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HomeMy WebLinkAbout04-27-2022 Minutes Work SessionDr. 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 April 27, 2022 11:30 AM Falls Valley Elementary/Library 2544 Virlow Street Idaho Falls, Idaho 83401 I. Vice Chair Paul Jenkins called the meeting to order at 11:40 a.m. II. Opening Board Business A. Roll Call Greg Calder present via phone Carissa Coats present Randy Smith present Chad Dance present via phone Paul Jenkins present B. Welcome Visitors and Delegations Vice Chair Paul Jenkins welcomed Nick Miller and Chelsea Porter from Hawley Troxell, and Eric Heringer from Piper Sandler to the meeting. He also thanked Falls Valley for the use of the library and school for the meeting. Others in attendance were, Superintendent Scott Woolstenhulme, Executive Director of Learning and Instruction, Jason Lords, Executive Director of Planning and Personnel, Heath Jackson, Director of Technology, Gordon Howard, Director of Maitenance and Facilities, John Pymm, Executive Director of Finance and Operations, Guy Wangsgard, Tina Orme, Principal at Falls Valley Elementary and Board Clerk, Samantha Williams. C. Approve/Amend Agenda (Action Item) Vice Chair Jenkins asked if any Board members if an amendment was needed with the agenda. Hearing none, he asked for a motion to approve the agenda. MOTION: Carissa Coats moved to approve the agenda. Randy Smith seconded. Motion carried. III. Discussion Items A. Finance and Operations 1. Future Bond Discussion - Hawley Troxell, Piper Sandler Vice Chair asked Superintendent Woolstenhulme to introduce Nick Miller and Chelsea Porter from Hawley Troxell, and Eric Heringer form Piper Sandler. Dr. Woolstenhulme then asked Eric Heringer to present first. Mr. Heringer went though the district’s Bond and Levy information. He started with the background and historical data by explaining the differences between Bond, Plant Facility, and Supplemental Levies. A bond passes with a 2/3’s vote (66.6%) from the patrons. A school district can bond for capital projects. The funding or repayment source is from property tax. As soon a bond is passed, the district can borrow the money up front and repay the debt over time (up to 30 years). A plant facility will pass with a voter threshold of 2/3 (60%), these funds can be used for capital projects, typically repairs or replacing items. A plant levy is funded by property taxes and funds are received 6 months (property tax cycle). A supplemental Levy is a 50%+1 (simple majority) voter threshold. The purpose of a supplemental is any general fund expenditures. This is a also funded by property taxes. Like the plant facility, the funds are received every 6 months. The term for a plant levy is up to 10 years, and a supplemental levy is up to 2 years. Eric then discussed and reviewed the district’s election history and the district’s exist ing levies. The district has the following property tax levies in FY 2022: Levy Type FY 2022 Amount Expiration Supplemental Levy $5,800,000.00 FY 2023 Plant Levy $2,800,000.00 FY 2031 Bond Levy $10,000,000.00 FY 2035 Tort Levy $5,800,000.00 FY 2023 2 Emergency Levy N/A N/A Total $18,600,00.000 Mr. Heringer contined by discussing the market value growth. The District’s recent market value growth continues to exceed the 20 year compound growth rate of 8.11%. In years 2014 -2016 the annual growth was a slow. 0% up to 5%. From 2017- 2019 the growth jumped to 9%. From 2020 to current the market value growth is up to 11%. Mr. Heringer showed the Board a comparison of Region IV school tax rates in FY 2022. The state-wide average total property tax rate for combined school levies was $2.46 per $1,000 in tax year 2021 (FY 2022). Bonneville Joint School District’s rate per $1,000 is at $4.13. The district is at the higher end. Jefferson and Madison are the highest. Mr. Heringer reviewed the 2021 defeasement plus refinance outcomes. The district has: • Saved $4.6 million of future interest cost • Pay off a bond from 2006 election in 2022 (4 years early) • Pay off a bond from 2012 election in 2027 (4 years early) • Level out bond payment at $11.3 million per year through FY 2028 The district has received approximately $25.3 million from the School Bond Levy Equilization Program since 2006. The district’s debt capacity is as followed: Debt Capacity Calculation September Full Value – 2021 (FY2022) 6,003,405,624 Plus Urban Renewal Value 34,662,904 6,038,068.528 5.00% Total Debt Capacity 301,903,426 Less: Principal Outstanding (104,480,000) Plus: Adjustments-Principal Due 2022 6,510,000 Remaining Debt Capacity 203,933,426 Mr. Heringer discussed future bond levy and bond planning scenarios (this has not been Board approved, this is just a possible scenario) The district’s supplemental M&O levy expires in FY 2023. A renewal for FY 2024 will need to occur at an election prior to September 2023. Based on current conditions, renewing the supplemental levy at $5.8 million would not impact the tax rate. Renewing the supplemental levy at $6.8 million ($1.0 million increase) would increase the tax rate by $22 per $100,000 of value. However, this increase would be offset by 5.5% growth in market value. Mr. Heringer explained if the district structured a $29 million bond around the existing bond payent without having to increase the total levy amount about $18 million. This structure would require spending down $3.5 million of bond fund reserves. Mr. Heringer explained the requred ballot disclosures due to the House Bill 626 updates. The following is an example of a ballot for a $29 million bond. The interest rate anticipated on the proposed bond issue, based upon current market rates is (4.22%) per annum. The total amount estimated to be repaid over the life of the bonds, based on the anticipated interest rates, is $40,916,958 consisting of $29,000,000 in principal and $19,658,958 