Special to The Gardner News
A presentation on property tax abatements, industrial revenue bonds and the school district’s population growth was given at the April 11 Gardner-Edgerton School Board meeting by Jeremy McFadden, director of business and finance.
“There hasn’t been enough discussion on how to financially plan for our future addressing growth and balancing the district budget,” McFadden told board members.
Throughout the presentation, he continually emphasized that school finance is in a period of reform and asked the board members what they could control.
“Do we ask local communities for additional support,” he said.
McFadden told the board he believed it was important to understand their role with the recent economic development in the area, especially pertaining to the Logistics Park in Edgerton.
“We have no legal authority to be involved, but we would like to work with cities and develop relationships with the businesses, so we can be up to speed on abatements,” he said.
He did not see benefits from a PILOT (payment in lieu of taxes) for the school district.
The Block Grant for the school expires in January 2017, and McFadden said local mill levies might be their one option to help with future unfunded school enrollment growth. He then showed the board financial calculations on how little money the school district receives from PILOTs, payment in lieu of tax, through tax abatements between the city, city developer and commercial entities, which compensate the city for some or all of the tax revenue that can be lost through a property abatement.
McFadden illustrated how the school district only received 13 percent of the PILOT to be able to use for additional revenue. He said out of $100,000 PILOT funds, the district does not receive the estimated $29,000 due to current school finance reform budget freeze, and that the reality of what is received is closer to an estimated $12,000.
McFadden said the newly planned economic development of Logistic Park’s has an abated assessed valuation of approximately $220 million and sees this as a good thing for the school district in the next ten years.
“This provides a huge benefit in the coming years,” he said. “But what do we do to make the operating budget work in the meantime until we see those benefits? The next ten years are going to be stressful on the budget, and we will have to be extremely lean as the new development brings new students to the district.”
McFadden said a cost-benefit analysis was needed for the county, city and school district as assumptions are based on the prior school finance formula.
“No one has a crystal ball,” he said “No one knows how many kids are coming into the district,” he said.
The school district would like to improve the lines of communication with the cities of Edgerton and Gardner, he said. And have accurate assessments to the true benefit of USD 231.
“We have to make our voices louder and make ourselves more present,” McFadden said. “We do have to make sure we are talking more with these entities.”
Rob Shippy, board president, said the working relationship with Edgerton Mayor Don Roberts was good and hoped to continue working together moving forward.
Tresa Boden, board member, voiced concerns about how the school district is supposed to stay afloat.
“Ten years is a long time to stay afloat,” she said. “I hate to go to residents and ask for more money, because we can’t do this.”
McFadden said he was confident their involvement with the cities would have a beneficial impact, but that the first step was educating them on school finance.
“Our job is to make this work,” he said. “But it doesn’t make it easier when we can’t plan for the future. We have to make sure the resources we do get are put in the right places, and that we are on the same page.”
McFadden said the best case scenario was the cities brought the school district along to be part of the process and negotiations.
“Can we have a seat at the table,” he said.
Boden asked McFadden how it worked in other neighboring cities with their school districts. He explained that most of the other districts deal more with TIFs than abatements, and that they have just enough communication to get by.
Robin Strenz, board member, told him they appreciated his initiative to open communications with both cities.
“We have to figure out a way to make this work locally,” McFadden said. “And do get involved at every opportunity-the sooner the better.”
Cost of Living Resolution Approved
McFadden told the board they were seeking authorization of a mill levy to compensate staff for this school year and the next school year as the school block grant is temporarily frozen.
They will place a notice in The Gardner News addressing the levy funds used for cost of living for school district employees after 30 days with no protest.
The current rate is .1%, and they now qualify for .4% McFadden said.
“And what we are asking for is rather small compared to our neighbors,” he said. “We are working with fewer funds than our neighbors.”
Shippy asked about the maintenance of the current flat mill levy.
“We would still stick to that commitment with additional levy amounts we could maintain the next few years,”McFadden said.
Series 2016-A Bond Sale Resolution Approved
An intermediary step to seek proposals from qualified firms to make the best bids for selling the 2016-A bonds is needed Roger Edgar, George K Baum and Company executive vice president, told the school district board members on Monday night.
The bonds are an estimated $29.7 million. The interest rate is 4.25 percent and the savings is projected at five percent, Edgar said. They wish to present the sale of the bonds at the May 9 meeting.
“We hope to save substantially in the interest rate of the old 2006 bonds,” he said.
A meal price increase for school breakfasts and lunches for the 2016-17 school year was approved by the board. Breakfast will increase by five percent for the elementary and high schools and a ten percent increase for the middle school. Lunches will increase by ten percent for students and five percent for adults.
The new proposed 2017-18 school district calendar was approved. The new school calendar will have school still ending before Memorial Day, two full weeks of a Winter Break and Fall Break aligning with Spring Break.
A purchase for 600 Dell Chromebook laptops for incoming high school freshman was approved, along with new network equipment and wireless controllers for the schools.
Universal Construction has been selected as the new Construction Manager At-Risk Services for the Advanced Technical Center due to their prior experience with the Olathe North Technical Center at Olathe North Highschool in Olathe.
Bruce Kracl, director of operations, also asked the board for an additional May 16 meeting for approval of the design technical center as the bidding period takes three weeks.
“It’s critical we break ground immediately after graduation,” he said.
IRB, abatement process reviewed by school board