School leaning toward $25M bond issue
By Doug Lindner
SOLON– Twenty-five million dollars.
That’s the projected price tag of a bond issue the Solon Community School District (SCSD) Board of Education expects to put before voters in spring of 2014.
But it still isn’t clear what the money will buy.
The district has a wide range of options, including a new middle school and a high school auditorium, and some of those were discussed again at a Nov. 11 board meeting.
What is clear is that the district will have approximately $25 million in bonding capacity to work with.
School board members met with their bonding consultant, Tim Oswald of Piper Jaffray in Des Moines, during last week’s meeting. Oswald had presented the board with a worksheet of financial scenarios at the October meeting, and answered questions throughout a 40-minute discussion on facilities.
“So, you said bond $25 million?” asked board president Dick Schwab. “And that’s a safe number, that’s middle of the road?”
“That’s the number that your historical growth would support over the next three years,” Oswald said, noting it was the most aggressive of the three scenarios he provided.
If the property in the district continues to grow in value as it has in the past (100 percent of historical growth), Oswald has projected the SCSD has $31.76 million in bonding capacity for the period between 2014-2020.
At 50 percent of historical growth, the bonding capacity drops to $24.99 million.
As an added protection against declining values, the district will look to build a reserve fund out of available Local Option Sales Tax (LOST) revenues. Those reserves would serve as a buffer against fluctuating interest rates and property values, at least until the majority of the bonds were sold.
Under the financing scenarios, bonds would be sold annually through 2020, with the largest portion (in excess of $20 million) coming in the first three years.
Oswald pointed out, however, his scenarios were only starting points for discussion and would be adjusted for the scope of the overall projects and construction schedules.
Based on recommendations from the district facilities committee, the board is looking at a number of combinations which will eventually result in a fourth attendance center for the district, along with an auditorium and classroom expansion for the high school.
One scenario would create a 5-8 or 6-8 middle school, with the idea that a few years (four) down the road, a new 3-5 building would be created.
When you add all that up, superintendent Sam Miller said at last week’s meeting, you have about $24-25 million for a middle school and auditorium addition, with the multi-grade elementary costing about $6-8 million.
Miller threw out the idea of designing a 6-8 attendance center with a 4-5 wing which could eventually be a 3-5 school, sharing common areas like kitchens and gymnasiums.
All the variations are the result of an extensive evaluation of the district’s current facilities conducted by Struxture, a Waterloo architectural firm.
Struxture started its process in March, taking a team of engineers through the district’s three buildings and evaluating them not only on structural deficiencies but on how they compared to standards for ideal educational settings.
The firm also conducted small focus groups with community leaders and put out an online survey. The results were provided to the district facility committee.
With a bond issue looming, Struxture will be asked to provide some further concepts for the board to consider at another work session later this month.
The special session was tentatively scheduled for Monday, Nov. 25.
While the school system will not seek detailed specifications of any construction projects prior to a vote on the bond, board member Dean Martin asked to see some basic estimates on the cost of adding a practice gym to the mix.
“I think practice gym might not be the top of the list but it’s not far below either,” Martin said.
Board member Tim Brown said the added gym might improve support from voters, but he voiced concern about the dwindling amount of time to make decisions.
“If we’re looking at a spring bonding vote in February or March there’s going to be considerable effort over a short period of time to get material together to get buy-in from the community,” board member Tim Brown commented, noting constituents are going to want detail about what the district is proposing and why.
“If we’re looking at February we’re going to have to wrap that up in December,” Brown added.
One of the critical elements for persuading district residents will be the budget-neutral impact of the bond issue.
Based on the discussions at the Nov. 11 meeting, the school’s administration is hoping the bond issue will not raise taxes because the district will be replacing expiring debt with new obligations.
“That’s the ideal scenario,” Oswald said, “because you immediately remove taxes from the discussion point and you focus solely on why this project, why now.”