of interest, less $7,742,000 in estimated bond levy equalization payments. The term of the bonds will not exceed twenty years from the date of issuance. The new additional information that is now requred by House Bill 626 is as followed: The estimated average annual cost to the taxpayers on the proposed bond levy is a tax of $45 per $100,000 of taxable assessed value, per year, based on current conditions. This verbiage is the hardest part of the ballot to explain to patrons. Mr. Heringer closed his presentation with the interest rate update. Municipal Bond interest rates have increased significantly and rapidly since January 1, 2022. For example April 2020 the interest rates were between 2.0% - 2.5%. Today the interest rates have increased to 3.5% and will more than likely contiune to increase. We could see rates up in the 5% range. Mr. Heringer stated that there are three factors to consider when planning a bond. The first is affordability, the second is what is needed, and the last is transparency, having the trust of the patrons. Mr. Heringer turned the time over to Nick Miller, and Chelsea Porter from Hawley Troxell. Mr. Miller, who is a member of the district’s bond counsel explained the main services that Hawley Troxell provides to the district. Any election questions and advice, bond issue documents and approvals, tax exempt bond regulations ie…at bond issuance, and on-going, disclosure regulations at bond issuance and on-going, legal opinions at bond issuance and any legislation, on-going as needed. He explained that Mr. Heringer is the numbers expert, and he and Ms. Porter are the legal and verbiage experts. The bond team includes, Nick Miller, Michael Stoddard, S.C. Danielle Quade, Chelsea Porter, and Brandon Helgeson. Mr. Miller explained to the Board the timeline, if the Board decides to run a bond in November. The timeline is as follows: • Board adopts Bond Election Resolution – August 10, 2022 Board meeting • Ballot submission deadline – September 9th • Election – November 8th • Bond election challenge deadline (40 days) – December 18th • Board action to authorize sale of bonds – December or January meeting • Closing – Funds delivered – Early to mid February 3 Mr. Miller went through Idaho Code 33-1102 which states the purpose for which bonds may be issued. “To acquire, purchase or improve a school site or school sites; to build a schoolhouse or schoolhouses or other buildings; to add to, remodel or repair any existing buildings; to furnish and equip any building or buildings, including all lighting, heating, ventilation a nd sanitation facilities and appliances necessary to maintain and operate…purchase school buses and to acquire, develop or renovate school facilities for renewable energy systems”. In Idaho Code 33-1103, the Board of Truestees of any school district may submit to the qualified school district electors of the district the question as to whether the board shall be empowered to issue negotiable coupon bonds of the district in an amount and for a perio of time to be named in the notice of election. Mr. Miller explained what was required on the ballot prior to 2021 and the current updates. He explained what would happen if the district is not compliant with the ballot requirements. He then went through some ballot verbiage examples, and some possible ballot questions if the district were to run a bond in November or in the future. He then repeated the November election timeline to the Board. Mr. Miller asked if the Board had any questions or concerns. There were some questions regarding the timing of a bond and or a supplemental levy. Superintendent Woolstenhulme shared with the Board the idea of using Thought Exchange to see what the public’s thoughts are with how the district can address the growth that has or will impede the district. The Board liked the idea of having the patrons of the district express their thoughts. Superintendent Woolstenhulme stated that he plans to have the survey in the April 28th Family Update and will reach out to local news and newspapers with this endeavor. Superintendent Woolstenhulme stated “before we can decide on a bond, we need to know what the public’s thoughts are. This is a great way to do just that.” You can view the presentation slides through the supporting documents attached with this meetings agenda. Vice Chairman Jenkins thanked Mr. Miller, Ms. Porter and Mr. Heringer for their presentations. He stated that it was very helpful for future decisions and discussions of how to move forward with the district. B. Learning and Instruction 1. BHS Orchestra to Boise Philharmonic Travel Request Superintendent Woolstenhulme explained to the Board the reason for having a trip request discussion on the agenda. The request was brought to the district’s attention too late for the April’s regular board meeting for approval. The trip will take place before the May meeting. He asked the Board if they had any problems with having the trip on the consent calendar in May for approval and that the trip can take place. The Board did not have any concerns with this. The trip request will be on the May consent calendar for approval. IV. Closing Board Business A. Call for Agenda Items for Upcoming Meetings Regular Board Meeting - May 11, 2022 - District Office Board Work Session - May 18, 2022 - Sandcreek Middle School Regular Board Meeting/Budget Hearing - June 15, 2022 - District Office Vice Chairman Jenkins asked for any agenda items for upcoming meetings, hearing none, he asked for a motion to adjourn the meeting. B. Adjournment (Action Item) MOTION: Carissa Coats moved to adjourn the meeting. Randy Smith seconded. Motion carried. Vice Chairman Jenkins adjourned the meeting at 1:29 p.m. APPROVED: ______________________________________ Chairman ATTESTED: _______________________________________ Clerk DATE: ___________________________________