Loading...
HomeMy WebLinkAbout09-01-2015 Work Session Minutesi_l _='v3g-LEJOINT SCHOOL DISTRItrT NO. 93'S'tttde.nt .9uccess b-), l)r't*r " 3497 North Ammon Road. ldaho Falls, ldaho, 83401 0 (208) 525-4400 0 Fax (208) 529-0104 O www.d93schools.org Dr. Charles l. Shackett, Superintendent Marjean Mcconnell, Deputy Superintendent Scott Woolstenhulme, Assistant Superintendent Work Session of the Board of Trustees Tuesday, September 1, 2015 at 8:00 PM District Board Room ll. Roll Call Vice Chairman Paul Jenkins Trustee Greg Calder Trustee Jeff Bird Chairman Brian McBride Treasurer Amy Landers present present present present present lll. Welcome Visitors and Deleqations Chairman McBride welcomed Superintendent Charles Shackett, Deputy Superintendent Marjean Mcconnell, Assistant Superintendent Scott Woolstenhulme, Chief Financial Officer April Burton, Director of Safe Schools, Maintenance and Operations John Pymm, Energy Conservation Specialist Don Trauntvein, Director of Curriculum and lnstruction Michaelena Hix, Director of Human Resources Dr. Shalene French, Communications and Community Relations Phil Campbell, Rocky Mountain Middle SchoolVice Principal Thomas Kennedy, Bonneville High School Principal Heath Jackson, Bonneville High SchoolVice Principal Levi Owen, Hillcrest High School Principal Doug McLaren, Hillcrest High SchoolVice Principal Josh Haggerty, Hillcrest High SchoolVice Principal Cory Telford, Technical Careers High School Principal Craig Miller, Discovery Elementary Principal Ken Marlow, Finance Committee members Troy Clayton and Chad Dance, Scott Straubham of Hummel Architect, Kurt Karst of Alderson, Karst & Mitro Architects P.A., George Bidstrup, Heidi Roth, Tammie Mccammon, and Board Clerk Mary Mortenson. lV. Bond Discussion Chairman McBride opened discussion on moving foMard to bond for a high school in the November 2015 election. This discussion will include three areas: Financial, Best Design for High School students, and Political Review. Financial report was delivered by Finance committee members Troy Clayton and Chad Dance. Key points were:. Create a Bond that made the most financial sense and worked for our community. . The shorter the Bond, the less interest we pay and is better financially; however, the rate increases for the homeowner. . Our goal is to formulate a Bond with a strong financial structure and to not create additional variables or increase the burdens on our fixed income patrons. . We propose a '17.5 term Bond, cost $58.3M with $7M interest and with $2.17l$100K monthly for the homeowner. . GroMh assumptions have changed: Bond 2013-0%, Bond Spring 2015 - 2"/", Bond November 2015 - 4%. . Bonneville County's groMh assumptions are currently at 4.5-4.6%. . This is the first year we have seen groMh and assuming a 4% growth rate currently, is a safe place and will lessen criticisms from the community. Board of Trustees Brian McBride Paul Jenkins Amy Landers I Jeff Bird Greg Calder l. Call to Order - Chairman McBride called the meeting to order at 8:00pm. . A 19.5 year term would lower the tax payer's portion to $1.50/$100K property value. . The increase in Market Value and growth assumptions will lower the homeowneis tax increase. . Our goal was to save the District interest money and make it palatable for the patrons. . More affluent patrons prefer shorter term bonds; less affluent patrons prefer longer term bonds. . lf another recession occurs during the term of the bond, the bond payment will be met and all other levies would be managed appropriately. We will always adjust to the market conditions based on our needs. . lf you add the auditorium and sport complex to the high school, with the term still at 17.5 years, cost of $66.5M, it would cost the tax payer $3.25l$100k property value. For a 19.5 year term, the tax payer's portion would be at $2.42l$100K home value. lnterest would also increase. . lt is all dependent on groMh whether or not the debts can be paid for without raising taxes.. Financially, we try to identify as increase that would cover the cost of what we can build. . Once levy rates are raised, it is really difficult to lower them. What would the community be willing to support? We have raised the levy rate that will pay for this proJect. The last long term increase in the levy rate was for Hillcrest High