W-MU talks financing for possible projects

BY KARYN SPORY

Mt. Pleasant News

WINFIELD ? With the talk of construction buzzing around Winfield, the Winfield-Mt. Union School Board sat down to discuss how to finance any possible renovations or building projects.

Matt Gillaspie, senior vice president at Piper Jaffray, met with the board to discuss their financial health and how the board might pay for any future projects. Gillaspie passed out a booklet that explained ?every possible explanation of all the sources of borrowing the school could possibly have.?

?To make it clear,? Gillaspie said, ?just because I come to a school board meeting does not mean the school is borrowing money, that you?re going to have a bond issue, or that you?re raising taxes. This is just to educate the school board.?

On Wednesday, the board contracted with Estes Construction/ICAT (Iowa Construction Advocate Team) for their integrated project delivery. The delivery system is meant to help streamline projects by bringing together the district, designer and construction team from the start.

The district has several projects they have been talking about for several years, including removing the portable classrooms and building another addition for kindergarten and pre-kindergarten classrooms and replacing the school?s HVAC system.

Gillaspie said through different measures, the district could consume a scope of debt of roughly $11 million.

?Every municipality in the state ? schools, cities, counties, community colleges ? every municipality is limited by Iowa law to not have any more than five percent of their accessed property valuation outstanding at any given time in debt,? said Gillaspie. For W-MU, that means the district could not borrow more than $12,098,099. However, due to outstanding bonds from 2010, which is set to be repaid in 2022, the district can only borrow $11,099,099.

Gillaspie said in order to be able to borrow $11 million; it would have to be done through a two-question ballot.

The first question on the ballot would allow the district to borrow nearly $5 million from a $2.70 debt service levy. ?I don?t think you have a $4 million project you?re contemplating, I think it?s a little more than that,? he said.

The second question, if the district desired to borrow up to the $11 million, would simply ask voters if the district could borrow the $2.70 tax levy. That tax levy could be up to $4.05. ?No matter if it goes above that ($2.70) by one-cent or $2, you have to have a second ballot question,? he said. ?But it can only go up to $4.05.?

Gillaspie added that if the voters approved the second ballot question or exceeding the $2.70 tax levy, the district would never have to ask again to increase the levy. ?Once you passed that second ballot question, you have that authority forever unless you consolidate the school district or change the legal name,? he explained.

The bond was calculated at a 2.85 percent interest rate, which Gillaspie said was a very conservative figure.

If the board chose to embark on a construction project that would have to be financed through a bond, Gillaspie said explaining the bond to voters would be critical. Gillaspie provided a tax impact spreadsheet to help board members explain the levy.

For example, if a tax levy of $4.05 were passed, a resident who owned a residential property that had been assessed (not market value) at $100,000, their change in annual payment would be $205.65, or $17.14 a month. ?You as a homeowner are not even paying taxes on a $100,000 (assessed value) home. Because of a rollback, this current fiscal year, you?re paying taxes on 55.626 percent of that. And if its your primary residence, get a (homestead credit) of (up to) $4,850 taken off the value,? he said.

For a home that?s assessed at $40,000, an owner would pay roughly $5.87 a month on a $4.05 tax levy, which, again, is the highest the district could ask for.

?That is still a lot of money, I get it. You?ve got to buy groceries, or medicine or diapers, but what you have to think of is as a school board is do you need this project? If you do, you have to be looking out for the entire school district, especially the students.?

The school board has not made any decisions on what projects, if any, they will choose to pursue.

In other business, the board:

? Approved a fuel bid from Prairie Ag Coop for $2.25 per gallon for premium diesel and $2.15 per gallon for gasohol. Those prices would stay the same throughout the year.

? Approved purchasing bread from the Burlington School District next year for 15-cents per bun. The district could receive a two-weeks supply of buns at a time and freeze them for future use. W-MU would have to travel to Burlington to pick up the buns.

? Approved Anderson Erikson as the milk provider for W-MU.

? Approved the resignations of Jason Payne, high school wrestling; John Siegel, junior high wrestling; Joe Cortez, custodian.

? Authorized the hiring of Jeanetta Titus, associate; Will Hansen, speech coach; Karlee Howard, food service; Samantha Trejo, associate.

The next meeting of the W-MU School Board will be held on Wednesday, Aug. 10, at 6 p.m., in the media center.