OFFICIAL MINUTES OF THE SPECIAL MEETING
OF THE MOUNTAIN HOME BOARD OF EDUCATION
The following members of the Board were present for the
Dr. Scriber stated some information needed to be shared so that some errors and omissions, either printed in local newspapers or wherever the source maybe, can be corrected. The Baxter Bulletin has already called and apologized for printing the multi-purpose building was an $18 million dollar facility when it was not and of course this building has already been removed from the facilities building proposals. A retraction will be printed. At other times we receive printed information from people who have well intentions, but the facts are simply not there. He asked Business Manager, Ms. Ann Thomas to speak on the surplus debt service revenue and how the district is utilizing these current funds.
Ms. Thomas explained that a correction needed to be made on the information given out by the Friends of the Tax Payers at the last board meeting. Based on calculations the excess debt service revenue over the issue life of the bonds would be $11,406,180.00 not the approximate $30 million dollar figure the Friends of the Taxpayers had given at the regular board meeting. Ms. Thomas went on to explain the sources and uses of excess debt service revenue. Each year increased maintenance and operation expenditures require us to use operating funds to cover these increased expenditures. The figures for 2004-2005 were $311,987.25 debt service revenue contributed towards $2.2 million of maintenance and operations expenditures; for 2005-2006 $299,636 debt service revenue contributed towards $2.4 million of maintenance and operations expenditures; for 2006-2007 $389,915.00 debt service revenue contributed towards $2.5 million of maintenance and operations expenditures; and for 2007-2008, Ms. Thomas said we are ahead of the curve with $528,957 excess debt service revenue contributing towards $2.9 million in budgeted expenditures. Figures were also given on the state requirement of 9% of each student foundation funding expenditures for M & O. MH has spent in excess of $391,000 in 2004-2005 to a projected for 2007-2008 $890,000 above state minimum requirements.
DISCUSSION OF BOND ISSUE/PUBLIC COMMENT
Mr. Jim Neff spoke saying he was trying to understand school funding and hopefully be able to give support to the bond issue and public education. He asked why it is necessary to refinance the older bonds. Dr. Scriber stated it would be possible to raise the total amount needed to finance the entire project with 5.8 new mills added. This is the decision the Board must make – to ask for this large increase in millage or refinance the old bonds and keep the millage rate lower.
Mr. Webb said he had looked at all the figures and if you take the choice to increase 5.8 mills and not refinance the old bonds, then at end of the 30 year period the payout will be almost $1.5 million more in taxes to pay off that indebtedness. It is actually more expensive on the tax payer to do it that way.
Mr. Neff asked about the 2003 refinancing and was that done to receive a lower interest rate. Mr. Byrd commented at that point in time we received a lower interest rate to refinance those bonds.
The number of classrooms in the new school could possibly be 44, with
each being 850 square feet on the population projections. Mr. Reg Dewiche asked about an alternative method with permanent modular
buildings. Dr. Scriber commented the
state has standards we must meet which actually tell us the cost per square
foot not just for classrooms but in many other areas that go into making up a
school. Mr. Kingrey stated in the
Mr. Dewiche said he felt it would be wise to investigate before proceeding because one of his major concerns is that major employers may move from the area which could cause a decrease in student population.
Mr. Byrd said our architect Steve Elliott has worked with the district and so far there has been no money paid to them. When the drawings on the new school are done, the cost could come in less expensive but may come in more costly. These figures are is just basic figures to give us a starting point.
Mr. Frank Kaye spoke saying he did agree with Ms. Thomas on the figures given at the first of this meeting. The Friends of the Tax Payers did not receive all of the financial information and that is why they did not come up with the same numbers as the district did. His suggestion was to help the public understand what the board is up against; more of the financial information needs to be given out to the public. He asked the question why does the school district continue to move funds from the bonded indebtedness overages to the maintenance and operations fund. We should be looking at control in spending. His comment was cost control needed to become effective and also look at what can be done with the overages to pay the debt down sooner.