School built in 1992 and briefly in 2007 when the state shifted the burden of public schools from property tax to sales tax. But our levy rales have gone down in the last 20 years. lf we do not have any debt, then we would be able to lower our levy rates. lf growth happens, then levy rates will rise. . With increased Market Value and groMh, we are able to collect the funds to pay our debts off in a shorter period of time. . The Bond Levy Equalization from the state is also affected by the Market Value and growth assumptions; the higher the grolvth, the less percentage the district receives from the state. . Most commercial buildings have 20 yearterms. A shorter term would keep interest rates lower and make the building more affordable. Cash flow is effected by interest rates. To lock in capital at a lower rate is good finance sense. The length of the bond is crucial to the support of the community. . Recently the legislation changed to allow schools to bond over a 20 year term; however there are tradeoffs for an extended bond term. Market Value is the driver in all these decisions. . To change the term on a bond, refinance is not an option and an extension would require voter approval. Patron's response is dependent on the facts available, nol on assumptions. That's how financial decisions are made. . For every $1M reduction in cost, the levy rate changes by $0.02. (+/- $0.16 per million of added or reduced building costs) . lnflation for the year is 4%, increasing the bond from $56.1M to $58.3M. Best Desiqn for Hioh School students Design report was presented by Scott Straubham of Hummel Architects and Kurt Karst of Alderson, Karst & Mitro Architects P.A. Key points include:. ldaho is currently ranked 2nd in the country for contractors with an employment rale at 13.7yo. Utah is 36th in the country, with a 1 .4Yo employment rate, therefore, we could see an increase of those contractors involved in this project. . Supply and demand is what drives the price of materials. . There are limited number of sub-contractors, which can increase the cost of the building. r The construction of this building would be durable, basic quality, middle of the road building, easy to maintain, is operational, serviceable, and economical over the years to come. High schools see a lot of wear and tear. . The Middleton building is just a model to compare cost and design; not necessarily the plan that will be built. lnflation, construction costs, materials, and serviceability is what formulates the projected cost of the building. Middleton building was designed by a different architectural firm; therefore, the current design would be based on the core capacity of 1,800 with classrooms for 1,500 and any additional spaces, such as the auditorium. When you cheapen up a building, the long term costs are not seen upfront, but at the end of the bond. Deterioration increases as the building gets older. Maintenance issues down the line can be costly which increases the plant facility levies. Good design and good thinking eliminate deterioration, but could increase costs. Such as using a 5/8 inch wallboard vs. the common % inch wallboard to help increase durability. Reduction in Bond value, would reduce the quality of the building: roofing, lockers, or sight development, etc. Looking at square foolages will be the best way to look at cutting costs. The cost being quoted is comparable to what we built Hillcrest High Schoolfor in '1992 and many corners were cul to save costs any way possible. Adding an auditorium can be expensive per square foot - seating, lighting and sound systems, and not utilized as much as other areas of the school. The auditorium could double as lecture space, with seating which includes desk pads and screens, and partitions to create classrooms, even the back stage could be a classroom. Auditoriums can have multiple uses, such as lecture room, class meetings, presentations, guest speakers, performances and class instruction, etc. Building in our climate creates a different set of rules; a harsher climate results in a higher construction cosl: insulation costs, mechanical efficiencies, etc. A building design is based on what you like and what you don't like and then what you want to include in the building, such as, the auditorium, sports complex and core capacity