From the Desk of John James……

Greetings,  This is information that was in the December newsletter.  If you have any questions feel free to contact me.  John K James

Bond Survey results:  We received 105 surveys back with 80 indicating that we should put the bond issue on the ballot again in April.  There was strong support for the Safe Room, the security upgrades, the bleacher upgrades and air-conditioning.  There was moderate support for all of the other items on the survey.

The Board is proud of the fact that we lead most of the area schools in academics, but feels that we are falling considerably behind in the area of facilities.  With Hamilton adding air conditioning it will leave us as the only school in the KCI conference that is not 100% air-conditioned.  We are also one of the only schools in the area that is not a fully locked down facility.  With 23 outside exits, many of which are unmonitored, we struggle with security.  The addition of practice and activity space, which doubles as a storm and invasion shelter, is something many schools are wishing for.  If we don’t proceed with our opportunity and use the $1.2 million federal grant money to upgrade our campus it looks like the money will go to Lawson so they can build the same facility at their school.

We have been told a number of times that someone could/would not support any bond that did not include…………….. (fill in the blank with whatever their favorite item on the survey was).

The safe room, security upgrades, bleacher upgrades and air-conditioning will cost $2,610,000 and require a bond levy of approximately 32.25¢/100.  Adding in the Bb/SB lights, FB lights, 8 lane all weather track and new concession stand with restroom at the FB field would cost $650,000 and add another 7.8¢/100.  With an estimate of just over $400,000 to add the entryway at the high school door, that would add another 5¢/100 to the bond.  There would also be enough money built in to put a hard wood floor in the safe room and in the multi-purpose room, and to replace the multi-purpose room bleachers so that JH games could be played there.

The total cost of doing all of the projects would be $3,667,000 and would require a bond levy of approximately 45¢/100.  That is the route that the board wants to take in April.  Many of the things on the list have been talked about for at least ten years.  We have been falling behind the area schools in facilities and this would be a huge step toward catching up.

What would that mean to you?

A 45¢ levy on $100,000 of property would cost $85.50 a year in taxes.  That is $7.13 a month.

On $150,000 of property the cost would be $128.25 a year in taxes, or $10.68 a month.

$200,000 in property would cost $171.00 a year, or $14.25 a month.

What would it do to your values?  The median house value in Buchanan County is $106,000.  In the Mid-Buchanan School District it is about $160,000.  Why is that?  Obviously there are some very nice houses in the district.  Beyond that, I have been told by realtors that a house here will often be valued higher than a comparable house in another part of the county, and that houses here hold their value better.   The reason given is always the quality of the school and the desire people have to live in the Mid-Buchanan school district.  Improvements of this magnitude will only serve to bolster home values.  The other side of the coin is that continuing to fall behind neighboring districts in facilities and student security will level the playing field and reduce the attraction of the district.

 

School Finance 101:

  1.  School funds:  There are four funds commonly used by school districts.
    1. Fund 1:  Fund 1 is the general operating fund.  All of our local tax money from the operating levy goes into Fund 1.  When we pass a levy increase like we did a year ago in November the money goes into this fund for day to day operation of the school.
    2.  Fund 2:  This fund is called the “teacher fund” and is used for teacher salaries and benefits.  By law, 75% of our State Formula money (State Aid) must be deposited into Fund 2.  Mid-Buchanan deposits 100% of our State Aid into Fund 2 because that amount does not fully cover our teacher salaries and benefits.  We make regular transfers of local tax money from Fund 1 to Fund 2 to make up the difference.
    3.  Fund 3:  Fund three is the Bonded indebtedness fund.  The only money deposited into this fund is money raised from a separate tax levy for the purpose of making the payments for debts accrued from voter approved bonds.  This money cannot be used for anything other than the items on an approved bond.  This money is kept in a separate bank account from the district’s operating funds.
    4.  Fund 4:  Fund 4 is the Capitol Project, or “Building” fund.  Money can get into this fund in two different ways.  If you do not need all of your local tax levy to operate the school you can designate a part of the levy to go directly into Fund 4.  We do not do that because we want the entire levy to be available for operations.  If you levy directly into Fund 4 and don’t need it there is no provision to transfer it to the operating fund.  We use the other option of transferring money into Fund 4.  At the end of the fiscal year there is a regulated amount of Fund 1 assets, usually a maximum of about $280,000, that you are allowed to transfer to Fund 4.  Fund 4 is used for major repairs or improvements.

