Mill levy increase could be less than expected

Wednesday, December 10, 2014

It wasn't just a report of a clean audit that had USD 234 Board of Education members and district administrators pleased during Monday night's school board meeting.

Superintendent Bob Beckham thanked board members for their support and work throughout the recent campaign to pass a $40.8 million school bond issue.

During the Nov. 4 general election, voters approved the bond issue which will enable USD 234 to make district-wide improvements.

Beckham said he was also pleased to announce that following the recent sale of the bonds, the increase to the district's mill levy is now projected to be less than what was advertised during the bond campaign.

"It's been a whirlwind since Nov. 4," Beckham said.

The original projected mill levy increase for the bond package was 8.5 to 8.7 mills but after the sale of the bonds, that figure has been reduced to 7.9 mills.

Beckham also said the estimated interest rate for the bonds that was communicated to the public was 4.3 percent. This figure was also reduced following the sale of the bonds, to 3.8 percent.

"That is under what we advertised," he said. "And if projects come in as planned, we may have some money at the end to buy some of that mill levy back down."

Beckham said receiving word that the projected numbers will be lower than anticipated is "great news" for the district.

"Our whole goal was to deliver to taxpayers what we had advertised in those (pre-election public) forums," he said. "To be able to deliver that and do it at a lower price is great news. The second part is to deliver projects at the cost we advertised and that's what we're working on now."

During the meeting, the board unanimously approved a resolution authorizing and directing the issuance, sale and delivery of general obligation bonds, Series 2014, of USD 234, which Beckham said was "the final step" for the board in authorizing sale of the bonds.

"It was a necessary step before closing," he said.

Beckham said the bonds were sold the week of Thanksgiving. He said he has been informed that bonds are sold to numerous investors on the primary market and some are sold again in the secondary market.

The anticipated closing date for the bond issue will be Dec. 22, when "the whole process will be final," Beckham said.

Beckham also said during the meeting that he is working on forming a steering committee that would meet on a regular basis throughout the project construction process. The committee will consist of district administrators, members of the architectural team, the district maintenance supervisor, school building principals and three school board members "in varying capacities," Beckham said.

Board members who have agreed to serve on the committee are Gary Billionis, Jamie Armstrong and Janet Braun.

Beckham said he is also considering adding to the committee "someone in the community who is in the construction industry."

Board members also received a report of a clean audit of the district's finances from local CPA Terry Sercer during their meeting. Beckham said a clean audit and an "A" bond rating the district received could be appealing to investors.

"As the underwriters look at our district's finances, an audit is one component that helps determine our rating," he said. "We received an 'A' rating from Standard and Poor's. I think good financial practices and sound finances appeal to investors."

Beckham said the district has released a request for proposals for a construction manager at-risk for the proposed school bond projects and those "are due back to us on Dec. 18."

"We'll sit down as a committee and look at the different companies that want to be considered for those services," he said. "We'll narrow that field to a handful, probably between three and five companies, then do an interview process with them with that committee."

Beckham said that "hopefully" a construction manager will be in place by early January.

"We'll sit down at that time to put a real plan in place for starting (projects)," he said.

Dustin Avey of Piper Jaffray, an Overland Park firm the board hired during a special meeting last month as underwriter for the bonds, was present Monday to make some comments and answer any questions on the bond project.

Avey said he has heard discussion among other school districts about how the USD 234 project "will likely change the community."

"You have locked in that interest rate in a historical period," he said.

In response to a question from board member Justin Meeks, Avey said the 3.8 percent interest rate would be locked in for the 25-year life of the bonds and the only way that figure could change is if the bonds are refinanced at some point.

Avey said he would return to give updates on the bonds to the board during the "next budget year."

In other business Monday, the board:

* Approved EMC as the district's insurance carrier for property, casualty, vehicle and workers' compensation insurance for 2015.

* Took no action following a 15-minute executive session to discuss personnel matters for non-elected personnel.

* Heard from Beckham that the district's Christmas dinner will take place today with the district providing lunch for all district employees at their respective school buildings. Beckham encouraged board members to visit a school during the event.

Board comments

Board members had some positive comments to make during the board comments portion of the meeting.

"Bob (Beckham) has kept us informed and I appreciate that," Billionis said. "I'm thankful for the support of the community. I have heard no negative comments on the bond issue election."

Michelle Hudiburg said she wanted to "thank everyone who works for the district" and said she looks forward to "good stuff ahead."

Armstrong said she enjoyed attending the recent VIP extravaganza fundraiser at Fort Scott Middle School.

Braun said she appreciates the "wonderful spirit of cooperation" in the district and "feels everyone is working together."

Meeks said he appreciates how he can always get a quick response from the board office when he has questions.

"I can call the board office and get an answer quickly," he said.