needs and what not to include, such as swimming pools. The design and function of lhe building is important in the campaigning for the Bond. Currently, timing is good, and even in the future you could not do what you can now. lnterest rates are not going to go down and right now,s a better time to borrow money and a better time to consider adding the auditorium, the sports complex and extra classrooms at a much lower cost. Tiered ballots or multiple ballots allow the people choose what plan they want, to make it their school. Let the people decide, not the board. The high school is the first question; if they vote Yes, then would you like to add the auditorium, the sports complex and extra classrooms at these extra costs. A No vote would not have the option to vote on additional projects. lt would be clear to the voters to know what they are voting for. Each ballot would require a 2/3 majority to pass. To bond for the high school in November 2015 and then bond for the auditorium and sports complex in August 2016, would still allow for the school to be completed together. This would be estimated on the same bid and with the same contractors. The direction of the District is forming a new trend in developing larger schools to meet the growth potential of the district. Our 15 year plan includes the building of 750 capacity elementary schools. The Performing Arts Center at Hillcrest High School could not utilize three high school performing programs. Both Bonneville and Hillcrest High Schools currently use the facility at Hillcrest. Adding the elective performances, choir and band concerts, would hinder the elementary use of the facility as well. It would be best overall for some type of performing arts facility to be built in the new high school. lf an auditorium goes ove l,000 seats, the cost increases significantly and the safety codes change. An auditorium is a community entity and enriches the community. Any proceeds from renting the facility are put back into its upkeep and repairs. Meeting was recessed at 9:38 p.m. and called back to order at 9:48 p.m From our discussion thus far, where does everyone stand substantively -. Trustee Calder '1,800 core, 1,500 seats, auditorium, sports complex; '19.5 term, $2.42 levy rate increase . Treasurer Landers 1,800 core and seats, auditorium, sports complex . Vice Chairman Jenkins 1,500 core, auditorium 1,800 core, 1 ,500 seats, tier ballot 1,800 core, 1,500 seats, auditorium, sports complex Political Discussion Chairman McBride led the Board in this discussion. Key points are listed below: Trustee Bird said he would vote No on the high school, but would vote Yes in August 2016 on the auditorium and sports complex if the high school bond passed. Political criticisms from the past Bond proposals include -. bond was not specific enough as to what the money will be spent on . length of term for 2013 bond was too long . perception of building a middle school would keep us out of split sessions and building a high schoolwould put us into split sessions . middle school is cheaper, better option . tax increase . perception of a Cadillac high school vs. not doing it right . location . most expensive building in SE ldaho . bond amount was too high We will be in split sessions by the fall of 2017 before lhe high school is built because of the delay of passing the bond. What happens ,f the Bond fails again in the November? We need lo be very clear, for they (the opposition) stated that if the bond fails, then they can do a survey to find out what the community wants. lf the bond fails again, building the high school is still what is best for the children. lt is still the right solution. The survey would help determine why the bond has not passed. What will the board do post November needs to be addressed. Past bond in spring of 2015 ran with no auditorium and sports complex and would increase the tax levy rate $4.92l$100k property value; this November 2015 bond including the auditorium and sports complex would raise the tax levy rate $3.25l$100K property value. Paying less and getting more. The public concern will not be the tax levy rate, but the dollar amount of the bond. Based on the accounting numbers, if the cost estimate was lowered $5M, we would still be able to build a good school with different building costs. Competitive