, what you're saying is the 7% is sort of, you know, maybe, maybe the increase, the estimated increase of the total property tax.
00:24:50
Speaker
So if you've got, if you've got $8,000 a year in property tax, well, I don't know. I don't know what the math would be on the, on the, on the one, two, eight, two, I could do it real quick, but I'm on the spot, but basically your no but let's, let's just agree with their numbers.
00:25:05
Speaker
you okay have a the medium at The median household will increase 7% with the $1,282. But that does not – that 7%, that $1,282 does not consider the increase in the other taxing authorities, the county, the Port of Seattle, City of Mercer Island,
00:25:29
Speaker
fire, libraries, and others. Now, Ben, you're listening to the legislature. Do you think those other entities are going to not increase their taxes?
00:25:41
Speaker
You know, i so I generally think taxes tend to go up with time. So like I say, I can guarantee the 40%. I can also guarantee the 7% is wrong. But the but the point is, i think, again, just just to be clear, the point is that the 7% is arrived at based on the total amount of property tax.
00:26:00
Speaker
And this is the school-specific increase, the bond measure-specific increase on the total is roughly 7% increase. And what you're saying... but Okay. And okay. So, so really kind of both are true, right? I like to stay in my lane. We're talking about local school tax.
00:26:19
Speaker
And there's another important reason why we need to do the analysis with just that slice of the tax pie that we're talking about. Because it reinforces the ne the natural checks and balances of asking for money by each one of these different taxing authorities.
00:26:37
Speaker
So what happens now is... We'll use the example of this bond and the school. So when this bond, if it's marketed and sold as only 7%, well, they're kind of getting a free ride and having a denominator that has nothing to do with their slice of the pie.
00:27:01
Speaker
ah denominator yet The denominator being the whole pie, the whole tax pie, instead of just their slice. That's fair. Yeah, that's fair. I agree. and And I see where you're coming. And, you know, so so put another way, both figures are true, right? I mean, the 7%, you would argue, has more moving pieces. And so that's maybe a little little more difficult to pin down, maybe a little more fantasy numbers.
00:27:26
Speaker
Whereas the 40% is pretty clear, right? you're You're taking what the local Mercer Island school portion of the tax is with no debt, and you're comparing it to with the bond debt,
00:27:38
Speaker
And you get you get a 40% increase. I think you and I just did the math together. but But both are true. It's just it's just sort of framing. Well, yes. yes I kind of like to say that 40% is more true than their seven percent and and ah and and And I can appreciate your framing, right? Because because you're right. There are going to be ah number of other – well, yeah, there's going to be lots of other changes in in one's property taxes of which um you know the school district has no control over, obviously. And so those numbers are all going to change.
00:28:11
Speaker
Um, and I'm going to ask you about that. What's kind of, you know, what's coming down the pike for us with the city of Mercer Island in the future. Uh, so let's bookmark that for a sec. Um, but, but yeah, I, I, I, that's really helpful. I think I understand. Let me
Future Borrowing Needs of the Community
00:28:25
Speaker
just say another thing is that, um, uh, Wednesday or so we submitted an ad to the reporter and, you know, surprisingly to me, um,
00:28:38
Speaker
they weren't going to publish the ad and it was an ad documenting the 40%. You'll see it in the reporter tomorrow. It was an ad talking about the 40% and um they were pushing back or they wanted to, I had to prove it.
00:28:55
Speaker
I had to show my documentation to it, which probably I guess that's neither here nor there, but I was, I was very surprised that they wanted to see documentation. on what I was paying to advertise.
00:29:08
Speaker
And it went through the fact checking of the Mercer Island reporter, no less a ah reference than them. So ah you'll see the ad. oh so so So it was, it checked out, they agreed and they're going to publish the ad. That's what you're saying.
00:29:22
Speaker
Okay. Okay. Interesting. Okay. um well Well, that's, that's, that's helpful. Thanks for, for taking me through it. um I appreciate that. um So I alluded to this question, I guess maybe we'll just go right to it.
00:29:38
Speaker
So we're all right now looking at this bond measure in isolation. You know, what's the what's the impact going to be on our property taxes and in blah, blah blah um But you know there are other needs of our community.
00:29:52
Speaker
um yeah I think the the school district may have future needs for borrowing and for other improvements. Certainly the city you know with the the city hall issues and and various things. Could you just sort of take us through um what you see out there, bigger picture in terms of other borrowing that the community may need to do and just just to Just so we can evaluate this tax increase with, you know, what else is going to be potentially coming down the pike, yeah you know, from your perspective.
00:30:22
Speaker
Yeah. so So there the elementary schools are also in need work. And they're going to, after this bond, they're going to ask for three more bonds, space probably two to three years from each other.
00:30:41
Speaker
I've seen several references where it starts 2029 and 2032 and 2036 of up to the three of them totaling 240,000.
00:30:54
Speaker
It's kind of hard to get that information. You have to go to one briefing talks about the timing. Another briefing talks about the amount. So that's what I've been able to piece together. And that does not include, let me see where I have my notes here.
