Last week I mentioned that our School Board will decide in early January on the type of financing for the proposed $14.5 million Alan Harvey Theater renovation. The choice between Capital Appreciation Bonds (CABs) and Current Interest Bonds (CIBs) offer very different costs to taxpayers.

I have created a web tax estimator to compare these two types of bonds. See https://HariTitan.com/bond-comparison.pdf for details. Using the 2012-13 average Piedmont property assessment of $821,467, a Current Interest Bond with a 1.5 repayment ratio would cost that taxpayer $5282 in new property taxes over a 25 year duration ($211 each year). With this CIB, we would pay 50% of the bond amount in interest over 25 years.

If instead we choose a CAB with a repayment ratio of 4, we would pay 300% in interest charges over the same 25 years assuming a 9 year tax holiday and would cost $14,086 over 25 years ($880 per year in years 10 through 25).

The default model inputs used are OK for comparison purposes and will change as we learn more about the terms of financing.

From a long-term financial perspective, it is better for us to go for a CIB and the annual tax increase should be affordable. The CAB option is sold on the unproven premise that it is easier to pass a bond measure if we offer a multi-year tax holiday.

A tax holiday reflects a "buy now, pay later" approach that may involve someone else footing the bill for what we borrow, spend and use now. The community should make this value judgement.

My tax calculator also shows that for each $100,000 property assessment, the average annual tax is $26 for the CIB and is $107 for the CAB in year 10. The CIB is well within the $60 legal requirement (Prop 39), however the CAB bond requires the District property valuation to rise on average 6.7% annually for 9 years. This CAB requirement is risky.

California State Treasurer Bill Lockyer said: "The only people these deals benefit are the financial advisers, who have collected millions of dollars helping school districts sell Capital Appreciation Bonds."

My tax calculator makes it possible to turn abstract repayment multipliers into actual dollar amounts that will show up in our tax bills. This is a huge missing piece of the puzzle that is not being provided by our financial advisers.