building bids are effected by the subconlractors and who are required to be skilled in the trade. Lowering the contingencies are also an option to reduce the cost estimate. We won't know what the cost will be until all the bids come in which might be lower than the $58.3 the bond is proposed at currently. The Board is the ultimate decision maker on how the money is spent. Possible cuts from the proposed design could include not developing the sight as planned, saving up to $8Mi replacing the brick exterior with hard board, saving approximately $160K; lowering the contingency funds by $500K. The bottom line is as Mr. Jenkins stated, "lt's for the kids." The decision is to build the base high school at $58.3M, 1,800 core, 1 ,500 seats, auditorium, and sports complex. Are we going to lower the contingencies or tightening up the ballot language? The construction manager said his advice to us is to set a budget and then go to our folks and say, 'What can we get with this budget?' lf there are things excluded from that budget, is it worth to exceed our budget to get those items? Our patrons are going to want to know what they are voting for. Right now there is not time to set a budget and get it on the ballot in November. The cost estimate is based on the current price per square footage. Are we going for the same resolulion we did last time or are we going to add the auditorium and sports complex? And we need to determine lhe length of the bond. The bond can be reduced by $500K by lowering the contingency fund proposing the bond to be $57.8M. The cost of the Trustee Bird Chairman McBride auditorium is $6.7M and the Sports Complex cost is $2.25M and the sight development cost is $8.2M. Posing the same resolution will not be the best decision politically. We can relate to the community the reasons why the auditorium and sports complex are on the ballot again. Market Values, groMh, and interest rates are better; it's a wiser decision overall to add the auditorium and sports complex now rather piece it together later. Politically adding those items in November might not be the best decision. However, when you consider our existing performing arts center and sports fields, they will not be able to handle three high schools events and practices. Adding an auditorium to an existing structure will always cost more than adding it when first constructed. The Board has made a sincere plea to the community to come together, to truly heal the community. Politically, our concern is lo the opposition and how they are going to try to persuade voters. The plea is to the community is we have made the decision, now get behind us. lt is the right thing; and if that group chooses not to be opposed, it will pass. So are we going to change what our children need and what we know is right because we are afraid of an opposition group? To continue to fight against it, is costing the community thousands of dollars and costing our children their education and effecting our teachers. The last two bonds that have failed, the auditorium and sports complex were taken out; the high price tag is what the voters did not like. We just need the school built; it is not smart for our District not to add the auditorium and sports complex. We see the implications at Madison and Rigby and we don't want to be part of that. This is the right thing to do, now it is time to let the people decide. As trustees of the School board, we need to be financially responsible; it will cost the district a lot of money to do it over. We'll leave the politics up to the people. We all know the best option is the complete high school; for $3.25l$100K property value, we are all on board because it is the best for kids. lf it fails, we had put what is best for kids out there. This is for their education and it should not be in trailers. lf we put that on the ballot in November as Chairman McBride and Dr. Shackett have proposed, we need to stand by that. The politics do matter, for if it does not pass in November, it hurts our children. There are a lot of people that want this district to be smarter fiscally, such as shortening the term to 17.5 years. ln the past we were basing the lost bond on a 0% growth rate. We will have the complete high school for better education, safety and cost. We need to also understand