00:31:10
Speaker
Yeah, I think there's something on the Mercer Island um on the bond website that references um three older schools that would still need improvement. $247.5 million. $245 million. dollars That's for all three. Yeah, all three. The the total of those three bonds.
00:31:28
Speaker
ah any In addition, during that time frame, they would ask for the cap and tech levy. but They would have two levies, another two of those And then they'll probably have a transportation levy.
00:31:46
Speaker
There might be another levy also. But then in addition, the city probably will come back in 2027, maybe, actually, maybe even 2026, which I would anticipate would be 100 million plus bond for the public building that's that would house the maintenance facility, the police.
00:32:09
Speaker
ah some other yep some other departments in the city. And then after that, you still have to have a bookmark, although there's been some creative thinking, but I've got to think that they're still going to want another $100 million ah for the city hall proper.
00:32:25
Speaker
So there's quite a bit coming down the pike, and every ask is going to have to be very efficient and somewhat frugal. Do you see, so are there any um of the you know, if we look at our property tax now, is there anything expiring that's kind of coming off there that's that's going to be paid off that drops off?
00:32:45
Speaker
ah There is. Yeah. yeah So the present bond drops off in about 2027 or so.
00:32:56
Speaker
Okay. But then it gets backfilled with this bond, this 165 slash 231 million bond. so the the mill rate will remain the same at 1.89 or another way of saying there will not be any relief to the taxpayer because it gets back filled with this one.
00:33:19
Speaker
I
Impact of Bond Rating Downgrade
00:33:20
Speaker
see. So, so is it, so the, the, the tax total tax goes up for a couple of years and then drops back down after the previous bond is paid off. Is that correct?
00:33:30
Speaker
No, it's straight lines up. it's straight lines. The scenario is a straight lines at 1.89. And then the appreciation of the home will increase your, your tax.
00:33:44
Speaker
The tax. Okay. Okay. That's helpful. Yeah. and i noticed speaking of that, maybe get your thoughts, but they, in the Piper Sandler document, it was, I thought it was interesting that the assessed value growth sort of like terminated at 2%. And, and if you look back in time,
00:34:00
Speaker
I don't think if we've ever had a year where it was just 2%, maybe one year. So that was, I don't know, maybe wishful thinking that we'd only see 2% appreciation. Well, we're researching that.
00:34:11
Speaker
I'm concerned that, yes, that is a conservative 2%. two percent The mill rate will stay at 1.89, but as as the homes appreciate, you know probably more than 2%.
00:34:27
Speaker
The mill rate stays the same as the tax bill will increase more than what's documented in that Piper Sandler chart. Yeah. and And perhaps they arrived they arrived at 2% because that's the the Fed's target inflation rate. I mean, maybe was just as simple as that.
00:34:41
Speaker
That's the only justification I could think of. Yeah, that would that would probably make sense. So interesting. Yeah, I just thought it was is's kind of funny. You look at the 2014 to 24 numbers and where it's all double digits saved for a year or two.
00:34:53
Speaker
So yeah, that was that was interesting. All right. Well, that's for helpful. Thanks for thanks for and insights on that. sort of another related question. You may or may not have insight into this. And so if you don't, that's that's fair. But I was listening to Dr. Rundle talk about the our bond rating was lowered ah recently. And I'm just curious, do you know if that action has been... So when a bond rating is lowered, your your borrowing costs increase because you're riskier borrower for those listening, generally how it works.
00:35:22
Speaker
And I'm wondering, has that Has that bond rating adjustment been included in these calculations? Meaning, I'm assuming our interest expense may be higher than what was forecasted as a result of the the bond rating being lower. Do you have any insight into that?
00:35:38
Speaker
You know, this goes to the to the board. ah The bond rating, and the only reason I say it goes to the board is because, understand the chain of command, if you will.
00:35:49
Speaker
I'm a citizen. The folks I talk to are citizens. The board works for the citizens. and I talk to people about this all the time with reference to the city, the board works for the citizens of Mercer Island.
00:36:03
Speaker
ah Dr. Rundell Thread works for the board. I mean, of course, he's very, he does a great job interacting with the citizens, but technically the chain of coming in is the board. So I will refer to responsibilities to the board. So, you know, under the board,
00:36:21
Speaker
The ratings not only changed, downgraded once, but twice, Ben. Once in 2002, when it went from big A, little a, a, to ah capital A, small a, one.
00:36:35
Speaker
And then again in 2024, it was downgraded again to large a, a, two. So, of course, that's going to ah affect your your interest rate. And I can only assume that Piper Sandler did their estimate based on, i didn't even check on it, but based on the present downgraded rate.
00:36:54
Speaker
Yeah, I just wasn't sure if – because because you know that was a big change. And then obviously, the interest rate environment over the last year has has increased dramatically. And so you know my question was – and again, i don't know if you have insight or not, but those are two major changes that may affect the borrowing cost.
