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home : news : news Tuesday, October 13, 2015

3/23/2013 Email this articlePrint this article 
Northeast school board readies for April 2 bond referendum

By Jeremy Huss
Staff writer

Financial advisor Matt Gillaspie of investment firm Piper Jaffray says it's not often he gets to say a successful bond referendum will result in a lower property tax rate, but that's the case with a proposal on the ballot in the Northeast Community School District.

Officials at Northeast are gearing up for an April 2 vote that will ask district residents to authorize borrowing up to $7.5 million to construct a new gym and science classrooms at the high school.

At the same time, they will ask voters to authorize a 67-cent increase in the physical plant and equipment levy (PPEL) in order to cover maintenance and custodial costs associated with the estimated 40,000 square-feet of new space that would be added to the school.

Moreover, superintendent Jim Cox says Northeast can do both and still lower its overall tax rate as it prepares to pay off the district's 1995 elementary school bonds.

The school district's proposed budget for the 2013/14 school year would lower the property tax levy 13 cents, from $14.93 per $1,000 valuation to $14.80 per $1,000 valuation.

The Northeast Community School Board at a March 20 meeting authorized publishing the budget ahead of a public hearing that will be held April 9.

The proposed tax rate of $14.79733 is based on the legislature authorizing 4 percent allowable growth for Iowa schools and the approval of both the bond referendum and PPEL increase at the April 2 election.

A lower allowable growth rate set by the legislature would cause Northeast's property tax levy to decrease, as would failure of either of the upcoming ballot measures.

"On April 9, if the referendum fails, we'll have to revisit this," Cox told the school board at the March 20 meeting.

If the referendum does not pass, outgoing business manager Tina Bartels said the school board can authorize a "pre-levy" to raise funds in order to pay off the elementary school bonds two years early, in 2014.

The district last year set aside $165,000 to advance the debt payment schedule one year from the original 2016 date, a move that will save several thousand dollars in interest costs.

After reviewing the budget proposal, the school board adjourned its regular monthly meeting and moved to the auditorium for a special public meeting to take questions and comments on the bond referendum.

Rob Stensland and Kevin McConnell of Modern Design Architecture outlined the district's facility expansion plan, while Gillaspie outlined the financial implications of the April 2 vote.

Gym, classrooms and athletic fields included in facility plan

Just what would residents get if the bond referendum is approved?

A 1,500-seat gym, a four-classroom science wing, a new baseball field, improvements to an existing softball field, new parking areas and new athletic facilities that include an expanded weight room and a new community fitness center are all part of Northeast's plan if the $7.5 million referendum passes.

With an audience of more than 30 district residents, Stensland and McConnell reviewed a conceptual plan of the Northeast campus showing existing infrastructure along with the proposed additions.

In the plan, a new, four-classroom science corridor on the north end of the high school would lead to the new gym and athletic area that would be designed to "book-end" the facility and provide a visual complement to the auditorium. Parking would surround the new complex.

A new baseball field would be built on a 7-acre site located west of the elementary school, along with adjacent parking and a concession stand. The current softball field would be modified to meet regulations for a competition-size field by lengthening right field, and an additional parking lot would be constructed by the softball field.

A total of 120-140 parking spaces would be added with the construction.

The city of Goose Lake will be asked to consider extending Jackson Boulevard to connect to the baseball field and create a traffic loop to reduce congestion.

"This is a conceptual design of what-ifs. It's pretty close to what it looks like as far as planning goes, but further away as far as what the outside looks like," Stensland said.

The addition would allow sophomore and varsity athletic events to take place at the same time in two different gyms while a separate activity is going on at the auditorium, McConnell said.

An artist's rendering of the facility shows an archway over a glass entry to the proposed gym and science wing and an angled, sloping roof McConnell said will create a visual tie-in with the auditorium.

"The idea still is to show how the building would be used 24/7," he said, adding the school board wants the design to reflect the multiple uses of the facility.

Superintendent Cox said the gym portion of the proposed addition has garnered the most attention but the science classrooms are the most important part of the project for him.

Existing science classrooms are too small to allow for lab work needed to meet more-stringent state standards on science education, he said.

"We need the four science rooms because the new curriculum for the common core is coming out, and it says it has to be more hands-on," Cox said.

"This is probably one area of academics where we haven't been able to do what we want to do," he said.