what sharing the performing arts center and sports field do to our employees, scheduling nightmares, and with increased wear and tear forcing more maintenance and repairs. The District has made great efforts and progress with student testing and we should be proud of our student's accomplishments. The test scores are high. We can guarantee that if we put in the auditorium and sports complex, that we will have higher test scores. We need to own our decision and get out there and promote itl lt just doesn'l make sense nol to finish the school properly in the situation we are in now. At last year's cottage meetings, a common queslion was, "Why are you not building the high school the right way?' lt will be important to educate the people on the bond. Bonneville High school was built in the late 1970's and just recently they have completed their baseball fields. lt took a long time and lots of fundraising; donation of time and labor and Education Foundation donations, etc. Those involved in getting this accomplished will only ask why did we not do it right the first time. Politically, the bond term should be 17.5 years. With the decrease in contingencies, the bond amount would be $65.9M and the tax levy rate increase amount will drop slightly from $3.25. Thoughts from the District Administration - Do it rightl and make a partnership with the opposition and help heal the community. lt's a good thing to advocate for the complete school; $3.25 increase tax levy rate is greatl We will need to educate the people; the rates are low and we are saving money. People will appreciate that. We have always felt that doing the hjgh school the right way, was the right thing to do; however, big numbers scare people, therefore it goes back to educating the people. The cost will go up. Now is the time we get what we need for a lower price; it is better to bond for the $65.9M than the $58.3M and build the complete high school now when the cost will be lower. Does the 19.5 term help us politically? Will the smaller tax levy rate increase be more appealing? About 43% of our student body are on free and reduced lunch. Taking the fixed income community into consideration is an important factor. The voters will still see the $65.9M with either term. The shorter the term, the less interest is paid. We need to do what is fiscally responsible and what's best for the children. Comments from the l\ilayor and City Council - We are behind you and support you. We understand you need a facility; we understand that property values are being adversely affected by the fact that District 93 can't quite get it together. We are concerned about going for it all. We are in the position to support you and wondering how to solve that politically. After three bonds that have failed, now you are going out to bond for more. I would love to see these things, but politically I lhink it's dead; what's best for the students, is getting something in place. Politically, the tiered ballot idea puts on the ballot what schoolthe community is willing to support, lets the people decide. The ballot can include two questions, what is the question and how are we going to do it. Politically that would be helpful to turn it over to the voters to decide. The District Administration and our bond attorney will write three questions for the board to vote on at the regular meeting September 9, 2015: (1) the base high school; (2) addition ofthe auditorium and sports complex; (3) and the complete high school with the auditorium and sports complex. lf we cannot make a decision next week, will not have the time needed to prepare a resolution by our September 14, 2015 deadline for the Bonneville County and Bingham County election offices. V. Call for Aoenda ltems for Upcominq Meetinqs A. Regular Meeting - Wednesday, September 9, 2015 - District Board Room 7:00p.m. B. Work Session - Bonneville Student Council - Wednesday, September 16, 2015 - Bonneville High School 11:30 a.m.-1:00 p.m. C. Work Session - Hillcrest Student Council - Wednesday, September 30, 2015 - Hillcrest High School 11:30 a.m. - 1:00 p.m. D. Regular Meeting - Wednesday, October 14, 2015 - District Board Room 7:00 p.m. Vl. Adiournment MOTION: Trustee Jeff Bird made the motion to adjourn carried. Meeting adjourned at 1 'l :25 p.m. Trustee Greg Calder seconded. M APPROVED atrman ATTESTED Clerk Date PiperJaffray. Bonneville Jt. School District 93 Bond (and t.ery) Planning Summary September 1, 2015 Interert R.t6 Market Vslue Growth Proiections t,evy Equalization Bond Structure Futurc Supplcmental M&O Lcvies Cunmt .s of 72312015 Plus 0.5o% 2016&.fteI. ,4.007. 