00:37:09
Speaker
And I was just curious if this Piper Sandler presentation sort of included those changes in their figures or not. I wasn't sure when they – Well, I mean, the downgrade – Was this report dated? In 2024 and we're 2025. So –
00:37:22
Speaker
Certainly they... Oh, yeah. Their presentation December 13, 2024. So, yeah, one could one could assume that that was ah that was included. Okay. That's helpful. Now, why does that happen, you might ask? Well, part of that is a lot of it was dependent upon general funds or general reserves.
00:37:39
Speaker
And reserves, they have a policy to have it at 8%, but it went from 9%, almost 10%, to about 3.5%. And those were... to about three and a half percent um and that that was those were conscious decisions that the board made, which are having implications.
00:37:58
Speaker
And was was some of that, i assume some of that was COVID funding related or was this post-COVID? Well, it all kind of ties together, ah not recognizing or not accepting that the COVID funds were one-time funds.
00:38:15
Speaker
But if you use the COVID funds in justifying increased salaries that last a long time. Yeah, wage increases. You're going to have the inevitable, you're have to take from somewhere and where they took to make up for those COVID funds was in the reserves. And the cost of that was something that's going to be borne by citizens of Mercer Island with a lower bond rating higher interest call it, higher interest.
00:38:41
Speaker
Yeah, and and ah Dr. Rundle just sent ah message out to the community about you know layoffs and reduction force and stuff. And so it looks like you know some of that is is now hitting staffing levels.
00:38:52
Speaker
um agree that That is completely independent of this bond. so ah you can That's fair. You can approve a bond that's three times the size of this 165 or 231 And it will have no bearing on ah what happens to the staff.
00:39:11
Speaker
Yeah. The staffing levels. Yeah. Cause these funds, the bond funds are not meant for operating the district. Correct. Yeah. Okay. All right. Well, that's very helpful. um Mike, is there anything that, that you want to point out or, or discuss that I haven't talked about anything that I've, I'm sure there's lots that I've missed.
00:39:29
Speaker
um But anything that, that you feel as we kind of wrap up here is important for people to understand. you
Community Concerns and Academic Priorities
00:39:35
Speaker
know yeah there's there's an element There's an element of this bond, if the public passes this bond, and again, i don't normally do anything with the district because such an emotional subject, right? You're dealing with the most prized possession that we have on this earth.
00:39:53
Speaker
So I've always tried to stay away from The reason I got involved with this is because so many people out of the blue would come to me and say, you know, we're having this problem and that that problem. And, you know, it kind of stems from, it sounds like you might be one of them that have left the school district. We've had over enrollments decreased for Islanders around 560 570 since about 2019. And there's a of the wokeness the schools that people are frustrated with and they want to there's a lot of the the wokeness
00:40:24
Speaker
in the schools that people were frustrated with and they want the policies to change to where they're more focused on academics. You know, the, the one of the directors kind of fell on a sword for the SAT, having SATs testing on the island.
00:40:43
Speaker
This is an island that puts so much emphasis on schooling and college isn't for everybody, but you know, I'd say 90 plus percent of parents expect students their kids to go to college.
00:40:57
Speaker
And it's that lack of focus on academic and academic rigor. I had one of the um candidates for school district tell me the reason he's running was because my daughter's not getting any any ah homework at the middle school.
00:41:13
Speaker
Well, I mean, how does that prepare you for a high school? You know, the citizens out there, yeah, you've got the expense of the bond. You've got the priorities are nice to have of the bond.
00:41:25
Speaker
You've got the academic issues. But you've got to recognize that this will send a message to the board affect those things that the academics.
00:41:39
Speaker
That's something, again, that the bond will not impact at all, the academics. other than giving a message that priorities need to be with academic and academic rigor.
00:41:51
Speaker
So is it fair to fair to say that that you characterize this bond as a referendum you know for or against the sort of the policies of the board over the last four five years? think you said that gets read in between the lines. How could you not?
00:42:06
Speaker
yeah how could you not Yeah, sure. Okay, no, that's helpful.
Conclusion and Contact Information
00:42:10
Speaker
Well, Mike, thanks thanks very much ah for for taking the time to talk with me. um I certainly learned quite a bit from you. And i again, appreciate ah the work that you're doing to educate people on this.
00:42:20
Speaker
um For those who are listening, ah do you you mentioned you have a website ah where people can go to kind of learn more about the work you're doing. It's www.miforss.com.
00:42:32
Speaker
andful or ss dot com Or you can shoot me an email at Mike Cero at M I for SS.com.
00:42:42
Speaker
And your last name is C E R O for those listening. Okay. Yeah. That's, um, yeah, one, one word Mike Cero or no spaces or anything at M I for SS.com.
00:42:54
Speaker
Okay, great. And is that how you get on the newsletter you referenced earlier as well? Well, Mike, ah thanks thanks very much for spending the time and wish wish you the best. Okay, Ben. Thank you for what you're doing also. ah You're very welcome.
00:43:06
Speaker
Good to talk to you.