Washington Evening Journal
http://washington-ia.villagesoup.com/p/1061053

Neighbors Growing Together | Sep 17, 2014

Mid-Prairie board reorganizes, gets financing data

By Mary Zielinski | Sep 26, 2013

WELLMAN — Within five minutes Monday, the Mid-Prairie Board of Education retired and reorganized in its first meeting following the September election that elected one newcomer, Jeremy Statler and returned three incumbents Jim Hussey, Stacia Bontrager and Jeremy Pickard to office.  Shortly after the new board was called to order Hussey was re-elected president and George Schaefer vice president.
Most of the meeting was a work session to discuss the proposed districtwide building project that went from an initial 22-item wish list to a possible seven that includes an estimated $7 million high school auditorium.
Some 30 residents, supporters of the auditorium project, attended the session that also dealt with financing for what could be a $15 million bond issue.
Matthew R. Gillaspie, senior vice president with Piper Jaffray of Des Moines,gave a detailed presentation about bond issue possibilities, both the process and the taxing procedures.
In short, Mid-Prairie has an “absolute maximum” of $15 million for a bond issue with a total debt service levy of $2.70 (per taxable valuation).  A higher levy rate for an issue beyond $15 million would require a 60 percent voter approval, the same percentage as bond approval.
Gillaspie outlined three possible bond scenarios, ranging from $11 to $15 million, including possibly dividing the issue into individual projects in which one or two could be defeated and one approved.   However, he cautioned that if an issue is defeated,bringing back the identical proposal for a second vote six months or so later, could be more difficult to pass.
Equally important, he stressed, is that a bond issue specifies what the funds are for, that they cannot be used for other purposes, which is why, he noted, the  ballot language has to be carefully considered.
The board expects to seek a bond issue in either February or April with Superintendent Mark Schneider favoring April.
However, Gillaspie said bluntly, “It would have been better a year ago,” both for interest rates and construction bids.  And there is also the matter of property valuations in all categories of residential, commercial and agricultural that can change as the state keeps moving toward equalization among them.  Even more, there can be other problems, he said, when valuation goes down and levy rates go up.
While Mid-Prairie will also use other resources, including PPEL and sales tax revenues as well as private donations and grants, Gillaspie stressed that donations are not certain and often not provided all at one time.  However, he also told of a district that received nearly $6 million in private donations,  but most expected to give it over a five-year period. But, he added, a school building “cannot be built with promises of future donations, it must be paid when it is built.”
That means a district has to have a plan to fund the entire project (or at least to cover donated funds that could come in after construction) from bond money or PPEl/SILO funds.  It is possible to borrow money to be repaid by donated money, but a district has to show it can repay all bonds without donations, just in case they never materialize.
During the discussion, the board was asked about promised donations including a $1 million donation for the proposed middle school gym.  Schneider said there is no immediate donor for the gym.
Gillaspie noted it likely will be December before the board finalized the list for the bond issue.  As for successful passage of a  bond referendum, he stressed, it depends “really on the education job you do” in informing the voters.
Immediately after the work session, the board went into closed session to discuss possible purchase of real estate.. No action was taken when they returned to open session.
In other business, the board:
•    named Jeremy Statler as its representative on the Washington County Conference Board;
•    tabled naming a delegate to the IASB assemby; and
•    named Stacia Bontrager and George Schaefer as its interest-based bargaining school board representatives.

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