Dr. Bob Mathis spoke concerning the issues the board faced. He said I am a friend for the Board and also a people person. He said at this time it looks like we are headed for a recession, so the Board is dealing with taxation in a recession. There is a mistrust of government in our society today. The state demands and they give us the right to pay for it but they do not fund these demands. The average person feels that their view doesn’t count. Dr. Mathis pointed out he felt we are living in a huge culture change era and the Board needs to be aware and ask how can we communicate with the people and get their attention. When one or two small interest groups try to dominate the school board there is more mistrust of the Board but the need is there to wake up the general public for education; we must reach these people so the next bond issue will not be defeated.
Mr. Byrd asked Ms. Thomas what percentage of the district monies fund certified salaries. Ms. Thomas said probably 60% to 65% for certified staff salaries and their benefits; for our total staff the salary and benefits is 70% to 78%. Dr. Scriber commented this leaves a very small amount to actually operate the schools with but it does put money back into our community.
Mr. Byrd questioned Mr. Walker about the amount of money spent on fuel for the buses, electric bills and the month to month expenses that we face. All of these expenditure have gone up tremendously for the school district just as it has for individuals. Mr. Byrd commented we are the 10th lowest millage rate in the state. The new elementary school and renovations on our other buildings will be energy efficient.
Dr. Scriber mentioned other increases in the cost of education; we have unfunded mandates from the government on the No Child Left Behind law mandates testing which is very expensive, Art, Music, P.E. are required, and the normal operation of school business goes up and up because of these unfunded mandates. We have no control over these required expenses. Our Federal government mandates special education and the government promises to pay 40% but in fact they pay only about 27%. Mrs. Atkinson said this year the state is cutting almost $35,000 funding. About 10% of our current population is identified as special education. The local tax payer pays for these programs and we do not have a choice but must follow the laws.
Special Education Director, Debbie Atkinson said special education is funded on a per child count and our child count is based on the 1994 census, therefore, the funding for special education is based on a child count from 1994. Our program has grown considerably since then.
Mr. Webb said student to teacher ratios change, the Bench Mark testing program mandates we remediate students who do not reach the benchmark scores. We pay teachers to remediate these students and this cost falls on the shoulders of local school system. Dr. Scriber said it is a common practice to have good ideas at state level but with little or no funding for the local level.
Mr. Nelson commented he had attended three board meetings in the last 11 days and there has been one subject that has never risen in any three of these meetings. The major responsibility of this Board is to provide adequate educational facilities and opportunities for our children. The children are our job; they are our responsibility. The School Board has a dual responsibility – as we provide quality facilities and quality education for our students, we must be good servants to the public and take care of public money and not stress the tax payers. Mr. Nelson said the history of this board will show that previous Boards have been very diligent in that effort; and this Board is trying to do the same. Our students and our schools rank among the best in our nation. MHHS is one of nine schools in the nation who has been recognized as a model rural school. Finding the money for these kinds of issues is not pleasant but we must all keep in mind our major responsibility is to do what is best for our children.
BOARD DISCUSSION OF BOND ISSUE
Mr. Nelson said he had looked very hard at the large amount of money we are asking for to see if we could possibly get the amount down to the low $20 millions. To accomplish this, we would do nothing at the junior high & high school and nothing at the kindergarten and cut the NWH proposal in half.
Mr. Byrd commented he had looked at the kindergarten through fifth grade projects and the estimated cost here would be at $27 million.
Mr. Wehmeyer stated he felt we can not take the special education project out of the junior high.
Mrs. Pitts said during the last request for a millage increase, the Board had made a promise to the patrons not to ask for another millage increase for ten years and it has been 12 years now.
Mr. Webb pointed out in each of our buildings there are state required standards that we are not meeting today and if we do not do something about it then the state will. These proposals will simply bring us up to the state standards in most cases.
Mrs. Pitts commented during the last legislative session 95 laws were passed which we as a school district must follow. We must have a contingency plan. At the high school we have 7 or 8 teachers who do not have a classroom. We have many science classes who are in need of science labs. Our students need a new media center with more computer space for them. We must make changes not just for elementary but for the secondary schools also. We are now educating the next generation. We all have to pay taxes. We as a Board are trying to look at what each schools greatest needs are and do the best we can with the least amount of increase.
Mr. Webb said the Board also must look at some “belt tightening” on some of our expenditures because there are some other building expenditures we must make that are not in the proposal. There is roughly $400,000 of the smaller items which we will pay out of district funds. And we must make sure we have the funds to do these projects as they need to be done.
