MAY 20, 2010

District 171 Facility Workgroup recommends construction bond

   Joint School District 171 held a Facility Workgroup meeting May 17, to discuss building plans for proposed new facilities within the district. Superintendent Dale Durkee said that the Workgroup’s task was to examine the needs and the buildings, and to make recommendations to the board on their findings.

   Through a selection process, a firm known as Design West has been hired by the board to draw up building plans according to designated needs and to facilitate and organize the passing of a bond to fund the projects. The company has a 93% success rate in getting bonds passed. An architect and representative of Design West, Laurence Rose, gave a presentation and presented drawings of the proposed buildings. He stressed that they were just preliminary drawings and can be altered. He stated that Design West would help the school board organize a sample phone poll of the community.

   After the polling and passage of a bond, the projects would enter a schematic design level wherein the schematic drawings of the facilities would be fine-tuned and all ideas would be taken into consideration, at that time, to meet the specific needs of the district.

   The proposed construction of facilities was broken down into four specific projects: 1. classrooms and kitchen reconstruction; 2. bus loading/unloading safety zone and parking at Orofino Elementary; 3 multi-purpose room, Timberline HS; and 4. multi-purpose room at OHS.

   Mr. Rose showed preliminary drawings of the OES kitchen remodeling and of the OHS practice gymnasium with the changes that had been suggested from previous workshop meetings.

   Two proposals were compared as possible funding models to complete the new construction. The first financing proposal is a Plant Facility Levy requiring 55% voter approval. The second type of financing is a Construction Bond which requires a 66.67% majority of voter approval to pass.

   A discussion ensued regarding the differences between a Plant Facility Levy and a Construction Bond. The information provided by Design West defined the differences as follows: “A levy is a local property tax authorized by voters to be used to operate educational programs for students and construct and/or maintain facilities. A Construction Bond is a debt obligation or loan authorized by voters to pay for capital projects such as new construction and remodeling on existing buildings and is repaid (principal and interest) with a dedicated local property tax levy.”

   “A Qualified School Construction Bond” is a bond that allows the District to receive 100% reimbursement (or subsidy) of the interest cost on the bonds from the U.S. Government allowing a school district to obtain what is effectively interest free borrowing.”

   The cost breakdown between the two financing options and the savings generated by a bond over a levy are as follows:  “For a Plant Facilities Levy of $800,000,000 on an 8 year plan, the Total out-of-pocket expense for the district would be $8,300,000. By comparison, a $6,000,000, 20-year Qualified School Construction Bond would have an out-of-pocket expenditure for the district of $6,269,704.”

   “Based on a property value of $100,000, the annual cost to a taxpayer would be $42.00 (without a homeowner exemption) and $21.00 (with a homeowner exemption). A homeowner exemption is defined as: “applies to residential properties only and is equal to the lesser of 50% of the home value (including up to 1 acre of land) or a maximum of $101,153 for tax year 2010. The projected tax rate per $1,000. is equal to 42 cents.”

   It was stressed that the financial proposals for new construction are completely separate from the annual supplemental levy voted upon on May 18. The annual supplemental levy is what funds the running of district schools throughout the year.

   Mr. Rose stated that the temporary modular classrooms in use in many schools are the most expensive type of buildings due to the high cost of utilities and rent. It costs $17,700 per year to rent one modular building – housing two classrooms. He said the district would realize significant savings in the long run by having new, energy-efficient buildings as additions to the campuses.

   There was active discussion throughout the meeting with many people giving input and one dissenting vote. However, the workgroup reached a consensus that the best option to complete construction, for the least amount of money, would be backing a Qualified School Construction Bond which enables the community to be reimbursed 100% for the interest of the bond.