Web posted
Tuesday, August 28, 2007
Schools plan strategy
Moving ahead with plans on referendum
By FOSS FARRAR
Traveler Staff Writer
The Arkansas City Board of Education on Monday night asked the local school district's bond counsel to tweak several options for financing a $36 million bond issue that will go before voters in November.
The board was presented three scenarios in a preplanning phase for the bond issue. Greg Vahrenberg, managing director of Piper Jaffray, distributed spread sheets showing two 20-year finance plans and a 25-year plan.
The school facilities improvement bond issue would include work on all of Ark City's public schools, including a new athletic complex west of Arkansas City High School.
Ark City schools Superintendent Ron Ballard said today the school district is "in no way ready" to decide exactly how the bond issue will be financed. The board had only examined three options with samples of what the final cost might be to taxpayers.
Ballard and one board member, Daren Reese, agreed that whatever option is picked should carefully consider the financial impact on Ark City taxpayers.
"I feel the board is hoping to target the 5 to 6 mill range, whether or not it's precisely that, we don't know now," Ballard said. "As you know, it is running different scenarios."
The 5 or 6 mills would be the amount of additional mills that could be levied on local taxpayers, Ballard said. Based on preliminary information provided by Vahrenberg, that would mean an additional $28.75 per year tax on the homeowner of a $50,000 home.
The median value of a home in the Ark City district is $54,100, according to information from Piper Jaffray.
In 2006, the district's bond and interest mill levy was 5.28 mills. In 1998, two years after a previous school improvement bond issue was passed, the mill levy for bond and interest was 10.74 mills.
If the board were to approve a financing plan requiring a 5 mill bond levy increase -- and voters were to approve the current, $36 million bond issue -- " we're real close to where we were 10 years ago," Ballard said.
"We are looking at how to keep that increase as low as possible while paying off the bond issue," Ballard said.
He added that he would like to see interest from a $36 million bond to be applied back to paying off the bond debt service. The interest that would accrue from investing the $36 million in a three-year period is estimated to be about $1.6 million, according to one of the scenarios presented to the board Monday night.
Reese also said he would like to see the interest go back to paying off the bond debt service. That would lessen the amount taxpayers would pay.
Ballard said now is a good time for a school facilities improvement project because state aid for the local district would be 50 percent of the cost of the bond issue.
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