By Katie Dahlstrom
Herald Staff Writer
GOOSE LAKE —
Voters in the Northeast School District could decide whether the district should borrow up to $7 million to fund the proposed additions to the high school as early as next April.
The Northeast School Board met on Wednesday with architects from Modern Design Architects and Matthew Gillaspie, senior vice president of Des Moines based PiperJaffray, to discuss the addition and the district’s ability to pay for it.
The general obligation bonds from the elementary school will be paid off in the spring of 2014, allowing for the district to continue levying in order to bond for the addition if a referendum is approved by 60 percent of voters during a special referendum.
The proposed $6.5-to-$7-million gymnasium and science addition would include a 1,500-seat gym, community area, four science labs, four locker rooms, a fitness area and a PE classroom.
Enhancements would also be made to the existing weight room. The 41,000-square-foot addition also would require relocating the baseball field and could add parking lots to the campus.
Gillaspie also presented the board with different factors that could affect the decision to pursue a referendum and the bonds in 2013 or 2014 including sales tax revenue predictions, fluctuating interest rates, enrollment figures that could decline or even increase and cash on hand.
With the evaluation of property in the district at $302 million and a 5 percent statutory debt limit, the district has a $15 million debt capacity. Even with a $6.65 million bond added to the current obligations, the district will still be $5.89 million away from hitting its debt capacity, Gillaspie explained to board members.
The earliest the referendum approving the levy would be on a ballot would be April. The petition to put the issue on the ballot would require 15 signatures and need to be delivered to the Jackson County Auditor by Feb. 15 for a place on a ballot April 3.
According to Gillaspie’s estimates on interest rates over the next 20 years, bonding for the addition in 2013 could save the district $700,000 over the potential costs if the bond was taken out in 2014.
If voters approved the bond, the levy would be 20 to 35 cents lower than it currently is. Over its 20-year course, this equates to an annual savings of around $10 for the owner of a home assessed at $100,000.
“This isn’t showing how much more it would cost, this is showing how much less it will cost,” Gillaspie explained. “This is actually a pretty unusual discussion to have.”
The board would need to address the potential impacts the bond would have on the district’s on-hand cash. Gillaspie presented worksheets that estimate what the cash on hand would be for the district over the next 20 years based on the sales tax revenue if the district lost 5 resident students a year, continued a 33 cent Physical Plant and Equipment Levy (PPEL) and made $395,000 in purchases every other year for a school bus, technology and building maintenance. At its high point, the district would have around $1 million on hand, and at its low $23,000.
“This cash flow is not great,” Gillaspie said. “It’s acceptable, but not great.”
In order to improve the district’s cash situation, the board is considering adding a 34 cent voted PPEL. The new PPEL along with the bond issue would not raise taxes, Superintendent Jim Cox said.
Board members agreed the referendum should be pursued as soon as possible.