Farwell BOE agrees to place ‘reduced’ bond issue on ballot

June 13, 2019

By Pat Maurer

At a special meeting Friday, June 7th, the Farwell Board of Education voted 5-1 to pursue a 2.1 mill bond renewal with a .9 mill increase for 19 years and three months in the November election.

If approved by voters the proposal will raise over $19 million to address the district’s needs.

Board member Angelina Smith voted no and William Geyer was unable to attend the meeting.

Monday, June 3rd the board reviewed five proposals for a bond initiative after a 24.5 million bond issue failed at the polls in May. The measure that went down by only 34 votes would have garnered funds for new boilers, building renovations, new elementary classrooms, and safety improvements.

At the June 3rd meeting of the board, Superintendent Steven Scoville said, “The feedback from the community has shown that the two biggest reasons for the bond failing were the number of years (25) and the amount of interest (estimated at $17,127,567) that the district would pay over the life of the bond. Another concern was the development of a long range plan for “fixing and maintaining the FAS facilities.”

The needs of the district include: comprehensive Elementary School upgrades including playground equipment and fencing, a parking/parking entrance, demolishing the 1949 west (Teachout) wing and, and building six new classrooms; replacing 18 aging boilers with four new ones; mechanical and control upgrades to the buildings; roof replacement in the Elementary, Middle and High Schools; district-wide safety and security upgrades; resurfacing the HS gym floor; and replacing MS flooring.

Other needs are an improved JPAC drop off and pick up; district wide PA system upgrades; replacing windows and doors; exterior LED lighting; district-wide clock upgrades and additions; bus garage improvements; Timberland improvements; sports complex improvements and repair and resurfacing of the track, a new ticket booth, fence, well pressure tank and a new electrical shed.

The Superintendent said Friday, “Although COA #1 (repeating the previous bond) only lost by 34 votes and has a lot of support in the community, many believe that a compromise could produce a better option that the entire community could come together to support. COA #2 (proposal 2) of starting the whole process over has very little support. Johnson Controls Inc. was selected by the board from several vendors to create a Performance Based Contract. The key selling points of the Performance Contract verses a traditional bond approach is guaranteed cost and guaranteed savings. This remains a key selling point with the Board of Education and community.”
Option three, waiting until next May or November would have allowed more community forum meetings, but meanwhile the costs would continue to grow and money would have to come from the general fund for roof and boiler repairs. A proposal would also be a straight increase rather than a renewal of the present bond (since it will have expired).

Scoville continued, “All who have participated in this process would agree that we have issues that need to be addressed by some method other than the general fund. These issues do not get cheaper and/or fewer with time. In fact the scope and cost are growing exponentially. For this reason I do not believe COA #3 is a viable option. Having more time to discuss and debate would be great, but that time comes with cost of an ever growing replacement bill. We cannot afford this option.”

Option 4 (COA #4), a 2.1 mill bond renewal for 20 years with a renewable one mill sinking fund for ten years (a total of 3.1 mills) on the November ballot would provide immediate funds, be for fewer years with much less interest costs and raise immediate funds for the district needs, but nearly $11,200,000 would have to be cut from the list of needs. With a ten year sinking fund, renewed in ten years, it would address the concern of many by providing funds for the long range needs. The bond would raise $13.3 million and the one mill sinking fund over ten years would add $4,851,420 for the district, and $438,250 in the first year.

Scoville said in his statement, “On Wednesday I met with JCI (Johnson Controls) to look even closer at COA #4 – renewal and sinking fund combo and COA #5 – a three-year, 19-year bond.”

He continued, “COA #4 would require us to cut the may ballot proposal by almost 50 percent. This would take extensive re-engineering and rebidding. Because this could not be done by the required deadline JCI would not be able to guarantee the cost and saving with this option by the November ballot deadline. The guarantee was one of the strongest selling points for the decision to go with JCI. For that reason I cannot recommend COA #4.
Proposal number 5 (COA #5) is a renewal of the 2.1 mill bond with a .9 increase for 19 years and three months. Scoville called it a “solid proposal.”
He said, “It generates $19,300,000, only 21 percent less than the May proposal. It is 5 ½ years shorter in duration and cuts the interest by 49 percent.

The May proposal would have cost $17.1 million in interest over the 25-year life of the bond, while proposal 4 will cost $8.8 million in interest over the bond’s term.

At the June 3rd meeting, Scoville said option 5 “gained the most support during the community forums, gaining 36 percent of the votes.” It would require cutting only $5.2 million from the list of needs for the district.
Issuing the bond in two series, one for 19 years, 3 months and the second for 17 years and 9 months would increase the funds available for the project to $19.3 million and cost the district 49 percent of the interest that the $24.5 million bond would have cost. Thirty-six percent of those attending the forums preferred this option.

Eliminating the proposed bus loop, architectural work in renovating the Elementary east wind, architectural and remodeling/canopy at the Jaime Center, eliminating the new bus garage, maintenance building, Timberland work, the electrical shed, water pressure tank and new ticket booth at the athletic field and the new construction of classrooms on the west wing of the Elementary would save a total of $6,901,686., more than making up the cost of the cuts.

Scoville added, “Overall this is a very strong compromise that keeps the millage rate to three mills and below. Couple this proposal with a long range strategic plan and I believe we have constructed a proposal that our community can support…This proposal comes with JCI’s cost and savings guarantees and can meet the state’s qualified bond rating.”

He recommended that the board direct him to pursue COA #5…for the purpose of erecting, furnishing and equipping and re-equipping school buildings; acquiring and installing instructional technology in school building; developing, improving, equipping and erecting athletic facilities, playgrounds and sites.”

He added, “I also encourage the BOE to commit to completing the Farwell Area Schools’ Dynamic Plan with opportunities for community input and a goal of publishing this plan by December 1, 2019. Goals of this plan should include: communication and engagement, financial stability, facilities and infrastructure, positive school climate and curriculum. The facilities and infrastructure portion of this plan should address the use of guaranteed saving generated from the bond in a capital investment fund and the use of a sinking fund in the near future as part of our long-range plan..

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