20% of everege annual P&l wrapFd around existinS bonds Allo$ for rn initial incrc.ie in 2017 or 2018 then incca* al { ar'hual rate every trlo years Bond I'ro(.cds Repaytnent Term True Inter€lt Cost CnC) lnterest Cost 20lE Election - 202'l Election - 2022 Election - 2025 Election - t5E300,0m 17.5 years 3.37V" 123,7 ,523 t58,300,000 195 ye.rs 3.50% 97,828,500 Tota! Co6l Proi.\1ed ttry Equalization (@ 20%) Net Total Bond Cost Nct lnterest Cost Lon8.Rrflr. Pl.nnin& $5t559,300 t7,xg,N $68,902,E00 $r0,602,800 tE2,086,525 lit6,1t7,32s) $86,12E s00 (s17,225,7@l $11.9 rnillion (elernentary additionr)r Renew Plant F.cility Lcly d $a.E million: 97.8 million bond(middle schoovelcm€ntary.dditions): $55.E million bond (ncw elementary school/elementary & HS additions): 150 million bond (new elementary rchools): 0.10 per S1,000 No inar€re€ 0.30 pe! $1,000 0.r0 per $1,000 0.30 per 5l,0m 0.42 per 51,000 No incieasc 1.08 per $1,000 223,600,000 1o3,6?2175 $,137,7q 261,937,7Q 46.19 22,612,195 0.,(l per $1,000 No increas€ Lon g-Rrngc Plenning Summrry: Total Polential Inceases (.t 4% market value Irowth $sumption): Total Principal amount of Bonds: Tolal Int€restamount on Bonds: Ncl lntcrestrhounl on Bonds: Nel Rep.yrnett: Avg. monthly tax for voted s.hool levies on $!00K taxablevalue (mU-2031): Cumulatirc Ercess Cap.city throuth 2040: 1.00 per $1,0m 223,800,000 107,664,0* 41,771,240 265,17t,2n 45.52 11,506,910 Itoicclrd Tstrt Trx Let l!dlt... P6 tlm h an, iolr Eord d..drn ProiGcred lmpact on $1m,000 of net tax.ble value Monthl 30.26 $26.00 $0.lE $18.00 Monthl $2.17 IIU G-I3 Oird.im.t or pl.cing Howlvcr, Pip.r l.ffr.t int..dr to !.rv! .r .. ! nd.rwher oi pl.cchant rt nt and nol a3 , fi.an.bl .dvlro. ro you in lhi3 ira.t..!ion; rnd the prim.r .ola ol Pipct Pip.. ,.ffr.y h.r 6...Ki.1 ..d oth6 i.tcr6l! thn difi.l from yocr ht.r6tt. lssrmptions for .\n.rl\ sis Nolcmbcr l(ll5 Sond Hcction Summ:n of Sccnarios 2028 Election - PiperJaffray. Bonneville Jt. School District 93 Bond (and levy) Planning Summary Septcmber 1, 2015 Interet R.t€s M..ket Vdu€ Grorvth lroiections trly Equalization Bond Structure Future Supplemental M&O Levies Cunent I of 72312015 PIus 0.50% 2Of6 &.rtc": {.m% 20% of avereSe rnnual P&l Wrapp€d .round exhing bonds Allow for an initial incr€.!€ in 2017 or 2018 then incre.s€ it 4ol. .rmu.l r.le every two yea6 Sond Procecds Repayment T.?rh True Inter€d Co6t (nC) lnterest C-oat Total C6t Proieded Lcvy Equaliraum (G 20%) Net Total Bond Cost Net Interest Co6t Lcn!-t.nF Dr'nht: 2018 Election - Sll.9 millicr (elemeit ry rddilion5)i 2tr21 El€ction - R€new Pl.nt F.cility lrvy .t 32.t million: 2022 Election - $47,8 miUion bond(rniddle s(hoovelernentary addilions) 2026 Election - $55.8 million bond (new elehentary s.hoovelementary & HS additiorE): 2028 El€ction - i5O million bond (n w.lementary !ctmls): Lont-R.nt. Pl.nnint Summ.ry: Total Poaenti.l lncreases (.t 4% markct v.lue Srowth arsumplion)i Total Principal amount of Bonds: Total lnter€st amolnt on Bonds: Net Interest amount on Bondsl Net RepayEent: Av8. monthly tax for voted $hool levies on 5100K taxlble l.alue (2017-2031) Cumulative Excess Capacity ihrough 2040: 19133233 (918,&7,$n 996,9t9,Dt (91 9,383,858) t65,500,000 l75ye.rs 3.35% t26,E37,333 $55,500,000 19.5 ye.ri 3.17% Il)0,{19,29r t7469,M 9,169,W t77535,G3 t11,0!t4r3 0.10 per t1,0fi) No incrrarc 0.30 per $1,000 0.42 per t1,000 No lncrease 0.10 Fr tl,0m 0.30 per $1,000 0.42 per $l,m No incrcase 1.1I per $r,000 232,000,000 ll0,300,m0 41,E00,m0 273,800,000 16.4.t 13,697,980 1.21 pe. $I,m0 82m0,000 105,700,000 34,900,000 2m,900,m0 47.27 26,400,ffn Tdl T.x Lt Insc.r. ?.r tl,q)o h !rl7 tro! lo6d .h<don Impact on llm,mo of net laxable value MontIl 53.25 s0.39 $39.00 s0.29 $29.00 IU a-ll Dird.lnrr o. pl.cint How.t.r, Pip.r l.ffrry im.ndr lo rarr!.t.n und.rwrhar or pl.c.mlnt .tenr.nd notat a fin.nca.l.dylio. to you ln fii! tr.6..tion; md th. prlm.ry roh of Pip€. ?ip6 i.nr.y har t.l..ci.l and othd intcrarlr thar diffa. fro.n yoo. hra.att'. Norrmbrr 2015 Bond fl.'ction of scen.rrios