Mr. Pendergrass shared some numbers on district growth. Most of the growth we are currently seeing is in the kindergarten through the fifth grade. He shared the growth at the Kindergarten from 2001 to 2006 has been over 16%; the growth in 1st grade for these years was over 29%; 2nd grade growth was almost 16%; 3rd grade up almost 18%. We cannot confine our building projects to just the elementary area. Mr. Pendergrass said we must consider, as these larger classes of elementary students move through our school, space must be available for them. He stated he felt this is an indication that we have younger families in our school district area.
Dr. Smith explained why the millage in MH is lower than the state average. The State mandates each school district have 25 mills for maintenance & operations. Many school districts have dedicated mills above the 25 mills for M & O. MH does not. Therefore the debt surplus has been used for M & O. One mill raises about $453,000. If we had an extra mill for M & O, we would have another $453,000 to use for maintenance and operation of our schools.
Dr. Scriber pointed out the State mandates a school district use 9% for up keep of their buildings. We spend more than that because we want to take care of the buildings that we have. In just this past year, we have spent on outside contractors over $500,000 to make sure our schools are well kept.
Dr. Smith suggested maybe it would be a better thing to add one mill for M & O and then we could use the debt surplus to pay down the existing debt.
Dr. Scriber said we appreciate the advice given on turning the surplus back into the debt. We already have $250,000 dedicated to this in order that the millage could be kept under 3 mills. This is about 40% of the debt service surplus. We could possibly add another few percentage points to this because if we do have extra money, we want to put it on the principal. We all agree with this. Dr. Scriber pointed out the number one reason schools get into physical distress is not properly financing their building programs. We are being very conservative and we hope our revenue is more than we are projecting but there is no guarantee.
Mr. Webb said the Board would look at excess funds if the millage passes and if at all possible will use these to pay off the debt quicker than the 30 years.
Mr. Pitts asked about the law which does not allow districts to pay on the debt for the first five years. Dr. Scriber said that was correct. The bonding agency will not allow you to pay towards the principal for the first five years. But funds could be placed in an escrow account and when the time came, the money would be there to pay down the debt.
Mr. Wehmeyer asked about the procedure on the constructions projects and would the projects be put out for bids. Dr. Scriber explained our architect has done a great job with no money on the front end. If the bond issue passes, everything will be bid out and there are strict laws we must follow very closely.
Dr. Scriber asked Ms. Thomas to explain the summary of proposed bond issue costs. Ms. Thomas said the construction cost estimate is $34,255,599.00, refunding series 2003 bonds $5,871,795.00, the underwriter’s discount allowance (2%) $821,100.00, the cost of issuance (0.25%) $102,637.50, the rounding amount of $3,868.50 is because the bonds are in $5,000 increments. The total par amount of bonds is $41,055,000.00
Dr. Scriber shared some summary information from Jack Truemper of
Stephens, Inc. He said by adopting the
resolution, the board will be calling a special election to be held on
Mr. Byrd pointed out the April 8, 2008 date falls within the seven month window requirement given to us by the State Department of Education. We need to approve this proposal and go on or make some really tough decisions in the next year.
Dr. Scriber asked Ms. Thomas to come and share the Proposed Budget of
Expenditures with Tax Levy for Fiscal Year beginning
BOARD ACTION ITEMS
Motion to Adopt a Resolution related to Proposed Budget of Expenditures with Tax Levy for the Fiscal Year July 1, 2009 – June 30, 2010 and Bond Application
Mr. Webb made a motion, seconded by Mrs. Pitts, to adopt the resolution as presented.
The motion was unanimously approved.
Mr. Byrd expressed appreciation to those in attendance and thanked them for their time, concern, and input. He said it is really a joy to see people in the audience and your support of the bond issue would be greatly appreciated.
A break was taken at
Executive Session Results – 8:25 p.m.
Motion on Superintendent’s Contract
Webb made a motion, seconded by Mrs. Pitts, to extend Dr. Scriber’s contract for
one year keeping it a two year contract, therefore extending the
Superintendent’s contract to
The motion was unanimously approved.
Dr. Smith made a motion, seconded by Mr. Wehmeyer, to adjourn the meeting.
The motion was unanimously approved.