The Alpine School District has hit pause on its controversial plan to push through a hefty $175 million lease revenue bond for a new school — a plan that drew widespread criticism from residents and the Utah Taxpayers Association.
School board members canceled a scheduled Tuesday public hearing to vote on the bond and are now considering “other funding options” for a high school in Saratoga Springs, a spokesperson said.
Unlike general obligation bonds, lease revenue bonds do not require voter approval.
Bond opponents argued the district was “rushing” the decision and “defying” both voters and the Utah Legislature — because a new ceiling on this type of bond has been passed by lawmakers and is awaiting Gov. Spencer Cox’s potential signature to become law.
The plan for the $175 million bond meant Alpine would exceed the proposed, new three-year limit.
“After reviewing multiple options and possible funding sources required to build a new high school, the Alpine School District Board of Education has determined that taking action on a lease revenue bond is not necessary at this time,” said district spokesperson Kimberly Bird.
In 2022, voters shot down a $595 million general obligation bond proposal that would have funded the new school and other initiatives. With the lease revenue bond, Alpine School District was going to “issue debt whether their voters want it or not,” the Utah Taxpayers Association said in a statement posted on its website.
For lease revenue bonds, Utah law mandates only that districts hold a public hearing and give notice of that hearing.
“One of the problems with lease revenue bonds is not only does it raise our taxes without us getting to vote, but we don’t even exactly know how much because they don’t have to tell us,” said John Gadd, a resident of Pleasant Grove who is running for a seat on the Alpine school board.
SB86 limits the financial value of revenue lease bonds that a school district or government entity may issue, setting a ceiling at a combined total of $200 million within a three-year period.
Alpine issued a $31.8 million revenue bond for Desert Sky Elementary in Eagle Mountain and the district’s West Transportation Center in 2022. Last year, it issued one for $81.8 million for a middle school in Eagle Mountain and portable classrooms.
If Cox signs SB86, the new limit would take effect May 1.
“Rather than engage in the proper process to dispute or amend the bill, the Alpine School District decided to defy it and saddle taxpayers with unwanted additional debt,” the Utah Taxpayers Association’s website said.
The lease revenue bond is not completely off the table, however, and may be issued at a later date, said Bird.
“The district’s capital needs remain, and the school board will continue to study available funding options to meet these needs, including a possible lease revenue bond,” Bird said.
The new high school will be located on 50-acre plot of land northwest of Utah Lake, between Saratoga Springs and Eagle Mountain. The board greenlit the $12.9 million purchase of the plot from The Church of Jesus Christ of Latter-day Saints in October.
Utah school districts can levy several types of property taxes, which have different rules. General obligation bonds are paid for through a debt levy and a district’s debt fund. Lease revenue bonds are paid for through a capital levy and the district’s capital fund.
Both kinds of bonds have to be repaid by taxpayers with interest, which varies according to how risky the investment is.
Alpine School District’s expansion comes amid a possible district split. The school board is currently considering five reconfiguration options that could divide the district into two or three parts — a move that could impact more than 84,000 students living in Lehi, Orem and surrounding areas as soon as 2027.
A possible split has been looming for decades due to its rapid population growth — the district covers nearly half of Utah County, which encompasses 13 municipalities and 92 schools.
A sixth proposal would keep the district as is. Any proposed change would hinge on voter approval this November. As of now, it is unclear how any debt issued before a split would impact a possible newly created district.