How does all of this fit together?  Judging from some of the comments on the surveys there is some confusion about this.  We had comments about teachers, teacher salaries, text books, technology, and maintenance.  Those are all things that are addressed out of Fund 1.  A levy increase, like you passed last November, is how you address these issues.  The reason we asked for a levy increase was so we could better keep up with operating expenses.  However, I do take exception with some of the comments.  Our teacher salaries are very competitive with the area schools.  We budget every year for textbooks and do not have shortages.  Our technology may not all be cutting edge but it compares well with what most schools offer.  We do not have individual laptops or tablets for every student because we haven’t seen that to be working well in the schools that are doing it.

A bond is not set up to address any of those things.  When you pass a bond it lists specific things you plan to do with the money.  It is basically like taking out a car loan or a mortgage on a house.  The money that selling the bonds gives you for those specific projects is deposited into Fund 4 and can only be used for those approved projects.  The annual tax money generated for the bond repayment is deposited into Fund 3 to make those payments.

It is possible to do major projects without passing a bond, but not without cutting into Fund 1, the operating fund.  And we have done that.  When we passed the levy increase eleven years ago, the year I came to Mid-Buchanan, we promised to do some things.  Foremost was to address the roofs that had been being neglected.  Now we are getting comments on the surveys that we are neglecting the roofs.  A separate bond for roof repairs would have provided the resources to fix all of the roofs at one time.  That was not done.   Instead we set about fulfilling our promise with the funds available.  There are 17 sections of roof on the building.  This is largely the result of several different building projects over the years.  A couple sections were new due to the 2004 expansion, but most were in bad repair.  We started transferring money at the end of each fiscal year from Fund 1 to Fund 4 to make those repairs.  The money we transferred reduced our ability to build up the reserve in Fund 1.  As the State funding fell behind we had to stop those transfers.  Over the time I have been here we have transferred $1,439,000 from Fund 1 to Fund 4 but only $100,000 of that has been transferred since 2010.  We were able to fix 11 of the 17 roof sections (and blacktop the parking lot).  The ones from the last building project are still good.  That leaves us about 4 sections we did not get to yet.  Of course the first ones we did are now 10 years old.  We had comments about leaks and buckets and how that was proof of poor roof and district maintenance.  We have a contractor who comes in a couple times a year and inspects the roofs and does minor repairs.  The 17 roof sections have different elevations, run different directions and create a lot of seams, valleys and connection to walls.  On flat roofs those types of areas sometime weather and we address them.  When you walk into the new gym and see buckets catching drips pay attention to where they are.  There is one spot where the old gym meets the new section where the seam sometimes has to be worked on.  The new section has not been redone since it was installed.  The other buckets are catching drips from the drain pipes left from the old gym.  These are still functioning roof drains.  They are cast iron, wrapped in insulation, and have some spots that have rusted.  If it rains very much they leak.  They need to be addressed and now we should have the money to fix them this summer.  When you see buckets in the halls 90% of the time those are not roof leaks.  They are caused by HVAC units that leak either because they are clogged or the drip pans have rusted.  When that happens we catch the drips with buckets and go up and fix the problems when it is done raining.  There are a few places where roofs do still leak, mostly over in the elementary, but we haven’t had the funds to fix those sections.  We just keep trying to patch them.  We haven’t been able to continue our repair plan for the last 4 years because we needed all of our Fund 1 money to run the school.  When we put “continue roof repairs” in the bond language a year ago we were told that was a reason people voted against the bond.  We were told we needed to maintain our roofs without a bond.  Now that we have passed a levy increase we should be able to transfer some money to Fund 4 to get back on the track to repair all of the roofs on the building.  Of course that will still eat into the reserve for Fund 1.  Remember that when you spend Fund 1 money on anything other than education it will reduce the amount that you have left to spend on education.