Orem ballot may impact Alpine plans

OREM — Alpine School District may back off plans for a November bond and voted leeway election if Orem puts creation of a new school district on the general election ballot.

Orem and some nearby cities are studying the feasibility of pulling away from Alpine and forming a new district. Lawmakers this spring redefined rules governing how existing districts can be split into other, smaller districts.

On Friday, a legislative ad hoc committee discussed legal issues surrounding school-district divisions, including how to fairly divide current debt and how to elect new school boards.

The committee discussed an idea for legislation that would address dividing district debt when an area splits and forms its own district, said Rep. Dave Cox, R-Lehi, chairman of the committee.

The law passed in the spring requires newly formed districts to assume a fair amount of debt from the district from which it was splitting. Residents who live in its boundaries would pay property taxes to the new district.

Districts generally issue bonds — go into debt — to raise money to build new schools or make repairs or additions to existing schools.

But public-finance experts told the committee "that bond holders feel a little jittery about (receiving payments from a new district). They just want to deal with the original district," Cox said.

And Alpine School District chiefs have apparently heard the same message from their financial advisers. The district had planned to ask the public to approve in November a $240 million bond issuance and an increase in the voted leeway to generate $4 million.

But if the district waits until June to put the issue on the ballot, it will know whether Orem and nearby communities Vineyard, Lindon and Pleasant Grove will pull away to form another school district.