The science rooms would have a classroom instruction area up front and five or six lab stations in the rear that would have a capacity of 25-30 students per room.

The architects were asked about the timeline for the proposed Jackson Boulevard extension and about issues related to water diversion.

If the bond passes, the school will immediately ask the city to consider extending the road, McConnell said. The road would improve traffic flow but is not essential to the project, he added.

Regarding water runoff, he said the firm would hire a hydrological specialist to develop a plan that would include some sort of temporary water storage.

"That's a major concern that has to be addressed, and it is in this plan," McConnell said.

Asked about legroom in the gym bleachers, Stensland said the firm would bring samples of bleacher options for the school board to test before deciding what to buy. The procedure was followed in choosing the seats for the auditorium, he said, and Cox noted the district did not opt for the cheapest available seats and kept seating capacity down in order to improve comfort.

Stensland said modern bleachers are more comfortable than those in the current high school gym.

"They're bigger, taller and spacier than they used to be. They have evolved," he said.

All of the new facilities would utilize fire doors and a sprinkler system, and would be fully air conditioned. They would be built with a combination of pre-cast concrete, traditional concrete block and other materials.

The architects said they will work with the athletic booster club on the design for the outside concession stand.

Cox said moving ahead with all the desired improvements will depend on whether bids come in under or over budget.

"While we want this, we may have to look and see if there are things we can remove," he said.

The project will include alternate bids for air conditioning at the elementary, installing keyless doors at all schools and installing security cameras, he said.

The project timeline calls for construction of the new baseball field to begin in June and construction on the science and athletic wing to begin in September. The baseball field would be ready for the 2014 season, and the gym and classroom addition would be open for the 2014 basketball season.

Show me the money

A 20-year amortization table shows Northeast can lower its debt service levy from the current rate of $3.03 per $1,000 valuation to around $2.80 per $1,000 valuation while still keeping up with principal and interest payments on the $7.5 million bond referendum.

Extremely low interest rates are what make the project possible without raising the tax levy, Gillaspie said, and adjustments in the general fund and management levies would offset the proposed PPEL increase.

Gillaspie based the payoff schedule on an interest rate starting at .55 percent, which is 30 basis points higher than an actual rate secured in a Nov. 8 bond sale in the Nevada Community School District.

If low rates hold, the district could end up with an additional drop in the property tax levy, Gillaspie said.

"There's such a significant difference in tax rates, you can almost guarantee the principal and interest on the bonds is going to be less than you're paying now," he said.

The estimated debt service levy of $2.80 assumes zero growth in district property values, which Gillaspie said is unlikely given values have increased 4-5 percent in the last two years. A 1.5 percent annual growth would allow Northeast to lower the debt service levy to around $2.12 by the end of the 20-year bond payoff.

If the referendum fails, the district's debt service levy would disappear when the elementary school bonds are paid off in 2014 or 2015.

"In this situation, the district is proposing a new bond that just takes the place of the old bond," Gillaspie explained.

Under the current plan, the owner of a home with an assessed value of $100,000 would save $9.71 per year in property taxes, and the owner of agricultural land assessed at $1,200 per acre would save 14 cents annually for each acre.

The estimate is based on a 20 cent decrease in the debt service levy, but Gillaspie said he expects the actual decrease will be closer to 30 or 35 cents.

Gillaspie said community members should be aware the referendum language lists limited purposes for which the money can be used.

"They can't just go out and do whatever with that $7.5 million. They have to do what the ballot says," Gillaspie noted.

He also cautioned the school board has no control over city and county tax levies, so the promise of a lower school levy doesn't mean residents' property tax bills will fall.

Cox said the increase in the PPEL is needed to hire a custodian and cover increased costs for the extra space being added to the Northeast campus.

If the bond referendum passes but the PPEL increase fails, funding for a custodian and maintenance expenses will come from the general education fund, Cox said, but he will ask the school board to put the question to voters a second time as soon as possible.

High school principal Alicia Christiansen commented there were eight athletic practices and events taking place at one time during a recent weeknight at the high school and middle school complex.

"This space definitely would be utilized," she said.

"If you pass this and if you build it, you will have solidified your high school for the future. Regardless of what happens with re-organization, the high school will be here," Cox said.

He ended the presentation with a plea for residents to vote April 2.

"It's really up to you. April 2, just vote. Whatever your conviction says, just vote," Cox stated.

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