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HomeMy WebLinkAbout01-26-2023 Minutes Work Session 9 30 amDr. Scott Woolstenhulme, Superintendent 3497 North Ammon Road, Idaho Falls, Idaho, 83401  (208) 525-4400  Fax (208) 557-6800  www.d93schools.org Board of Trustees  Chad Dance  Paul Jenkins  Greg Calder  Carissa Coats  Randy Smith Bonneville Joint School District No. 93 is an Equal Opportunity Employer Work Session January 25, 2023 9:30 AM PLC Building 3442 E Iona Rd Idaho Falls, ID 83401 I. Chairman Dance call the meeting to order at 9:30 a.m. II. Roll Call Paul Jenkins present Greg Calder present (arrived at 9:36 a.m.) Carissa Coats excused Randy Smith present Chad Dance present III. Opening Board Business A. Approve/Amend Agenda (Action Item) Chad Dance asked for a motion to amend or approve the agenda. MOTION: Randy Smith moved to approve the agenda. Paul Jenkins seconded. Motion carried. B. Welcome Visitors and Delegations Chairman Dance welcomed any visitors. Others in attendance were, Superintendent Woolstenhulme, Jason Lords, Executive Director of Learning and Instruction, Heath Jackson, Executive Director of Planning and Personnel, Guy Wangsgard, Executive Director of Finance and Operations, John Pymm, Director of Maintenance and Operations, Eric Heringer from Piper Sandler, Nick Miller from Hawley Troxell, Abigail French from Nelson, Hall, Parry Tucker, Phil Campbell, D93 News, and Samantha Williams, Board Clerk. IV. Discussion Items A. Capital Construction Options Presentation and Discussion Chairman Dance invited Eric Heringer from Piper Sandler to present to the Board. Mr. Heringer discussed plant levy and annual appropriation lease purchse financing as an option to the district. This type of financing works with large tax-based districts. This is a new concept to consider. Mr. Heringer reveiwed the plant facility levy basics they are as follows: • Approval required: 55%, 60%, or 66.7% (depends on tax impact) • Maximum term: 10 years • Cash flow: Property Tax Collections (end of January/end of July) • Use of funds: Capital projects (same as bonds) – repair, replace, remodel, additions, equipment, acquire land. Can use for new facility if cash flow is sufficient. • Ability to finance: Can use for lease/purchase under certain circumstances • State programs: currently, none 2 Mr. Heringer continued by explaining the idea of lease purchase with a plant levy. Some of the basic features of the lease/purchase agreement would include: •Lease payments would be subject to annual appropriation of revenue by the Board of Trustees during the budgeting process. •The appropriation of funds could come from the Capital Projects Fund (Plant Levy) or the General Fund or both •The district could choose to not renew the lease or to not appropriate funds to pay the annual lease, however the District would lose access to the leased property and forfeit the benefit of any prior lea se payments. •The District would have the option to purchase the financed project at the end of the lease term for a nominal sum ($10). •Works best for new stand-alone facilities or additions to existing facilites because renovations cannot be easily in a "lease”. Mr. Heringer then provided some pros and cons to the lease purchase with a plant facility •Pros o The district can leverage future plant revenue to finance a project today o The district would benefit from a lower voter threshold (55% or 60% approval) for the plant levy versus a bond o Plant levy statute – 33-901, Idaho Code references “lease purchase agreements” •Cons o Typical interest rates for an annual appropriation leases will be higher than a voted general obligation bond pledge. However, this is offset by a shorter financing term (10 years or less) to run concurrent with the authorized plant levy. o Lose the benefit of State programs such as levy equilization and school bond guaranty. o Limited to 10 years for repayment would drive a higher initial tax impact. Mr. Heringer gave some examples of districts and entities that have used this type of financing. Those include, Kimberly School District, Blaine County School District, College of Western Idaho, The State of Idaho, Fremont County Jail, Ada County Coroner Facility, City of Idaho Falls Police Station, City of Twin Falls Fire Station, and Chubbuck City Hall building. Mr. Heringer reviewed D93’s property tax levies in FY2023: Please see chart below Mr. Heringer also reviewed with the Board Bonneville District’s Historical Levy amounts and rates. 3 Mr. Heringer explained that the district’s recent market value growth continues to exceed the 20 -year compound growth rate of 9.29%. In the 2023 Fiscal Year, the annual growth is 38%. The state-wide average of total property tax rate for combinded school levies is $1.85 per $1,000 for tax year 2022 or fiscal year 2023. Finally Mr. Heringer reviewed the Bond structure which included the debt summary, school bond levy equilization program, and the debt capacity. Bonneville Joint School District, based on data from the Idaho Tax Commission and the District, the mathematical calculation of legal debt capacity for Bonneville Joint School District 93 is as follows: Mr. Heringer gave the Board an interest rate update. The bond buyer index history for a 20-year general obligation bond average is around 3.42%. The high is around 5.03%, and the low is 2.02%. The current is at 3.45%. Mr. Heringer closed by letting the Board and the Executive Team the 2023 election timeline. If the district runs a bond in May, the deadline for filing a resolution is March 27, 2023. Chairman Dance thanked Mr. Heringer for his presentation. This will continue to be a conver sation for upcoming Board meetings. V. Closing Board Business Chairman Dance asked for a motion to adjourn the meeting. A. Adjournment (Action Item) MOTION: Paul Jenkins moved to adjourn the meeting. Randy Smith seconded. Motion carried. Meeting adjourned at 11:00 a.m.