If the school board goes ahead with the estimated $53 million dollar renovation of Clay Community schools, how will it affect the taxpayers of this county?
This was the big question on the minds of the Clay Community School Board during Thursday's special session at North Clay Middle School.
Vice-President of Public Finance for City Securities Corporation Damian Maggos had the answers, to some extent.
Maggos presented several spreadsheets with estimated long-term analysis of possible payment of a $53 million dollar bond over a period of 23 or 25 years.
The amount the school corporation will pay for interest on such a bond was figured with an interest rate 5.5 percent. The totals were staggering, and sobering to the board.
If the board gets a $53 million dollar bond at 5.5 percent interest for 23 years, the school corporation will end up paying more than $45 million in interest. If the board does a 20-year bond, the corporation could save $13 million.
Maggos based the analysis on several factors, how the school value has grown, the school debt, operating expenses and the bond payment.
"The analysis was done in preparation of further community meetings," Maggos said. "They have to be conservative amounts, a worst-case scenario approach because they will set the boundaries that we'll have to live with."
The board still has questions, and definitely weren't ready to make any decisions on this project. A timetable of execution was discussed, with taking bids factored for the end of 2008, and the bond issue decided by December 2008 as an estimated date.
Maggos was very clear on one point in his presentation.
"Although the tax rate won't increase for residents, this doesn't mean that the amount residents will pay won't increase," Maggos said.
Clay Community Schools Corporation Superintendent Dan Schroeder explained what Maggos meant.
"Inflation isn't factored in," Schroeder said. "This is figured on today's value of a dollar. There will be property tax increases, assessed value increases that may mean a higher overall tax, but we will not increase the amount of the school tax. That is our goal."
Board member Brian Atkinson questioned whether the board needed to do all the estimated renovations as part of the bond, or if they could do it in smaller projects.
Schmidt Associates representative Tom Ness, had the answer.
"By doing the projects within a short time span, it will allow for projects to be linked, such as replacing all windows or replacing all the roofs and this means it will be easier to maintain, and keep up with the warranties on these products," Ness said.
Resident Jim Brannan asked permission to address the board, and took the opportunity to caution them about their duty to be prudent with their decisions, and to remember that this project will have a profound impact on this county and as yet, many residents don't even know it's being considered.
Board President Terry Barr agreed with him, and mentioned the renovation project is still in the planning stages.
"We really want to hear from the community on this issue, and we do plan to call a community meeting," Barr said. "We need parents and residents to come and give us their input in this discussion. When we say $53 million, we can cut back and not bond as much, however if we need it, we can't increase it. It's a very difficult decision to make without public input."
The meeting concluded with minor discussion on the administrative and the transportation buildings. Transportation Director Frank Misner and Building and Grounds Director Tom Reberger will be assessing possible locations for both buildings, and present them to the board for discussion by the end of the month.
Schroeder ended with the statement that, "Many of these schools haven't been touched since 1950. They need upgrades. We, the board, feel that the tax rate is reasonable, and we feel that we've been very diligent in this project."