Board explores funding for high-school renovationApril 2, 2019
By LEANN BURKE
DUBOIS — The Northeast Dubois School Board deepened its conversation about funding for an upcoming facilities project Monday night.
At their latest in a series of public work sessions about the corporation’s future, board members heard a series of bond options from Jim Elizondo, an investment banker with Stifel Public Finance of Fort Wayne. Elizondo has worked with the corporation on bond issues for many years.
According to Elizondo’s models, the corporation can take on up to $3.5 million in its debt service fund — which is funded by property taxes and used for large construction projects — without raising the tax rate. The corporation can borrow up to $4.5 million this year without hitting the point where state law allows for remonstrance or a construction referendum, but that extra $1 million would result in an increased tax rate.
Other options Elizondo presented included borrowing $4.5 million this year, then another $4.5 million in 2020, 2021, 2022 or 2023. All of those options result in an increase in the property tax rate for the debt service fund, with the option of taking out the second $4.5 million in 2023 resulting in the smallest increase, and the option of taking out the second $4.5 million in 2020 resulting in the largest increase.
Elizondo based all his models on no increase in assessed property value in the school corporation and on interest rates with a 1 percent cushion.
“Hopefully this gives you a summary and at least a feel that there are some options out there,” Elizondo said.
After Elizondo’s presentation, the board turned to architect George Link with VPS Architecture of Evansville. Link has been working with the corporation since November to create a facilities renovation plan that will arrange the corporation’s facilities to fit current enrollment — 819 this school year and trending down — and to eliminate the need for a property referendum to augment the education fund, which covers schools’ costs associated with teaching students. The education fund is funded through state tuition, but a referendum adds money from property taxes to the fund as well. The corporation currently operates with an education fund referendum that voters passed in 2016 and that will expire in 2024.
Link presented a plan to begin renovations at Northeast Dubois High School to update science and technical education facilities and to prepare the building to house seventh through 12th grades. The high school currently houses ninth through 12th grades, with fifth through eighth grade at Dubois Middle School.
At its last work session, the board directed Link to focus on the high school since board members thought that building had the most imperative needs. Board members also knew the corporation would continue to have a high school regardless of what decisions are made about the other buildings.
“It’s not going to put any money where you’re potentially not going to be,” Link said of the plan. “We’re always going to have a high school here.”
Link’s plan for the high school involves renovating one wing of the school into a seventh- and eighth-grade wing, renovating the school’s two science labs, building a third science lab, moving the art and career and technical classes to one area that can be shared by the high school and seventh- and eighth-grade students, and building an auxiliary gymnasium and renovating the locker rooms and area around the current gym. All together, the plan will cost $7 million, well above what the corporation can borrow at this time.
To scale back the project, Link postponed the gymnasium addition. The remaining renovations, he said, could be done with the $4.5 million bond the school can take out in 2019. Should the board opt for a $3.5 million bond to keep the tax rate steady, Link said they’d have to forego the science lab renovation until a later project. He did suggest including the science labs as an alternate in construction bids so that they can be added if the project costs less than the board is planning.
Under Link’s plan, the seventh- and eighth-graders could move up to the high school building as early as the 2021 school year, though that would involve some construction work during the school year.
“I do like the idea of being able to move quickly on the high school,” Board President Mary Pankey said.
The other board members agreed.
The board is pursuing a construction project now because the corporation will pay off a chunk of debt this year, freeing up some space in the debt service fund. School corporations use the debt service fund to cover larger construction projects. To do so, schools generally wait until previous debt is paid off, then take on new debt to keep a steady property tax rate.
The next steps for the board will be to decide whether to borrow $3.5 million now and keep the property tax rate steady or to borrow $4.5 million now and increase the property tax rate. Pankey said she expects the board to make its decision at the regular board meeting this month, set for 7 p.m. Tuesday, April 16, at the corporation office, 5379 E. Main St., Dubois.
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